Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Preprint |
| Published: |
2026
|
| Subjects: | |
| Online Access: | https://arxiv.org/abs/2602.16973 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1866910026708287488 |
|---|---|
| author | Brown, Alex L. Park, Ethan Velez, Rodrigo A. |
| author_facet | Brown, Alex L. Park, Ethan Velez, Rodrigo A. |
| contents | We test whether lying aversion can steer equilibrium selection in mechanism design. In a principal-worker environment, the direct mechanism admits two dominant-strategy equilibria: the designer's target and a worker-optimal outcome. We show this limitation persists for all robust mechanisms, then ask whether framing misreports as explicit lies helps. We develop a 2X2 experiment that varies direct vs. extended mechanisms with implicit vs. explicit messages. We find that framing misreporting of type as an explicit lie shifts play away from the worker-optimal outcome toward truthful reporting, raising designer payoffs with minimal efficiency loss. These findings indicate that lying aversion is an effective lever for aligning behavior with social objectives. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2602_16973 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | Lies, Labels, and Mechanisms Brown, Alex L. Park, Ethan Velez, Rodrigo A. General Economics Economics We test whether lying aversion can steer equilibrium selection in mechanism design. In a principal-worker environment, the direct mechanism admits two dominant-strategy equilibria: the designer's target and a worker-optimal outcome. We show this limitation persists for all robust mechanisms, then ask whether framing misreports as explicit lies helps. We develop a 2X2 experiment that varies direct vs. extended mechanisms with implicit vs. explicit messages. We find that framing misreporting of type as an explicit lie shifts play away from the worker-optimal outcome toward truthful reporting, raising designer payoffs with minimal efficiency loss. These findings indicate that lying aversion is an effective lever for aligning behavior with social objectives. |
| title | Lies, Labels, and Mechanisms |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2602.16973 |