Truth, Honesty, and Strategic Interactions

Bernabe, Angelique and Hossain, Tanjim and Yu, Haomiao (2021): Truth, Honesty, and Strategic Interactions.

Abstract

We experimentally investigate how introducing the concept of truth in the natural context of a game affects player behavior using two games. Two players simultaneously make reimbursement claims for a damaged product, where players' payoffs depend only on their claims but not on the true price. Both games are dominance-solvable, and one of them has a strictly dominant strategy equilibrium, which many participants easily identified. Yet, claims in our experiments are significantly affected by the price. Analyzing the role of truth on participants' choices, we show that one needs strategic considerations and preferences for honesty to explain the results.

• Item Type: MPRA Paper
• Language: English
• Keywords: Preference for Honesty, Truth-telling in Games, Traveler's Dilemma, Dominance-solvable Games, Strictly Dominant Strategy, Level-k thinking
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior; D - Microeconomics > D0 - General > D03 - Behavioral Microeconomics: Underlying Principles

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