Speaker: Marie Claire Villeval, CNRS – Université de Lyon
In a ﬁnitely repeated game with asymmetric information, we experimentally study how individuals adapt their lying when settings allow for reputation and/or competition. While some lies can be detected ex post by the uninformed party, others remain deniable. We ﬁnd that traditional market mechanisms, especially reputation, generate strong changes in the way people lie but do not fundamentally lead to more honesty: people simply hide their lies better by substituting deniable lies for detectable lies. Our results highlight the limitations of traditional market mechanisms to root out fraud and stand in sharp contrast with the existing literature on intrinsic preferences for honesty.