Strategic Information Transmission and Social Preferences

This paper reports on experiments regarding cheap talk games where senders engage in deception also when their interests are not in conflict with those of the receiver. The amount of miscommunication we observe is higher than in previous experimental findings on cheap talk games, even though, as in previous work, some participants appear to feature a cost of lying. A novel feature of our framework is that sometimes senders’ and receivers’ interests are in conflict and some other times they are aligned. We show that our findings can be attributed to distributional preferences of senders, which may be sufficiently high to induce them to lie, even when they face a cost of lying, to avoid the receiver getting a higher payoff than the sender.