Trust and Truth

Journal of Economic Psychology, 2014

Honesty toward strangers can be considered an important norm of any given society. However, despite burgeoning interest in honesty among experimenters, the heterogeneous nature of prior experimental designs obfuscates our understanding of this important topic. The present review of 63 economic and psychological experiments constitutes the first attempt to compare findings across a range of honesty experiments. Our findings across experimental designs suggest the robust presence of unconditional cheaters and noncheaters, with the honesty of the remaining individuals being particularly susceptible to monitoring and intrinsic lying costs.

Philosophical Transactions of the Royal Society B: Biological Sciences, 2021

Gossip is believed to be an informal device that alleviates the problem of cooperation in humans. Communication about previous acts and passing on reputational information could be valuable for conditional action in cooperation problems and pose a punishment threat to defectors. It is an open question, however, what kind of mechanisms can make gossip honest and credible and reputational information reliable, especially if intense competition for reputations does not exclusively dictate passing on honest information. We propose two mechanisms that could support the honesty and credibility of gossip under such a conflict of interest. One is the possibility of voluntary checks of received evaluative information from different sources and the other is social bonding between the sender and the receiver. We tested the efficiency of cross-checking and social bonding in a laboratory experiment where subjects played the Prisoner's Dilemma with gossip interactions. Although individuals ha...

Experimental Economics, 2018

We experimentally investigate the relationship between (un)kind actions and subsequent deception in a two-player, two-stage game. The first stage involves a dictator game. In the second-stage, the recipient in the dictator game has the opportunity to lie to her counterpart. We study how the fairness of dictator-game outcomes affects subsequent lying decisions where lying hurts one's counterpart. In doing so, we examine whether the moral cost of lying varies when retaliating against unkind actions is financially beneficial for the self (selfish lies), as opposed to being costly (spiteful lies). We find evidence that individuals engage in deception to reciprocate unkind behavior: The smaller the payoff received in the first stage, the higher the lying rate. Intention-based reciprocity largely drives behavior, as individuals use deception to punish unkind behavior and truth-telling to reward kind behavior. For selfish lies, individuals have a moral cost of lying. However, for spiteful lies, we find no evidence for such costs. Taken together, our data show a moral cost of lying that is not fixed but instead context-dependent.

Games and Economic Behavior, 2007

A recent experimental study of Cai and Wang [Cai, H., Wang, J., 2006. Overcommunication in strategic information transmission games. Games Econ. Behav. 95, 384–394] on strategic information transmission reveals that subjects tend to transmit more information than predicted by the standard equilibrium analysis. To evidence that this overcommunication phenomenon can be explained in terms of a tension between normative social behavior and incentives for lying, we show in a simple sender–receiver game that subjects incurring in costs to punish liars tell the truth more often than predicted by the logit agent quantal response equilibria whereas subjects that do not punish liars after receiving a deceptive message play, on the aggregate, equilibrium strategies. Thus, we can partition the subject pool into two groups, one group of subjects with preferences for truth-telling and one taking into account only material incentives.

The American Journal of Psychology, 2007

Previous research indicates gossip is a social bonding system that is use to establish shared acquaintances and/or attitudes, to punish group norm violators, or for coercion via invoking fear of gossipmongers. However, no empirical work explores directly the relationship between gossip about freeloaders leading to improved cooperation in recipients. Thus, we predicted that the sharing of negative gossip about the freeloading behavior of a third party will lead to higher levels of cooperation. Using levels of cooperation in a prisoner’s dilemma game as a proxy to measure social bonding, we compared cooperation levels of 60 female respondents who met with a confederate randomly assigned to one of three conditions. They either (1) did not talk or were exposed to (2) negative reputation gossip or (3) self-disclosed negative reputation information. Results show that, even after controlling for a list of potential confounding factors, cooperation levels are high in both the control and self-disclosure condition and are significantly lower in the gossip condition. We suggest that gossip may spark initial relations, yet is insufficient to ignite a social bond sustained by cooperative action among complete strangers.

