- How private is private information? The ability to spot deception in an economic game
- Number of pages
- Edinburgh/Amsterdam: University of Edinburgh/University of Amsterdam/Tinbergen Institute
- Document type
- Working paper
- Interfacultary Research Institutes
Faculty of Economics and Business (FEB)
- Amsterdam Center for Law & Economics (ACLE)
Amsterdam School of Economics Research Institute (ASE-RI)
We provide experimental evidence on the ability to detect deceit in the 'Lemon Game': a buyer-seller game with asymmetric information. Sellers have private information about the value of a good and sometimes have incentives to mislead buyers. We examine if buyers can spot deception in face-to-face encounters. We vary whether buyers can interrogate the seller and the contextual richness. The buyers' prediction accuracy is above chance, and is substantial for confident buyers. There is no evidence that interrogation and contextual richness are important factors. These results show that the information asymmetry is partly eliminated by people's ability to spot deception.
If you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library, or send a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible.