A very interesting game, altough, to be quite fair, it will only hold your attention for about only one playthrough, I do like it...a little bit, if only for the fact that unlike other games, it is interactive. You basically are able to create sentences in the game, and actually be able to communicate with other enemies rather than pick from a pre-selected list of Sentences generated by the game (like in KOTOR). Since I saw Jae discuss how the Persuasion aspect of Obilivion wasn't really realistic, I thought this game might actually fit your bill.

http://www.the-underdogs.info/game.php?id=2435)

Trust and Betrayal: The Legacy of Siboot is an obscure gem by Chris Crawford, creator of the acclaimed political simulation Balance of Power. Billed as “the world’s first narrative game,” Siboot does fulfill this cryptic promise: it is a very unique strategy game that emphasizes character interaction and personal-level diplomacy. The game is set in a fictitious gameworld that comprises several planets, each populated by a distinct alien race.
Being a very unique game, it is quite difficult to explain exactly what Siboot is all about. The game basically involves exchanging information with other characters in order to work out your strategy for a nightly round of "mental combat" that boils down to repeated rounds of rock/paper/scissors. To win, you have to trade information with the non-player characters, using an iconic language in which you can not only offer trades but also make promises, express emotions, or just exchange small talk. The challenge comes from the fact that everything you do affects the NPCs' opinions of you. You usually can't win without giving information about your friends now and then, but if you do it too often or fail to apologize when they find out, you won't have friends for long (and no one will give you any more information and you'll lose). This emphasis on careful dealing with other characters and keeping track of their assessment of you (and vice versa) explains the game’s name, as choosing who to trust and who to betray is key to success in the game.

Overall, Siboot is a masterpiece that is best experienced than described. It is a perfect game for an adventurous strategy gamer who is attracted to unique titles and has enough patience/perseverance to climb the steep learning curve. As with Crawford’s other titles, Siboot is quite difficult to learn, and unfortunately no manual is available from Crawford’s website where he decided to make the Macintosh version of game downloadable as freeware. But luckily for you folks, the PDF manual (after a few hours of laborious scanning by yours truly ;)) is available for download here. Siboot will probably seem too dry for most gamers who are accustomed to user-friendly, accessible strategy games. But anyone who takes the time to learn the ropes will definitely find Siboot a unique, intriguing, and rewarding game. As games go, it doesn’t get more unique or esoteric than this. Highly recommended!

If you have time, you can read the novella in that manual to learn more about the backstory of the world as well. The reason I recommend this game is because it does present a realistic way of dialouge and persuasion. I'd actually call it a "Manlipuation Game" as the main goal is to manlipuate your fellow "friends", baiting them into giving up information and then selling them out and letting them dry. I really hope to try out the Hard setting, because in that setting, your friends aquire information about you and then use it in an attempt to win the competition as well.