Kinginvestigation of self serving biases in an

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Unformatted text preview: elect the Nash or cheat fraud choice. In Phase 2: regular play, subjects earn money based on the outcomes of their joint decisions. This phase consists of 18 or 19 rounds of play. In the YP settings, managers can engage in puffery during the regular play phase—that is, they may send their auditorpartners the message, ‘‘I will choose option 1 this round’’ (discussed in more detail below). King—Investigation of Self-Serving Biases in an Auditing Trust Game 273 If they elect not to send this message, then the message ‘‘No message this round’’ is sent. This restriction limits managers’ communication options so that they can communicate only their willingness to cooperate (rather than creating communication noise that may be difficult to decipher ex post). An auditor learns when his corresponding manager is sanctioned at the end of each round, but not the fraud level, which the auditor does not learn until the end of the regular play phase. This delays when auditors le...
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