Proceedings of the National Academy of Sciences, 2016

Humans frequently cooperate without carefully weighing the costs and benefits. As a result, people may wind up cooperating when it is not worthwhile to do so. Why risk making costly mistakes? Here, we present experimental evidence that reputation concerns provide an answer: people cooperate in an uncalculating way to signal their trustworthiness to observers. We present two economic game experiments in which uncalculating versus calculating decision-making is operationalized by either a subject’s choice of whether to reveal the precise costs of cooperating (Exp. 1) or the time a subject spends considering these costs (Exp. 2). In both experiments, we find that participants are more likely to engage in uncalculating cooperation when their decision-making process is observable to others. Furthermore, we confirm that people who engage in uncalculating cooperation are perceived as, and actually are, more trustworthy than people who cooperate in a calculating way. Taken together, these d...

2001

CHAPTER 1. PERSONAL EXCHANGE AND BARGAINING EXPERIMENTS. . 10 l.L The Behavioral Bargaining Problem 10 1.2. Background 11 1.3. Early Experiments 13 1.4. Trust Games U 1.5. Explaining Bargaining Behavior l(j CHAPTER 2. POSITIVE RECIPROCITY AND INTENTIONS IN TRUST GAMES 19 2.1. Introduction I'J 2.2. Trust and Reciprocity 2.3. Outcome-based Models 2.4. Localized Play in an Extended Trust Game 2.5. Experimental Design and Procedures 2(i 2.6. Predictions and Hypotheses 2.7. Results 2.8. Discussion CHAPTER 3. SUSTAINING COOPERATION IN TRUST GAMES 3.1. Introduction 3.2. Sustaining Ihist 3.3. Experimental Design and Procedinres 3.4. Results 3.5. Conclusion 48 APPENDIX A. INSTRUCTIONS FOR VOLUNTARY/INVOLUNTARY EXPERIMENTS 49 APPENDIX B. INSTRUCTIONS FOR SORTING EXPERIMENTS 53 '^This background informatioa is meant only as a primer on the classical treatmeat of extensive form games. See Fudenberg and Tirole (1991) for a thorough introduction.

Social Science Research Network, 2017

We introduce a novel decision problem to experimentally study situations where people know that they can lie, but do not initially know the economic consequences: they have to invest time to find them out. We report numerous findings, the most intriguing of which is that, in our setting, people can be divided in three types: the Good, who act honestly independently of the corresponding payoff; the Bad, who maximize their payoff without even checking the payoff for telling the truth; the Angry, who first look at the payoff for telling the truth and then lie only if that is low.

Economic Inquiry, 1998

Laboratory experiments have generally supported the fundamental theorem that, in classical property rights environments, noncooperative behavior in large group markets yields efficient social outcomes. Experiments, however, regularly fail to support the game theoretic prediction of noncooperative behavior in small group strategic interaction and in public good environments. In these two types of experiments subjects frequently achieve more efficient social outcomesthey collect more' money from the experimenter-than noncooperative game theory predicts. As we interpret it, subject behavior in these experiments exhibits a habit of reciprocity even in single-play games. Evolutionary psychologists hypothesize that this is because humans have evolved mental algorithms for identifying and punishing cheaters who behave non cooperatively in social exchange. For about 2-3 million years humans have lived in small interactive groups, and this, has required adaptation to the fitness demands of social exchange. The hypothesis follows that the human mind is composed of context-specific mental modules that operate on the cost-benefit characteristics of social exchange. This requires the mind to be adept at detecting cheating on implied or explicit social exchange contracts. This hypothesis is contrary to game and economic theories which formally develop a small number of domain general principles of strategic interaction, which are applicable across all strategically similar contexts. Evolutionary psychologists have reported an impressive number of individual. decision making experiments designed to test competing hypotheses about human cognition rules in social exchange. We build on this work, and extend it as an organizing principle to examine and explain subject behavior in public good, ultimatum, dictator, and more general extensive form bargaining games.