Logo
Munich Personal RePEc Archive

Do Liars Believe? Beliefs and Other-Regarding Preferences in Sender-Receiver Games

Sheremeta, Roman and Shields, Timothy (2013): Do Liars Believe? Beliefs and Other-Regarding Preferences in Sender-Receiver Games. Published in: Journal of Economic Behavior and Organization (2013)

[thumbnail of MPRA_paper_53595.pdf]
Preview
PDF
MPRA_paper_53595.pdf

Download (722kB) | Preview

Abstract

We examine subjects’ behavior in sender-receiver games where there are gains from trade and alignment of interests in one of the two states. We elicit subjects’ beliefs, risk and other-regarding preferences. Our design also allows us to examine the behavior of subjects in both roles, to determine whether the behavior in one role is the best response to the subject’s own behavior in the other role. The results of the experiment indicate that, when acting as senders, the majority of subjects adopt deceptive strategies by sending favorable message when the true state of the nature is unfavorable. When acting as receivers, the majority of subjects invest conditional upon receiving a favorable message. The investing behavior of receivers cannot be explained by risk preferences or as a best response to subject’s own behavior in the sender’s role. However, it can be rationalized by accounting for elicited beliefs and other-regarding preferences. Finally, the honest behavior of some senders can be explained by other-regarding preferences. Thus, we that find liars do believe, and that individuals who care about the payoffs of others tend to be honest.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.