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Are People Sometimes Too Honest? Increasing, Decreasing, and Negative Returns to Honesty
Author(s) -
Basuchoudhary Atin,
Conlon John R.
Publication year - 2000
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2000.tb00325.x
Subject(s) - honesty , communication source , work (physics) , quality (philosophy) , simple (philosophy) , economics , monetary economics , microeconomics , psychology , social psychology , computer science , telecommunications , philosophy , mechanical engineering , epistemology , engineering
We show that sender honesty can hurt receivers in simple signaling games. The receiver faces a trade‐off between its ability to work with senders and the quality of information it can get and use from them. Our example also contradicts recent work suggesting that returns to honesty should be increasing. Positive, increasing returns are restored in our model if the receiver can precommit.