SBEE seminar series: Chloe Tergiman

The Way People Lie in Markets

Abstract:

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.  Joint work with Marie Claire Villeval.

Speaker Bio:

Chloe Tergiman is an Assistant Professor in Risk Management at the Pennsylvania State University Smeal College of Business. Her research is in the field of Experimental Economics with an emphasis on bargaining, decision rights, lying in financial settings and political economy. She has a PhD in Economics from New York University and undergraduate degrees in Economics and Mathematics from the Massachusetts Institute of Technology.

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The Social, Behavioral and Experimental Economics seminar series is joint presentation of the School of Information, the Ross School of Business and the LSA Department of Economics.