A principal faces an agent with private information who is either honest or dishonest. Honesty involves revealing private information truthfully if the probability that the equilibrium allocation chosen by an agent who lies is small enough. Even the slightest intolerance for lying prevents full...

Using the canonical principal-agent setting with adverse selection, we study the implications of honesty when it requires pre-commitment. Within a two-period hidden information problem, an agent learns his match with the assigned task in period 2 and, if honest, reveals it to the principal if he...

We analyze a principal's ability to discriminate between honest and dishonest agents, who have private information about the circumstances of the exchange. Honest agents reveal circumstances truthfully as long as the mechanism is sufficiently fair: the probability that an equilibrium allocation...