Lying for a strategic advantage is to be expected in commercial interactions. But would this be more or less obvious when lying could come from either party and question mutually profitable exchange? To explore this, we modify the acquiring-a-company game (Samuelson and Bazerman in Res Exp Econ 3:105-138, 1985) by letting both, buyer and seller, be privately informed. Specifically, the value of the company for the buyer is known only by the seller; whereas, only the buyer is aware by which proportion the sellers evaluation is lower than that of the buyer. Before bargaining, both parties can reveal what they know via cheap-talk numerical messages. Game theoretically, the pooling equilibrium may or may not allow for trade depending on the commonly known expected evaluation discrepancy. By mutually revealing what one knows, one could boost trade and efficiency. Although strategic misreporting prevails quite generally, it is higher for sellers throughout the experiment. Regarding gender, women misreport less, especially as sellers, and offer higher prices.

Angelovski, A., Di Cagno, D., Güth, W., Marazzi, F. (2020). Telling the other what one knows? Strategic lying in a modified acquiring-a-company experiment with two-sided private information. THEORY AND DECISION, 88, 97-119 [10.1007/s11238-019-09715-6].

Telling the other what one knows? Strategic lying in a modified acquiring-a-company experiment with two-sided private information

Francesca Marazzi
2020-01-01

Abstract

Lying for a strategic advantage is to be expected in commercial interactions. But would this be more or less obvious when lying could come from either party and question mutually profitable exchange? To explore this, we modify the acquiring-a-company game (Samuelson and Bazerman in Res Exp Econ 3:105-138, 1985) by letting both, buyer and seller, be privately informed. Specifically, the value of the company for the buyer is known only by the seller; whereas, only the buyer is aware by which proportion the sellers evaluation is lower than that of the buyer. Before bargaining, both parties can reveal what they know via cheap-talk numerical messages. Game theoretically, the pooling equilibrium may or may not allow for trade depending on the commonly known expected evaluation discrepancy. By mutually revealing what one knows, one could boost trade and efficiency. Although strategic misreporting prevails quite generally, it is higher for sellers throughout the experiment. Regarding gender, women misreport less, especially as sellers, and offer higher prices.
2020
Pubblicato
Rilevanza internazionale
Articolo
Esperti anonimi
Settore SECS-P/01
Settore SECS-P/01
Settore SECS-P/02
Settore ECON-01/A - Economia politica
Settore ECON-02/A - Politica economica
Settore ECON-03/A - Scienza delle finanze
English
Bargaining
Private information
Cheap talk
Acquiring-a-company game
Angelovski, A., Di Cagno, D., Güth, W., Marazzi, F. (2020). Telling the other what one knows? Strategic lying in a modified acquiring-a-company experiment with two-sided private information. THEORY AND DECISION, 88, 97-119 [10.1007/s11238-019-09715-6].
Angelovski, A; Di Cagno, D; Güth, W; Marazzi, F
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2108/387364
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