The role of ex post transparency in information transmission -An experiment

Abstract

Asymmetric information in economic relationships often provides incentives to deceive. Previous findings show that ex ante disclosure of conflicts of interest not only fails to improve these relationships but also leads to even more deception. This study proposes that providing ex post transparency could play an important role in reducing deception. Different scenarios of a sender–receiver game allow us to show not only that disclosing conflicts of interest ex post does not induce more deception but also that a 50% chance of subsequent disclosure significantly reduces deception in the case in which the sender obtains a small gain at the expense of a comparatively big loss for her counterpart. We find no significant reductions under other circumstances. Regarding the receivers, we find that the increase in honest messaging, when it takes place, is not anticipated.