IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/113331.html
   My bibliography  Save this paper

A lie is a lie: the ethics of lying in business negotiations

Author

Listed:
  • Sherwood, Charles

Abstract

I argue that lying in business negotiations is pro tanto wrong and no less wrong than lying in other contexts. First, I assert that lying in general is pro tanto wrong. Then, I examine and refute five arguments to the effect that lying in a business context is less wrong than lying in other contexts. The common thought behind these arguments—based on consent, self-defence, the “greater good,” fiduciary duty, and practicality—is that the particular circumstances which are characteristic of business negotiations are such that the wrongness of lying is either mitigated or eliminated completely. I argue that all these “special exemption” arguments fail. I conclude that, in the absence of a credible argument to the contrary, the same moral constraints must apply to lying in business negotiations as apply to lying in other contexts. Furthermore, I show that for the negotiator, there are real practical benefits from not lying.

Suggested Citation

  • Sherwood, Charles, 2022. "A lie is a lie: the ethics of lying in business negotiations," LSE Research Online Documents on Economics 113331, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:113331
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/113331/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Boatright, John R., 1992. "Morality in Practice: Dees, Crampton, and Brer Rabbit On a Problem of Applied Ethics," Business Ethics Quarterly, Cambridge University Press, vol. 2(1), pages 63-73, January.
    2. Gregory Dees, J. & Cramton, Peter C., 1991. "Shrewd Bargaining on the Moral Frontier: Toward a Theory of Morality In Practice," Business Ethics Quarterly, Cambridge University Press, vol. 1(2), pages 135-167, April.
    3. Moshe Banai & Abraham Stefanidis & Ana Shetach & Mehmet Özbek, 2014. "Attitudes Toward Ethically Questionable Negotiation Tactics: A Two-Country Study," Journal of Business Ethics, Springer, vol. 123(4), pages 669-685, September.
    4. Filipe Sobral & Gazi Islam, 2013. "Ethically Questionable Negotiating: The Interactive Effects of Trust, Competitiveness, and Situation Favorability on Ethical Decision Making," Journal of Business Ethics, Springer, vol. 117(2), pages 281-296, October.
    5. Dees, J. Gregory & Cramton, Peter C., 1995. "Deception and Mutual Trust: A Reply to Strudler1," Business Ethics Quarterly, Cambridge University Press, vol. 5(4), pages 823-832, October.
    6. Hess, David & Dunfee, Thomas W., 2007. "The Kasky-Nike Threat to Corporate Social Reporting: Implementing a Standard of Optimal Truthful Disclosure as a Solution," Business Ethics Quarterly, Cambridge University Press, vol. 17(1), pages 5-32, January.
    7. Strudler, Alan, 1995. "On the Ethics of Deception in Negotiation," Business Ethics Quarterly, Cambridge University Press, vol. 5(4), pages 805-822, October.
    8. Cheryl Rivers & Roger Volkema, 2013. "East–West Differences in “Tricky” Tactics: A Comparison of the Tactical Preferences of Chinese and Australian Negotiators," Journal of Business Ethics, Springer, vol. 115(1), pages 17-31, June.
    9. Zhenzhong Ma & Dapeng Liang & Honghui Chen, 2013. "Negotiating with the Chinese: Are They More Likely to Use Unethical Strategies?," Group Decision and Negotiation, Springer, vol. 22(4), pages 641-655, July.
    10. Zhenzhong Ma, 2010. "The SINS in Business Negotiations: Explore the Cross-Cultural Differences in Business Ethics Between Canada and China," Journal of Business Ethics, Springer, vol. 91(1), pages 123-135, February.
    11. Johannes Abeler & Daniele Nosenzo & Collin Raymond, 2019. "Preferences for Truth‐Telling," Econometrica, Econometric Society, vol. 87(4), pages 1115-1153, July.
    12. Zhang, Jian-Dong & Liu, Leigh Anne & Liu, Wu, 2015. "Trust and Deception in Negotiation: Culturally Divergent Effects," Management and Organization Review, Cambridge University Press, vol. 11(1), pages 123-144, March.
    13. Croson, Rachel & Boles, Terry & Murnighan, J. Keith, 2003. "Cheap talk in bargaining experiments: lying and threats in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 143-159, June.
    14. Jordi Brandts & Gary Charness, 2003. "Truth or Consequences: An Experiment," Management Science, INFORMS, vol. 49(1), pages 116-130, January.
    15. Rebecca Guidice & G. Alder & Steven Phelan, 2009. "Competitive Bluffing: An Examination of a Common Practice and its Relationship with Performance," Journal of Business Ethics, Springer, vol. 87(4), pages 535-553, July.
    16. Gunia, Brian C. & Levine, Emma E., 2019. "Deception as competence: The effect of occupational stereotypes on the perception and proliferation of deception," Organizational Behavior and Human Decision Processes, Elsevier, vol. 152(C), pages 122-137.
