An experiment on the hypothesis of involuntary truth-signalling in bargaining

We examine face-to-face interaction in a two-person bargaining game with incomplete information in which each bargainer can either have costs to be subtracted from his/her bargaining agreement payoff or not. The bargaining events are observed by onlookers who guess the cost situations of the participants. The work of D. Gauthier (1978, Morals by Agreement. Oxford: Clarendon) and R. H. Frank (1988, Passions Within Reason: The Strategic Role of Emotions. New York: Norton) suggests that the onlookers' detection accuracy exceeds chance accuracy because of involuntary signals inherent in the behavior of the bargainers. It is shown that cost guesses are somewhat more accurate than chance. This effect, however, is entirely explainable by the onlookers' information about objective features of the bargaining process. Classification Numbers: C70, C91, D70, D82. (C) 2000 Academic Press.