Figure 8.

Results summary: The rise of deception as well as rational and irrational paranoia is captured by three results: (A) Sending high initial offers is a signature of the random agents. In contrast, DoM(–1) senders with thresholds send lower initial offers. This signature is exploited by higher DoM senders which essentially masquerade as random agents by sending higher initial offers and as a result trick the receiver into accepting lower offers later on. (B) Sophisticated receivers are aware of this, taking a lot longer to be convinced that they are playing with a random source (We plot the average number of trials until a receiver has reached 99% certainty that it is playing with a random source when it is playing with a random source). (C) While this is prudent when the DoM(2) receiver plays with a deceptive DoM(1) sender, it is irrationally paranoid when it plays with DoM(–1) random agent, causing the DoM(2) to sustain losses. Throughout these plots, we show the means and standard errors of the mean.