@inproceedings{kim-2026-coercion,
    title = "Coercion Suppression Increases Preference Hallucinations via a Deceptive Bypass in $K$-Level Negotiation Agents",
    author = "Kim, Jihye",
    editor = "Chang, Kai-Wei  and
      Mehrabi, Ninareh  and
      Krishna, Satyapriya  and
      Das, Anubrata  and
      Dhamala, Jwala  and
      Cao, Yang Trista  and
      Kumarage, Tharindu  and
      Ramakrishna, Anil  and
      Christodoulopoulos, Christos  and
      Wan, Yixin  and
      Galystan, Aram  and
      Kumar, Anoop  and
      Gupta, Rahul",
    booktitle = "Proceedings of the 6th Workshop on Trustworthy {NLP} ({T}rust{NLP} 2026)",
    month = jul,
    year = "2026",
    address = "San Diego, California",
    publisher = "Association for Computational Linguistics",
    url = "https://preview.aclanthology.org/ingest-acl-workshops/2026.trustnlp-main.17/",
    pages = "287--294",
    ISBN = "979-8-89176-418-7",
    abstract = "K-Level reasoning{---}recursive modeling of opponent beliefs{---}improves LLM negotiation utility but frequently elicits coercive and toxic behaviors that undermine real-world deployability. We propose an Observer{--}Planner{--}Actor architecture with a Modular Appraisal Gate that (i) dynamically estimates the opponent{'}s cognitive level and (ii) filters hostile drafts via an LLM-as-a-judge. In randomized interventions on the CaSiNo dataset, our gated agent eliminates toxicity (0{\%}) and reduces coercion from 35{\%} to 6{\%} compared to a strong static-K baseline, albeit with an alignment tax in utility. However, the gate does not reduce preference hallucinations{---}strategic misrepresentation of the agent{'}s own priorities. K-Level reasoning incidentally suppresses this behavior (from 35{\%} in a vanilla baseline to 22{\%}), but gating coercion releases the suppression, returning hallucination to vanilla-baseline levels (33{--}37{\%}). We term this pattern a deceptive bypass: output-level filters address the form of hostility but leave surface-compliant manipulation channels intact, demonstrating that they alone are insufficient to align utility-driven strategic agents."
}