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Truth by Consensus: A Theoretical and Empirical Investigation

Author

Listed:
  • Gabriele Camera

    (Economic Science Institute, Chapman University)

  • Rod Garratt

    (BIS)

  • Cyril Monnet

    (University of Bern; Study Center Gerzensee)

Abstract

Truthful reporting about publicly observed events cannot be guaranteed by a consensus process. This fact, which we establish theoretically and verify empirically, holds true even if some individuals are compelled to tell the truth, regardless of economic incentives. In an experiment, subjects routinely misreported a commonly known event when they could monetarily gain from it. Relying on majority consensus did not help uncover the truth, especially if complying with the majority granted small personal monetary gains. This highlights the difficulties in relying on shared consensus protocols to agree on specific events, and the importance of institutions with trusted, impartial observers.

Suggested Citation

  • Gabriele Camera & Rod Garratt & Cyril Monnet, 2024. "Truth by Consensus: A Theoretical and Empirical Investigation," Working Papers 24-10, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:24-10
    as

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    File URL: https://digitalcommons.chapman.edu/esi_working_papers/406/
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    coordination; experiments; DeFi; digital currency; dishonesty; trust;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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