Bluffing and the Ethics of Negotiation

Negotiations happen nearly every day in the business world. The Albers School therefore offers a popular MBA elective course on the art of negotiation in order to help better prepare students for the negotiations they will encounter.

One common element of negotiations is the art of deception. In Bargaining for Advantage, Professor G. Richard Shell outlines the routine frequency in which deception appears in negotiations. Quoting Professor James J. White, Shell notes that “the negotiator’s role is at least passively to mislead his opponent about his settling point while at the same time to engage in ethical behavior”.

Scholars such as Shell and White tend to find bluffing an acceptable part of the negotiation process. They assert that a negotiator should not be expected to be totally transparent about his or her bottom line—by avoiding a response or by providing a vague response that muddles any sense of clarity regarding her position.

This question is difficult to answer because, truthfully, humans mislead—and lie—all the time. In (Dis)Honesty: The Truth About Lies, Professor Dan Ariely discusses how human nature has become intertwined with the art of lying. According to Ariely, humans often rationalize their lies due to a variety of factors. For instance, priming a subject with the suggestion lying is normal will likely make her more susceptible to lie and to feel justified in doing so. Additionally, the so-called “optimism bias” often leads people to convince themselves that the lies they tell actually hold some truth. These and other factors lead humans to lie on a regular basis—from small fibs to egregious lies and fabrications.

Since humans lie all the time, it should come as no surprise that this practice is commonly carried to the negotiation table. But does that make the practice ethical?

For Shell, we all operate under the influence of a distinct moral compass. Obviously, our behavior and actions must not break the law, but each person’s moral compass will dictate his or her negotiation style, and ultimately his or her tolerance for the tactics associated with bluffing.

Perhaps more important than questioning if lying will occur and whether it is acceptable is a recognition that bluffing likely will occur in negotiations, so we would all be better off by establishing a plan to combat it. How, one might ask, can these inevitable lies be countered? According to Shell, the best tactic is to drill one’s opponent with repeated questions. This inquisitive spirit makes a lie difficult to hold up as truth, and lowers the probability that a negotiator will be taken advantage of by another person’s lies.

A major component of my negotiation course involved conducting mock negotiations with my classmates. After one of our earlier negotiations, Professor Terry Foster asked us to solicit feedback from our opponent in the negotiation in an attempt to improve our negotiation strategies. My opponent for this particular negotiation told me that she thought I was very nice and thoughtful of her party’s interests. However, she said that she picked up early on that I would be susceptible to being too trusting, and that she told several lies because she knew they would help her get what she wanted within the negotiation.

Initially, I was shocked by this feedback. I felt taken advantage of, and that the negotiation was unfair. However, as the course proceeded, I kept thinking back to Professor Foster’s suggestion to continually question our opponents, and to not trust them too quickly. At the end of the day, I realized that had I asked my opponent more questions, her lies likely would have had a difficult time holding up for the entire duration of the negotiation.

Humans are disposed to lie—including during negotiations. However, if we maintain an inquisitive spirit, we don’t have to always fall victim to bluffing from the other side and, more importantly, helps negotiators mark off their own ethical boundary between acceptable, hard bargaining and unacceptable deception.