The Way People Lie in Markets: Detectable vs. Deniable Lies

Chloe Tergiman and Marie Claire Villeval
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Chloe Tergiman: Penn State - Pennsylvania State University - Penn State System

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Abstract: In a finitely repeated game with asymmetric information, we experimentally study how individuals adapt the nature of their lies when settings allow for reputation-building. While some lies can be detected ex post by the uninformed party, others remain deniable. We find that traditional market mechanisms such as reputation generate strong changes in the way people lie and lead to strategies in which individuals can maintain plausible deniability: people simply hide their lies better by substituting deniable lies for detectable lies. Our results highlight the limitations of reputation to root out fraud when a Deniable Lie strategy is available.

Keywords: Lying; Deniability; Reputation; Financial Markets; Experiment (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-exp and nep-gth
Note: View the original document on HAL open archive server: https://cnrs.hal.science/hal-03721456v1
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Citations: View citations in EconPapers (12)

Published in Management Science, 2022, 69 (6), ⟨10.1287/mnsc.2022.4526⟩

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Related works:
Journal Article: The Way People Lie in Markets: Detectable vs. Deniable Lies (2023)
Working Paper: The Way People Lie in Markets: Detectable vs. Deniable Lies (2023)
Working Paper: The Way People Lie in Markets: Detectable vs. Deniable Lies (2021)
Working Paper: The Way People Lie in Markets: Detectable vs. Deniable Lies (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03721456

DOI: 10.1287/mnsc.2022.4526

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