Truth and trust in communication - Experiments on the effect of a competitive context

Julian Rode ()
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Julian Rode: Sonderforschungsbereich 504, Postal: L 13, 15, D-68131 Mannheim

No 08-04, Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim, Sonderforschungsbereich 504, University of Mannheim

Abstract: The paper employs laboratory experimentation to study the effect of competition on truth telling and trust in communication. A sequence of either competitive or cooperative interactions preceded an experimental communication game. In the game, informed advisors sent a recommendation to decision-makers who faced uncertainty about the consequences of their choice. While many advisors told the truth against their monetary self-interest, the propensity to tell the truth was unaffected by the contextual priming. In contrast, decision-makers trusted significantly less in a competitive context. The effect was strongest when they faced full uncertainty. The paper relates this result to psychological and neuro-economic findings on automatic information processing. The data of this study were largely in line with Subjective Equilibrium Analysis (Kalai and Lehrer, 1995).

Pages: 29 pages
Date: 2008-04-10
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-soc
Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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