Year: 2017
Type: conference-paper
Abstract: Previous findings have shown tha \nt punishment does not \nnecessarily \nreduce deception i \nn \nprincipal agent \n- \nrelationships \n. \nWe \nshed \nfurther \nlight on this issue by \nfirst \nidentifying \na punishment \nmechanism that \nsubstantially \ndecreases \ndeception \nin \na sender \n- \nreceiver game: \nthe possibility \nof imposing \nsevere sanctions that are cost \n- \nfree for the enforcer. Keeping \nthis \neffective \ncombination \nof \npunishment \ncosts and severity \nconstant \n, we then investigate how a reduction in monitoring affects deception \nby \nc \nompar \ning \nassured revelation \nof s \nender behavior \nex post \nwith a \ntreatment \nin which \nit \nis disclosed with \njust \n50% probability \n. We \nfind \na similarly \nstrong \ndeterrence effect \nin both \ntreatments \nsuggesting \nthat \npunishment \nworks \nin a \npart \nicular \nway \nin the deception context: \no \nnce it is a credible threat, \nit \ndoes not \nrequire complete monit \noring \nto \nbe effective \n. \nWe also find \nthat receivers show \ns \nimilar \ntrust level \ns \nin \nsenders’ messages for \nboth \npunishment treatments \n, which are significantly higher than in the \ncorresponding \nbaseline \ns \nwithout \nsanctions \n, \nfurther \nsupport \ning \nou \nr conclusion.
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
Funders: Universitat Jaume I, Banco de España
Award: G1488218949
OpenAlex ID: W3088701574