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Detection Biases in Bluffing

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Abstract

Beliefs in signals that reveal lies or truths are widespread. These signals may lead to a truth or lie detection bias if the probability that such a signal is perceived by the receiver is contingent on the truth value of the sender’s message. Such detection biases are analyzed theoretically in a bluffing game. The detection bias shrinks the equilibrium set to a unique non-pooling equilibrium, in which the better a player is at detecting lies the more often the opponent player will lie. With proper deception techniques such biases can in principle be used to extract hidden information.

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  • Holm, Håkan J., 2008. "Detection Biases in Bluffing," Working Papers 2008:4, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2008_004
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    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP08_4.pdf
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    Cited by:

    1. Holm, Håkan J. & Kawagoe, Toshiji, 2010. "Face-to-face lying - An experimental study in Sweden and Japan," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 310-321, June.

    More about this item

    Keywords

    Bluffing; Game theory; Truth detection; Lie detection; Detection bias;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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