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Detection Biases in Bluffing - Theory and Experiments

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Abstract

People may be better at recognizing lies than truths or better at recognizing truths than lies. Such detection biases are analyzed theoretically and experimentally. The detection bias shrinks the equilibrium set to a unique non-pooling equilibrium, in which, the better a player is to detect lies the more often will the opponent player lie. In the experiment, subjects were telling the truth too often according to standard predictions. Other findings were a significant positive correlation between self-rated bluffing ability and actual bluffing performance. Furthermore, the subjects were more prone to lie to a woman than to a man.

Suggested Citation

  • Holm, Håkan, 2004. "Detection Biases in Bluffing - Theory and Experiments," Working Papers 2004:30, Lund University, Department of Economics, revised 19 Jan 2005.
    • Handle: RePEc:hhs:lunewp:2004_030
    Note: This working paper has been divided into two and replaced by 2008:4 and 2008:5
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    References listed on IDEAS

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    More about this item

    Keywords

    Bluffing; Game theory; Truth detection; Lie detection; Experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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