IDEAS home Printed from https://ideas.repec.org/p/edn/esedps/237.html
   My bibliography  Save this paper

How private is private information? The ability to spot deception in an economic game

Author

Abstract

We provide experimental evidence on the ability to detect deceit in a buyer-seller game with asymmetric information. Sellers have private information about the buyer's valuation of a good and sometimes have incentives to mislead buyers. We examine if buyers can spot deception in face-to-face encounters. We vary (1) whether or not the buyer can interrogate the seller, and (2) the contextual richness of the situation. We find that the buyers' prediction accuracy is above chance levels, and that interrogation and contextual richness are important factors determining the accuracy. These results show that there are circumstances in which part of the information asymmetry is eliminated by people's ability to spot deception.

Suggested Citation

  • Michele Belot & Jeroen van de Ven, 2013. "How private is private information? The ability to spot deception in an economic game," Edinburgh School of Economics Discussion Paper Series 237, Edinburgh School of Economics, University of Edinburgh.
    • Handle: RePEc:edn:esedps:237
    as

    Download full text from publisher

    File URL: http://www.econ.ed.ac.uk/papers/id237_esedps.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. David J. Cooper & Kai-Uwe K?hn, 2014. "Communication, Renegotiation, and the Scope for Collusion," American Economic Journal: Microeconomics, American Economic Association, vol. 6(2), pages 247-278, May.
    2. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.
    3. Tore Ellingsen & Magnus Johannesson, 2004. "Promises, Threats and Fairness," Economic Journal, Royal Economic Society, vol. 114(495), pages 397-420, April.
    4. Konrad, Kai A. & Lohse, Tim & Qari, Salmai, 2014. "Deception choice and self-selection – The importance of being earnest," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 25-39.
    5. Marta Serra-Garcia & Eric van Damme & Jan Potters, 2013. "Lying About What You Know Or About What You Do?," Journal of the European Economic Association, European Economic Association, vol. 11(5), pages 1204-1229, October.
    6. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
    7. Russell Cooper & Douglas V. DeJong & Robert Forsythe & Thomas W. Ross, 1992. "Communication in Coordination Games," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 739-771.
    8. Navin Kartik, 2009. "Strategic Communication with Lying Costs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1359-1395.
    9. Matthias Sutter, 2009. "Deception Through Telling the Truth?! Experimental Evidence From Individuals and Teams," Economic Journal, Royal Economic Society, vol. 119(534), pages 47-60, January.
    10. Catherine C. Eckel & Ragan Petrie, 2011. "Face Value," American Economic Review, American Economic Association, vol. 101(4), pages 1497-1513, June.
    11. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, vol. 74(6), pages 1579-1601, November.
    12. Verena Utikal, 2013. "I am sorry - Honest and Fake Apologies," Working Paper Series of the Department of Economics, University of Konstanz 2013-18, Department of Economics, University of Konstanz.
    13. Marco Ottaviani & Francesco Squintani, 2006. "Naive audience and communication bias," International Journal of Game Theory, Springer;Game Theory Society, vol. 35(1), pages 129-150, December.
    14. Michèle Belot & V. Bhaskar & Jeroen van de Ven, 2012. "Can Observers Predict Trustworthiness?," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 246-259, February.
    15. Ockenfels, Axel & Selten, Reinhard, 2000. "An Experiment on the Hypothesis of Involuntary Truth-Signalling in Bargaining," Games and Economic Behavior, Elsevier, vol. 33(1), pages 90-116, October.
    16. David Sally, 1995. "Conversation and Cooperation in Social Dilemmas," Rationality and Society, , vol. 7(1), pages 58-92, January.
    17. Tore Ellingsen & Magnus Johannesson, 2004. "Is There a Hold‐up Problem?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 475-494, October.
    18. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    19. Irlenbusch, Bernd & Ter Meer, Janna, 2013. "Fooling the Nice Guys: Explaining receiver credulity in a public good game with lying and punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 321-327.
    20. Kartik, Navin & Ottaviani, Marco & Squintani, Francesco, 2007. "Credulity, lies, and costly talk," Journal of Economic Theory, Elsevier, vol. 134(1), pages 93-116, May.
    21. Joseph Tao-yi Wang & Michael Spezio & Colin F. Camerer, 2010. "Pinocchio's Pupil: Using Eyetracking and Pupil Dilation to Understand Truth Telling and Deception in Sender-Receiver Games," American Economic Review, American Economic Association, vol. 100(3), pages 984-1007, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ivan Balbuzanov, 2019. "Lies and consequences," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(4), pages 1203-1240, December.
    2. Belot, Michèle & van de Ven, Jeroen, 2019. "Is dishonesty persistent?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    3. Peter Schwardmann & Joël van der Weele, 2016. "Deception and Self-Deception," Tinbergen Institute Discussion Papers 16-012/I, Tinbergen Institute.
