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How private is private information? The ability to spot deception in an economic game

Michèle Belot () and Jeroen van de Ven ()

No 2013-111, SIRE Discussion Papers from Scottish Institute for Research in Economics (SIRE)

Abstract: We provide experimental evidence on the ability to detect deceit in a buyer-seller game with asymmetric information. Sellers have private information about the buyer's valuation of a good and sometimes have incentives to mislead buyers. We examine if buyers can spot deception in face-to-face encounters. We vary (1) whether or not the buyer can interrogate the seller, and (2) the contextual richness of the situation. We find that the buyers' prediction accuracy is above chance levels, and that interrogation and contextual richness are important factors determining the accuracy. These results show that there are circumstances in which part of the information asymmetry is eliminated by people's ability to spot deception.

Keywords: Deception; lie detection; asymmetric information; face-to-face interaction; experiment (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cbe, nep-cta and nep-exp
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Journal Article: How private is private information? The ability to spot deception in an economic game (2017) Downloads
Working Paper: How private is private information? The ability to spot deception in an economic game (2013) Downloads
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