Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250592 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14931
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In a finitely repeated game with asymmetric information, we experimentally study how individuals adapt the nature of their lies when settings allow for reputation-building. While some lies can be detected ex post by the uninformed party, others remain deniable. We find that traditional market mechanisms such as reputation generate strong changes in the way people lie and lead to strategies in which individuals can maintain plausible deniability: people simply hide their lies better by substituting deniable lies for detectable lies. Our results highlight the limitations of reputation to root out fraud when a Deniable Lie strategy is available.
Subjects: 
lying
deniability
reputation
financial markets
experiment
JEL: 
C91
D01
G41
M21
Document Type: 
Working Paper

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