ORCID

Jeremy Bertomeu, https://orcid.org/0000-0001-6746-5767

Edwige Cheynel, https://orcid.org/0000-0001-5763-3253

Language

English (en)

Publication Date

10-26-2026

Abstract

Organizations rely on languages that imperfectly represent underlying states. We study the interaction of a lying cost, increasing in the distance from the message prescribed by the language, and a deception cost, increasing in the distortion induced in beliefs. Higher lying costs reduce bias and informativeness; higher deception costs do the opposite. Full revelation is sustained as lying costs become small, but with unbounded bias and communication costs. The most efficient policies sustaining nearly full revelation feature high deception costs with some tolerance for lying. With complementarities, targeting messages both untruthful and deceptive sustains full revelation without communication costs.

Document Type

Working Paper

Comments

See Truth and Deception Supplementary (Online) Appendix as a supplementary file

Author's Department

Accounting

Author's School

Olin Business School

Additional Files
online_appendix.pdf (309 kB)
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Included in

Business Commons

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