An Experiment on Deception, Credibility and Trust∗

We report results from an experiment on a repeated sender/receiver game with twenty periods in which one of the periods has higher weight, the sender communicates about the realized state in each period, the receiver takes an action matching her belief about the state, and then learns whether the sender lied. Receivers are matched either with malev-olent (human) senders who prefer the agents to take wrong decisions or with benevolent (machine) senders who always tell the truth. Our findings do not support the predictions of the Sequential Equilibrium. The deceptive tactic in which malevolent senders tell the truth up to the key period and then lie at the key period is used much more often than it should and it brings higher expected payoff. We suggest that our data are well organized by the analogy-based sequential equilibrium (ABSE) in which (some subjects) may rea-son coarsely when making inferences and forming expectations about others ’ types and behaviors. ∗We thank Maxim Frolov for assistance on the experimental design, Guillaume Hollard, Frederic Koessler, Jean Marc Tallon, and the participants to the Neuroeconomic Workshop, the Extensive form Games in th