How private is private information?: The ability to spot deception in an economic game

Michele Belot; Jeroen  van de Ven

How private is private information? The ability to spot deception in an economic game

Michele Belot, Jeroen van de Ven

School of Economics

Research output: Working paper › Discussion paper

Abstract

We provide experimental evidence on the ability to detect deceit in a buyer-seller game with asymmetric information. Sellers have private information about the buyer’s valuation of a good and sometimes have incentives to mislead buyers. We examine if buyers can spot deception in face-to-face encounters. We vary (1) whether or not the buyer can interrogate the seller, and (2) the contextual richness of the situation. We find that the buyers’ prediction accuracy is above chance levels, and that interrogation and contextual richness are important factors determining the accuracy. These results show that there are circumstances in which part of the information asymmetry is eliminated by people’s ability to spot deception.

Original language	English
Publisher	Edinburgh School of Economics Discussion Paper Series
Number of pages	26
Publication status	Published - Dec 2013

Publication series

Name	ESE Discussion Papers
No.	237

Keywords / Materials (for Non-textual outputs)

Deception
lie detection
asymmetric information
face-to-face interaction
experiment
C91
D82

Access to Document

237_Ability to spot deception in an economic game
© Belot, M., & van de Ven, J. (2013). How private is private information?: The ability to spot deception in an economic game. Edinburgh School of Economics Discussion Paper Series.
Final published version, 1.61 MB

Cite this

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title = "How private is private information?: The ability to spot deception in an economic game",

abstract = "We provide experimental evidence on the ability to detect deceit in a buyer-seller game with asymmetric information. Sellers have private information about the buyer{\textquoteright}s valuation of a good and sometimes have incentives to mislead buyers. We examine if buyers can spot deception in face-to-face encounters. We vary (1) whether or not the buyer can interrogate the seller, and (2) the contextual richness of the situation. We find that the buyers{\textquoteright} prediction accuracy is above chance levels, and that interrogation and contextual richness are important factors determining the accuracy. These results show that there are circumstances in which part of the information asymmetry is eliminated by people{\textquoteright}s ability to spot deception.",

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