Publication:
Information asymmetry and deception in the investment game

Loading...
Thumbnail Image

Download

Advisors

Tutors

Editor

Universidad Carlos III de Madrid. Departamento de Economía

Publication date

Defense date

Journal Title

Journal ISSN

Volume Title

Publisher

publication.page.ispartofseries

UC3M Working papers. Economics
12-27

Creative Commons license

Impact
Google Scholar
Export

Research Projects

Research Projects

Organizational Units

Journal Issue

To cite this item, use the following identifier: https://hdl.handle.net/10016/15596

Abstract

Several situations in our daily interactions are characterized by uncertainty and asymmetric information regarding the final outcomes. For example, an investor may overstate a project’s value, or a superior may choose to under, or over, state the gains from a project to a subordinate. We modify the standard investment game to study the effect of possible deception, i.e. over-, or under-, statement of the true value, on investee (and investor) behavior. We find that deception is prevalent and around 66% of the investors send false messages. Investors both over-, and under-, state the true value of the multiplier, k. We elicit investee beliefs and find that investees are naive in that almost half of them believe the message they receive. Meanwhile, a large proportion of investors think that sending a message was useful. The introduction of the possibility of deception does not affect trust or trustworthiness on average, but deceivers make the deceived worse off, return less and are more likely to report lying to avoid harming others. Finally, an increase in information asymmetry increases deception

Note

Keywords

Funder

Research project

Bibliographic citation


Table of contents

Has version

Is version of

Related dataset

Related Publication

Is part of