Hiding an Inconvenient Truth

Lies and Vagueness

Research output: Working paperDiscussion paperOther research output

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Abstract

When truth conflicts with e¢ ciency, can verbal communication destroy efficiency? Or are lies or vagueness used to hide inconvenient truths? We consider a sequential 2-player public good game in which the leader has private information about the value of the public good. This value can be low, high, or intermediate, with the latter case giving rise to a prisoners' dilemma. Without verbal communication, efficiency is achieved, with contributions for high or intermediate values. When verbal com- munication is added, the leader has an incentive to hide the precise truth when the value is intermediate. We show experimentally that, when communication about the value must be precise, the leader frequently lies, preserving efficiency by exaggerating. When communication can be vague, the leader turns to vague messages when the value is intermediate, but not when it is high. Thus, she implicitly reveals all values. Inter- estingly, efficiency is still preserved, since the follower ignores messages altogether and does not seem to realize that vague messages hide inconvenient truths.
Original languageEnglish
Place of PublicationTilburg
PublisherTILEC
Number of pages29
Volume2010-029
Publication statusPublished - 2010

Publication series

NameTILEC Discussion Paper
Volume2010-029

Fingerprint

verbal communication
Values
leader
efficiency
communication
follower
prisoner
incentive

Keywords

  • Communication
  • Efficiency
  • Lying
  • Public Goods.

Cite this

Serra Garcia, M., van Damme, E. E. C., & Potters, J. J. M. (2010). Hiding an Inconvenient Truth: Lies and Vagueness. (TILEC Discussion Paper; Vol. 2010-029). Tilburg: TILEC.
Serra Garcia, M. ; van Damme, E.E.C. ; Potters, J.J.M. / Hiding an Inconvenient Truth : Lies and Vagueness. Tilburg : TILEC, 2010. (TILEC Discussion Paper).
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Serra Garcia, M, van Damme, EEC & Potters, JJM 2010 'Hiding an Inconvenient Truth: Lies and Vagueness' TILEC Discussion Paper, vol. 2010-029, TILEC, Tilburg.

Hiding an Inconvenient Truth : Lies and Vagueness. / Serra Garcia, M.; van Damme, E.E.C.; Potters, J.J.M.

Tilburg : TILEC, 2010. (TILEC Discussion Paper; Vol. 2010-029).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Hiding an Inconvenient Truth

T2 - Lies and Vagueness

AU - Serra Garcia, M.

AU - van Damme, E.E.C.

AU - Potters, J.J.M.

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PY - 2010

Y1 - 2010

N2 - When truth conflicts with e¢ ciency, can verbal communication destroy efficiency? Or are lies or vagueness used to hide inconvenient truths? We consider a sequential 2-player public good game in which the leader has private information about the value of the public good. This value can be low, high, or intermediate, with the latter case giving rise to a prisoners' dilemma. Without verbal communication, efficiency is achieved, with contributions for high or intermediate values. When verbal com- munication is added, the leader has an incentive to hide the precise truth when the value is intermediate. We show experimentally that, when communication about the value must be precise, the leader frequently lies, preserving efficiency by exaggerating. When communication can be vague, the leader turns to vague messages when the value is intermediate, but not when it is high. Thus, she implicitly reveals all values. Inter- estingly, efficiency is still preserved, since the follower ignores messages altogether and does not seem to realize that vague messages hide inconvenient truths.

AB - When truth conflicts with e¢ ciency, can verbal communication destroy efficiency? Or are lies or vagueness used to hide inconvenient truths? We consider a sequential 2-player public good game in which the leader has private information about the value of the public good. This value can be low, high, or intermediate, with the latter case giving rise to a prisoners' dilemma. Without verbal communication, efficiency is achieved, with contributions for high or intermediate values. When verbal com- munication is added, the leader has an incentive to hide the precise truth when the value is intermediate. We show experimentally that, when communication about the value must be precise, the leader frequently lies, preserving efficiency by exaggerating. When communication can be vague, the leader turns to vague messages when the value is intermediate, but not when it is high. Thus, she implicitly reveals all values. Inter- estingly, efficiency is still preserved, since the follower ignores messages altogether and does not seem to realize that vague messages hide inconvenient truths.

KW - Communication

KW - Efficiency

KW - Lying

KW - Public Goods.

M3 - Discussion paper

VL - 2010-029

T3 - TILEC Discussion Paper

BT - Hiding an Inconvenient Truth

PB - TILEC

CY - Tilburg

ER -

Serra Garcia M, van Damme EEC, Potters JJM. Hiding an Inconvenient Truth: Lies and Vagueness. Tilburg: TILEC. 2010. (TILEC Discussion Paper).