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

Chloe Tergiman () and Marie Claire Villeval
Additional contact information
Chloe Tergiman: Smeal College of Business, Penn State University, University Park, Pennsylvania

Management Science, 2023, vol. 69, issue 6, 3340-3357

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. Although 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: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2022.4526 (application/pdf)

Related works:
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 (2022)
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)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:69:y:2023:i:6:p:3340-3357

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().