The main logic of torture is to inflict so much pain that the victim reveals all his information to make the pain stop.  Incentives for truth-telling in this situation are eerily similar to those in the bank stress tests.

All banks want to report that they are healthy.  To distinguish the lying sick banks from the healthy ones there has to be some verifiable information.  Healthy ones have this information (e.g. they passed the stress test) and the sick ones do not.  The healthy banks have to have the incentive to reveal the information.  This is all too clear for the healthy banks: by revealing their results they can avoid bank runs, get liquid, start lending etc.

In the torture analogy, a healthy bank is an informed terrorist with real information of an attack and a sick bank is someone, say an uninformed terrorist, with no information.  The assumption of the pro-torture people is that the informed terrorist will have the incentive to report his information to avoid pain.  But an uninformed terrorist has the same incentive.  To tell one from the other, the informed terrorist’s information has to be verifiable.  For example, there has to be “chatter” on Al Qaeda websites that can be used to cross-check the veracity of the torture victim’s confession.  If this information is out there anyway, one might ask why torture was necessary in the first place.  Presumably, the information is vague or ambiguous.  The torture victim’s information brings some clarity.

This process seems heavily error-prone.  False confessions may also cross-check by accident.  The information is so noisy that a lead that is very weak may be thought to be strong.  The more noise there is, the more the victim’s report is uninformative cheap talk – it contains no true information as informed and uninformed terrorists all give information, false and true and impossible to distinguish.

There is a second problem.  Once a healthy bank releases the stress test information, the game is over – the market has the information and responds correspondingly.  A torture victim faces further torture.  There is no way for the interrogator to commit to stop torturing.   If the victim knows this beforehand, the victim lies in the first place as there is no way to stop the torture.  If the victim finds this out between episodes of water-boarding, the victim might start lying to contradict their earlier true confessions.

The efficacy of torture relies on verifiability of information and the ability of the torturer to commit to stop if good information is revealed.  Both properties are hard if not impossible to satisfy in practice.