The ego is no fool: Absence of motivated belief formation in strategic interactions

Abstract

We investigate whether individuals are more easily fooled by others when they enhance their personal characteristics and abilities. We use an experiment in which participants complete an IQ test and then play a sender–receiver game. The experiment has a 2x2 factorial design. First, we determine the state either by the receiver’s relative performance or by a randomly drawn number. Second, monetary incentives, which are common knowledge, are such that the sender is better off (worse off) when the receiver’s action is about him being of high (low) rank, while the receiver benefits from selecting the action that matches his true rank. We find that receivers are not more likely to believe senders or to move their action further from their prior beliefs when they provide news that carries ego-relevant information about themselves, compared to the cases in which the news carries no ego-relevant information.