Communication in context: Interpreting promises in an experiment on competition and trust.

How much do people lie, and how much do people trust communication when lying is possible? An important step toward answering these questions is understanding how communication is interpreted. This paper establishes in a canonical experiment that competition can alter the shared communication code: the commonly understood meaning of messages. We study a sender-receiver game in which the sender dictates how to share $10 with the receiver, if the receiver participates.