Deception and reputation – An experimental test of reporting systems

Abstract

We use a repeated sender-receiver game in which sender behavior is revealed to future counterparts either by (i) standardized computer reports or (ii) individual reports composed by the receivers. Compared to our baseline, both reporting systems significantly decrease the rate of deceptive messages chosen by senders. However, we find that computer reports reduce deception to a higher extent than individually written reports. This comparably higher impact can be explained by the senders’ anticipation of a high number of missing or deficient receiver reports that we find. We conclude that the precision of a reporting system has a higher importance for reducing deception than its personal character via individual feedback. Surprisingly, the reliability of computer reports is not correctly anticipated by receivers, who trust individually written reports more in the beginning and hence seem to back the wrong horse initially.