Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2004:30: Detection Biases in Bluffing - Theory and Experiments

Håkan Holm ()
Additional contact information
Håkan Holm: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

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.

Keywords: Bluffing; Game theory; Truth detection; Lie detection; Experiment

JEL-codes: C72; C91; D82

45 pages, First version: December 22, 2004. Revised: January 19, 2005.

Note: This working paper has been divided into two and replaced by 2008:4 and 2008:5

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