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Why Lying Pays: Truth Bias in the Communication with Conflicting Interests

Toshiji Kawagoe and Hirokazu Takizawa
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Toshiji Kawagoe: Future University - Hakodate
Hirokazu Takizawa: Research Institute of Economy, Trade & Industry

Experimental from EconWPA

Abstract: We conduct experiments of a cheap-talk game with incomplete information in which one sender type has an incentive to misrepresent her type. Although that Sender type mostly lies in the experiments, the Receiver tends to believe the Sender's messages. This confirms ``truth bias'' reported in communication theory in a one-shot, anonymous environment without nonverbal cues. These results cannot be explained by existing refinement theories, while a bounded rationality model explains them under certain conditions. We claim that the theory for the evolution of language should address why truthful communication survives in the environment in which lying succeeds.

Keywords: Cheap talk; Communication; Private information; Experiment; Equilibrium refinement; Bounded rationality; Truth bias (search for similar items in EconPapers)
JEL-codes: C72 C92 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp and nep-gth
Date: 2005-03-22
Note: Type of Document - pdf; pages: 41
References: View references in EconPapers View complete reference list from CitEc
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpex:0503005

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