Seminario 'Deception and Reputation: An experiment on reporting dishonesty'

Aurora García Gallego
Universitat Jaume I

11 horas
Seminarios de Análisis Económico

Abstract: In this paper we use a repeated sender-receiver game to experimentally test the effect of reporting systems on reputation building in principal-agent relationships with asymmetric information. Our experiment consisted of three treatments which we used to test the effect of different report types on deceptive behavior and trust over time. In addition to our baseline without reports, one treatment included exogenous reports, generated by a central authority, while another one included endogenous reports, individually written by the receivers. Our findings indicate that the precision of a reporting system has a higher impact on pro-social behavior in our setting than its personal character. In the light of the popular consumer ratings in e-commerce, we propose that the importance of an externally regulated reporting system should not be underestimated.