Charness and Dufwenberg (Am. Econ. Rev. 101(4):1211–1237, 2011) have recently demonstrated that cheap-talk communication raises efficiency in bilateral contracting situations with adverse selection. We replicate their main finding and extend their design to include competition between agents. We find that communication and competition act as “substitutes:” communication raises efficiency in the absence of competition but not with competition, and competition raises efficiency without communication but lowers efficiency with communication. We briefly review some behavioral theories that have been proposed in this context and show that each can explain some but not all features of the observed data patterns. Our findings highlight the fragility of cheap-talk communication and may serve as a guide to refine existing behavioral theories.

A recent experimental literature shows that truth-telling is not always motivated by pecuniary motives, and several alternative motivations have been proposed. However, their relative importance in any given context is still not totally clear. This paper investigates the relevance of pure lie aversion, that is, a dislike for lies independent of their consequences. We propose a very simple design where other motives considered in the literature predict zero truth-telling, whereas pure lie aversion predicts a non-zero rate. Thus we interpret the finding that more than a third of the subjects tell the truth as evidence for pure lie aversion. Our design also prevents confounds with another motivation (a desire to act as others expect us to act) not frequently considered but consistent with much existing evidence. We also observe that subjects who tell the truth are more likely to believe that others will tell the truth as well.

According to the theory of guilt aversion, agents suffer a psychological cost whenever they fall short of other people’s expectations. In this paper, we suggest that there may be limits to this kind of motivation. We present evidence from an experimental dictator game showing that behavior is consistent with guilt aversion for relatively low levels of recipient expectations, roughly up to the point where the recipient expects half of the available surplus. Beyond that point the relationship between expectations and transfers becomes negative. Moreover, we examine this relationship at the individual level and establish a typology of subjects depending on how and whether they condition their behavior on recipient expectations.

We explore gender differences in individuals’ motivations. We focus on guilt aversion and moral commitment. Our experiment supports the idea that men are more guilt-averse than women, while moral motivations drive more women's actions in a random dictator game with pre-play communication.

We argue that people choosing prosocial distribution of goods (e.g., in dictator games) make this choice because they do not want to disappoint their partner rather than because of a direct preference for the chosen prosocial distribution. The chosen distribution is a means to fulfil one’s partner’s expectations. We review the economic experiments that corroborate this hypothesis and the experiments that deny that beliefs about others’ expectations motivate prosocial choice. We then formulate hypotheses about what types of expectation motivate someone to do what is expected: these are justifiable hopeful expectations that are clearly about his own choices. We experimentally investigate how people modulate their prosociality when they face low or unreasonably high expectations. In a version of a dictator game, we provide dictators with the opportunity to modulate their transfer as a function of their partner’s expectations. We observe that a significant portion of the population is willing to fulfil their partner’s expectation provided that this expectation expresses a reasonable hope. We conclude that people are averse to disappointing and we discuss what models of social preferences can account for the role of expectations in determining prosocial choice, with a special attention to models of guilt aversion and social esteem.