Lying Is a No-Go. Bluffing Is Allowed, Right?

A study by WHU – Otto Beisheim School of Management and Arizona State University provides answers to the question of the real difference between a bluff and a lie in business negotiations. The distinction is an important one, as the psychological consequences are fundamentally different – for those affected by a bluff or a lie, and for the actors them-selves.

Be it VW, campaign promises or deliberate dives to trigger penalty kicks: We are surrounded by deceptions. Business negotiations in particular are often said to resort to bluffs and lies to improve a particular party’s negotiating position – with the end justifying (almost) all the means. To date, research has considered bluffing a form of lying or regarded bluffs as the “more harmless variant” of a lie. The results of eight staggered studies by an international research team at WHU – Otto Beisheim School of Management and Arizona State University contradict this assessment and identify fundamental differences.

“The difference between a bluff and a lie can be found in the eyes of the beholder: as victims, we are annoyed with ourselves if the other side successfully bluffs, but no one wants to negotiate with a liar, if at all possible, ever again. Lying is immoral, but bluffing is viewed as amoral, both by participants and by those affected, i.e. as a negotiating tactic that does not constitute ethical misconduct,” notes the WHU negotiation expert Professor Dr. Lutz Kaufmann.

Surprisingly, both negotiation experts and laypeople would take the same view, as Christian Schlereth, Professor of Digital Marketing, explains: “A lie is fundamentally about falsifying information or making false promises. Bluffs, on the other hand, are about feigned emotions, such as sympathy, misrepresenting one’s own bargaining position, or making empty threats, such as breaking off negotiations.”

As the researchers also show, lying, for instance, can be reduced by means of a code of conduct, but this will have no impact on bluffing. “Instruments like these increase stakeholders’ moral awareness. This works against lies, but not against bluffing, because with bluffing, moral considerations play no role from the outset. Bluffing is considered a moral-free negotiating tactic that even has to be learned,” as WHU researcher Dr. Jörg Rottenburger summed up.

Lutz Kaufmann, Jörg R. Rottenburger, Craig R. Carter, Christian Schlereth (2018), “Bluffs, Lies, and Consequences: A Reconceptualization of Bluffing in Buyer-Supplier Negotiations,” Journal of Supply Chain Management, Vol. 54., in press

Jörg R. Rottenburger, Craig R. Carter, Lutz Kaufmann (2018), “It’s Alright, it’s just a Bluff: Why do Corporate Codes reduce Lying, but not Bluffing?” Journal of Purchasing & Supply Management, Vol. 24., in press