2026-04-17T03:40:31Zhttps://recercat.cat/oai/request

oai:recercat.cat:10230/10862025-12-19T01:43:32Zcom_2072_6col_2072_452953

urn:hdl:10230/1086 Reputation and honesty in a market for information Charness, Gary Garoupa, Nuno asymmetric information reputation insider regulation financial markets leex Microeconomics Previous works on asymmetric information in asset markets tend to focus on the potential gains in the asset market itself. We focus on the market for information and conduct an experimental study to explore, in a game of finite but uncertain duration, whether reputation can be an effective constraint on deliberate misinformation. At the beginning of each period, an uninformed potential asset buyer can purchase information, at a fixed price and from a fully-informed source, about the value of the asset in that period. The informational insiders cannot purchase the asset and are given short-term incentives to provide false information when the asset value is low. Our model predicts that, in accordance with the Folk Theorem, Pareto-superior outcomes featuring truthful revelation should be sustainable. However, this depends critically on beliefs about rationality and behavior. We find that, overall, sellers are truthful 89% of the time. More significantly, the observed frequency of truthfulness is 81% when the asset value is low. Our result is consistent with both mixed-strategy and trigger strategy interpretations and provides evidence that most subjects correctly anticipate rational behavior. We discuss applications to financial markets, media regulation, and the stability of cartels. 2017-07-26T10:50:23Z 2017-07-26T10:50:23Z 1998-09-01 2017-07-23T02:03:58Z info:eu-repo/semantics/workingPaper Economics and Business Working Papers Series; 326 L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons http://creativecommons.org/licenses/by-nc-nd/3.0/es/ info:eu-repo/semantics/openAccess