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All Deceptions Are Not Alike: Bayesian Mechanism Design with Social Norm Against Lying

Author

Listed:
  • Ville Korpela

    (Department of Economics, University of Turku)

Abstract
We say that a society has a weak norm against lying if, all other things being equal, agents rather lie in such a way that they do not get caught. We show that if this is the case, and it usually is, then Bayesian monotonicity is no longer a constraint in implementation and all incentive compatible social choice functions are Bayesian implementable. In contrast to the previous literature our result derives from a refinement of the standard Bayes-Nash equilibrium that does not rely on any kind of intrinsic lying aversion on which the experimental evidence is mixed. In addition, it suggests that the so called "multiple equilibrium problem" may not be that severe.

Suggested Citation

  • Ville Korpela, 2014. "All Deceptions Are Not Alike: Bayesian Mechanism Design with Social Norm Against Lying," Discussion Papers 95, Aboa Centre for Economics.
    • Handle: RePEc:tkk:dpaper:dp95
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Deception; Implementation; Incentive compatibility; Revelation principle; Social norms and conventions;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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