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Information asymmetry and deception.

Clots-Figueras I, Hernán-González R, Kujal P - Front Behav Neurosci (2015)

Bottom Line: Situations such as an entrepreneur overstating a project's value, or a superior choosing to under or overstate the gains from a project to a subordinate are common and may result in acts of deception.We find greater lying when the distribution of the multiplier is unknown by the investors than when they know the distribution.Further, messages make beliefs about the multiplier more pessimistic when the investors know the distribution of the multiplier, while the opposite is true when they do not know the distribution.

View Article: PubMed Central - PubMed

Affiliation: Department of Economics, Universidad Carlos III de Madrid Spain.

ABSTRACT
Situations such as an entrepreneur overstating a project's value, or a superior choosing to under or overstate the gains from a project to a subordinate are common and may result in acts of deception. In this paper we modify the standard investment game in the economics literature to study the nature of deception. In this game a trustor (investor) can send a given amount of money to a trustee (or investee). The amount received is multiplied by a certain amount, k, and the investee then decides on how to divide the total amount received. In our modified game the information on the multiplier, k, is known only to the investee and she can send a non-binding message to the investor regarding its value. We find that 66% of the investees send false messages with both under and over, statement being observed. Investors are naive and almost half of them believe the message received. We find greater lying when the distribution of the multiplier is unknown by the investors than when they know the distribution. Further, messages make beliefs about the multiplier more pessimistic when the investors know the distribution of the multiplier, while the opposite is true when they do not know the distribution.

No MeSH data available.


Distribution of beliefs by treatment. Ambiguity treatments.
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Figure 4: Distribution of beliefs by treatment. Ambiguity treatments.

Mentions: As shown in Figure 4, in treatment k > 1_No, 51% of individuals thought that the value of k was 2, meanwhile 29, 3, 9, and 9% thought that it was 3, 4, 5, and >5, respectively. The effect of the message seems to be very different in this case as it moves the distribution of beliefs to the right. When a message was sent only 29% of the subjects thought that the value of k was 2, while 38, 6, 15, and 12% thought that it was 3, 4, 5, and >5, respectively. According to a Kruskal–Wallis test, the difference is significant at the 10% level (p = 0.0903). This also shows that individuals have pessimistic beliefs under ambiguity, and contrary to what we found before, the message reverses this pessimism16.


Information asymmetry and deception.

Clots-Figueras I, Hernán-González R, Kujal P - Front Behav Neurosci (2015)

Distribution of beliefs by treatment. Ambiguity treatments.
© Copyright Policy
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC4508524&req=5

Figure 4: Distribution of beliefs by treatment. Ambiguity treatments.
Mentions: As shown in Figure 4, in treatment k > 1_No, 51% of individuals thought that the value of k was 2, meanwhile 29, 3, 9, and 9% thought that it was 3, 4, 5, and >5, respectively. The effect of the message seems to be very different in this case as it moves the distribution of beliefs to the right. When a message was sent only 29% of the subjects thought that the value of k was 2, while 38, 6, 15, and 12% thought that it was 3, 4, 5, and >5, respectively. According to a Kruskal–Wallis test, the difference is significant at the 10% level (p = 0.0903). This also shows that individuals have pessimistic beliefs under ambiguity, and contrary to what we found before, the message reverses this pessimism16.

Bottom Line: Situations such as an entrepreneur overstating a project's value, or a superior choosing to under or overstate the gains from a project to a subordinate are common and may result in acts of deception.We find greater lying when the distribution of the multiplier is unknown by the investors than when they know the distribution.Further, messages make beliefs about the multiplier more pessimistic when the investors know the distribution of the multiplier, while the opposite is true when they do not know the distribution.

View Article: PubMed Central - PubMed

Affiliation: Department of Economics, Universidad Carlos III de Madrid Spain.

ABSTRACT
Situations such as an entrepreneur overstating a project's value, or a superior choosing to under or overstate the gains from a project to a subordinate are common and may result in acts of deception. In this paper we modify the standard investment game in the economics literature to study the nature of deception. In this game a trustor (investor) can send a given amount of money to a trustee (or investee). The amount received is multiplied by a certain amount, k, and the investee then decides on how to divide the total amount received. In our modified game the information on the multiplier, k, is known only to the investee and she can send a non-binding message to the investor regarding its value. We find that 66% of the investees send false messages with both under and over, statement being observed. Investors are naive and almost half of them believe the message received. We find greater lying when the distribution of the multiplier is unknown by the investors than when they know the distribution. Further, messages make beliefs about the multiplier more pessimistic when the investors know the distribution of the multiplier, while the opposite is true when they do not know the distribution.

No MeSH data available.