    17. Reitz, H. Joseph & Wall, James Jr. & Love, Mary Sue, 1998. "Ethics in negotiation: Oil and water or good lubrication?," Business Horizons, Elsevier, vol. 41(3), pages 5-14.
    18. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    19. Mara Olekalns & Carol Kulik & Lin Chew, 2014. "Sweet Little Lies: Social Context and the Use of Deception in Negotiation," Journal of Business Ethics, Springer, vol. 120(1), pages 13-26, March.
    20. Wayne Norman, 2011. "Business Ethics as Self-Regulation: Why Principles that Ground Regulations Should Be Used to Ground Beyond-Compliance Norms as Well," Journal of Business Ethics, Springer, vol. 102(1), pages 43-57, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Denise Fleck & Roger J. Volkema & Sergio Pereira, 2016. "Dancing on the Slippery Slope: The Effects of Appropriate Versus Inappropriate Competitive Tactics on Negotiation Process and Outcome," Group Decision and Negotiation, Springer, vol. 25(5), pages 873-899, September.
    2. Kang, Polly & Schweitzer, Maurice E., 2022. "Emotional Deception in Negotiation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 173(C).
    3. Filipe Sobral & Gazi Islam, 2013. "Ethically Questionable Negotiating: The Interactive Effects of Trust, Competitiveness, and Situation Favorability on Ethical Decision Making," Journal of Business Ethics, Springer, vol. 117(2), pages 281-296, October.
    4. Nohe, Christoph & Hüffmeier, Joachim & Bürkner, Paul & Mazei, Jens & Sondern, Dominik & Runte, Antonia & Sieber, Franziska & Hertel, Guido, 2022. "Unethical choice in negotiations: A meta-analysis on gender differences and their moderators," Organizational Behavior and Human Decision Processes, Elsevier, vol. 173(C).
    5. Boles, Terry L. & Croson, Rachel T. A. & Murnighan, J. Keith, 2000. "Deception and Retribution in Repeated Ultimatum Bargaining," Organizational Behavior and Human Decision Processes, Elsevier, vol. 83(2), pages 235-259, November.
    6. Joseph P. Gaspar & Maurice E. Schweitzer, 2021. "Confident and Cunning: Negotiator Self-Efficacy Promotes Deception in Negotiations," Journal of Business Ethics, Springer, vol. 171(1), pages 139-155, June.
    7. Xiaoyi Liu & Zhenzhong Ma & Dapeng Liang, 2019. "Personality Effects on the Endorsement of Ethically Questionable Negotiation Strategies: Business Ethics in Canada and China," Sustainability, MDPI, vol. 11(11), pages 1-19, June.
    8. Cramton, Peter C. & Dees, J. Gregory, 1993. "Promoting Honesty in Negotiation: An Exercise in Practical Ethics," Business Ethics Quarterly, Cambridge University Press, vol. 3(4), pages 359-394, October.
    9. Yu Yang & David De Cremer & Chao Wang, 2017. "How Ethically Would Americans and Chinese Negotiate? The Effect of Intra-cultural Versus Inter-cultural Negotiations," Journal of Business Ethics, Springer, vol. 145(3), pages 659-670, October.
    10. Matthew Caulfield, 2021. "Pay Secrecy, Discrimination, and Autonomy," Journal of Business Ethics, Springer, vol. 171(2), pages 399-420, June.
    11. Joseph P. Gaspar & Redona Methasani & Maurice E. Schweitzer, 2022. "Emotional Intelligence and Deception: A Theoretical Model and Propositions," Journal of Business Ethics, Springer, vol. 177(3), pages 567-584, May.
    12. Johannes Abeler & Armin Falk & Fabian Kosse, 2021. "Malleability of Preferences for Honesty," CESifo Working Paper Series 9033, CESifo.
    13. Kriss, Peter H. & Nagel, Rosemarie & Weber, Roberto A., 2013. "Implicit vs. explicit deception in ultimatum games with incomplete information," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 337-346.
    14. Ronald Peeters & Marc Vorsatz & Markus Walzl, 2013. "Truth, Trust, and Sanctions: On Institutional Selection in Sender–Receiver Games," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(2), pages 508-548, April.
    15. Florian Ederer & Ernst Fehr, 2007. "Deception and Incentives. How Dishonesty Undermines Effort Provision," IEW - Working Papers 341, Institute for Empirical Research in Economics - University of Zurich.
    16. Radu, Vranceanu & Delphine, Dubart, 2019. "Experimental evidence on deceitful communication: does everyone have a price ?," ESSEC Working Papers WP1806, ESSEC Research Center, ESSEC Business School.
    17. Luis Alejandro Palacio Garcia & Brayan Snehider Díaz, 2022. "Comunicación, jugadas estratégicas y compromiso: un análisis desde la economía experimental," Apuntes del Cenes, Universidad Pedagógica y Tecnológica de Colombia, vol. 41(73), pages 17-42, February.
    18. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    19. Hoffmann, Mareike & Lauer, Thomas & Rockenbach, Bettina, 2013. "The royal lie," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 305-313.
    20. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.

    More about this item

    Keywords

    business ethics; negotiation; lying; consent; self-defence; fiduciary duty; CUP deal;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:113331. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.