    4. Lohse, Tim & Qari, Salmai, 2021. "Gender differences in face-to-face deceptive behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 1-15.
    5. Subhasish M. Chowdhury & Joo Young Jeon & Chulyoung Kim & Sang-Hyun Kim, 2021. "Gender Differences in Repeated Dishonest Behavior: Experimental Evidence," Games, MDPI, vol. 12(2), pages 1-11, May.
    6. Dwenger, Nadja & Lohse, Tim, 2019. "Do individuals successfully cover up their lies? Evidence from a compliance experiment," Journal of Economic Psychology, Elsevier, vol. 71(C), pages 74-87.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jingnan Chen & Daniel Houser, 2017. "Promises and lies: can observers detect deception in written messages," Experimental Economics, Springer;Economic Science Association, vol. 20(2), pages 396-419, June.
    2. Bernd Irlenbusch & Janna Ter Meer, 2015. "Lying in public good games with and without punishment," Cologne Graduate School Working Paper Series 06-02, Cologne Graduate School in Management, Economics and Social Sciences.
    3. Behnk, Sascha & Barreda-Tarrazona, Iván & García-Gallego, Aurora, 2014. "The role of ex post transparency in information transmission—An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 101(C), pages 45-64.
    4. Dwenger, Nadja & Lohse, Tim, 2019. "Do individuals successfully cover up their lies? Evidence from a compliance experiment," Journal of Economic Psychology, Elsevier, vol. 71(C), pages 74-87.
    5. Nicolas Jacquemet & Stéphane Luchini & Jason F. Shogren & Adam Zylbersztejn, 2018. "Coordination with communication under oath," Experimental Economics, Springer;Economic Science Association, vol. 21(3), pages 627-649, September.
    6. Bernd Irlenbusch & Janna Ter Meer, 2012. "Fooling the Nice Guys: The effect of lying about contributions on public good provision and punishment," Cologne Graduate School Working Paper Series 03-11, Cologne Graduate School in Management, Economics and Social Sciences.
    7. Simin He & Theo Offerman & Jeroen van de Ven, 2017. "The Sources of the Communication Gap," Management Science, INFORMS, vol. 63(9), pages 2832-2846, September.
    8. Zakaria Babutsidze & Nobuyuki Hanaki & Adam Zylbersztejn, 2019. "Digital Communication and Swift Trust," Post-Print halshs-02409314, HAL.
    9. Cary Deck & Maroš Servátka & Steven Tucker, 2013. "An examination of the effect of messages on cooperation under double-blind and single-blind payoff procedures," Experimental Economics, Springer;Economic Science Association, vol. 16(4), pages 597-607, December.
    10. Zakaria Babutsidze & Nobuyuki Hanaki & Adam Zylbersztejn, 2021. "Nonverbal content and trust: An experiment on digital communication," Economic Inquiry, Western Economic Association International, vol. 59(4), pages 1517-1532, October.
    11. Chen, Daniel & Hopfensitz, Astrid & van Leeuwen, Boris & van de Ven, Jeroen, 2019. "The Strategic Display of Emotions," Discussion Paper 2019-014, Tilburg University, Center for Economic Research.
    12. Adrian Groot Ruiz & Theo Offerman & Sander Onderstal, 2014. "For those about to talk we salute you: an experimental study of credible deviations and ACDC," Experimental Economics, Springer;Economic Science Association, vol. 17(2), pages 173-199, June.
    13. Grodeck, Ben & Tausch, Franziska & Wang, Chengsi & Xiao, Erte, 2023. "To insure or not to insure? Promoting trust and cooperation with insurance advice in markets," European Economic Review, Elsevier, vol. 160(C).
    14. Antinyan, Armenak & Corazzini, Luca & D'Agostino, Elena & Pavesi, Filippo, 2023. "Watch your words: An experimental study on communication and the opportunity cost of delegation," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 216-232.
    15. Heller, Yuval & Sturrock, David, 2017. "Promises and Endogenous Reneging Costs," MPRA Paper 78803, University Library of Munich, Germany.
    16. Peeters, Ronald & Vorsatz, Marc & Walzl, Markus, 2015. "Beliefs and truth-telling: A laboratory experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 113(C), pages 1-12.
    17. Johannes Abeler & Daniele Nosenzo & Collin Raymond, 2019. "Preferences for Truth‐Telling," Econometrica, Econometric Society, vol. 87(4), pages 1115-1153, July.
    18. Lohse, Tim & Dwenger, Nadja, 2016. "Do Individuals Put Effort into Lying? Evidence From a Compliance Experiment," VfS Annual Conference 2016 (Augsburg): Demographic Change 145616, Verein für Socialpolitik / German Economic Association.
    19. Koessler, Ann-Kathrin & Page, Lionel & Dulleck, Uwe, 2015. "Promoting pro-social behavior with public statements of good intent," MPRA Paper 80072, University Library of Munich, Germany, revised 24 May 2017.
    20. Siegenthaler, Simon, 2017. "Meet the lemons: An experiment on how cheap-talk overcomes adverse selection in decentralized markets," Games and Economic Behavior, Elsevier, vol. 102(C), pages 147-161.

    More about this item

    Keywords

    deception; lie detection; asymmetric information; face-to-face interaction; experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:edn:esedps:237. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Research Office (email available below). General contact details of provider: https://edirc.repec.org/data/deediuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.