Identifying Bias Through Post-Report Interactions

Two experiments show that face-to-face meetings help users discern reporters' true beliefs better than those who receive only a written report. Both experiments are based on a 'cheap talk' setting, modified to include two features common to accounting settings: reporters base reports on rich information, and (in a meeting condition) have rich channels of communication to users. Experiment 1 shows that meetings improve users' ability to discern the beliefs reporters held before they had an incentive to deceive the user. Once reporters learned of their incentive to deceive users, they revised their beliefs toward what they wanted users to believe (they self-deceived); those who revised more were more successful in their deception. Experiment 2 shows that users discerned reporters' beliefs through linguistic tone: reporters who believed their reports used more positive words. The results highlight the importance of face-to-face meetings and provide experimental support for Trivers' self-deception theory.