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Drawing on Psychology to
Jennifer K. Robbennolt & Jean R. Sternlight
Editors’ Note: As negotiators seek to apply the legal and professional considerations that govern ethical decisions, they will inevitably be impacted by psychological factors. The authors review the research on “bounded ethicality” and find that even people who try to behave ethically can be led astray by psychological phenomena that cause them to unconsciously downplay and rationalize improper actions. Negotiators and organizations that are aware of this problem, however, can take steps outlined in the chapter to prevent themselves from inadvertently acting unethically. This chapter should be read in conjunction with Hinshaw on Ethics, Cohen on Moral Character, and Rule on Online Ethics.
Negotiators’ Ethical Challenges
The practice of negotiation is replete with ethical challenges. Whether negotiating in a personal or a professional setting and whether negotiating on behalf of oneself or for a company or client, the negotiator constantly faces the question of how honest and how forthright she ought to be about her goals, bottom line, available alternatives, and the value of any goods or services being discussed. Even the youngest negotiators face ethical challenges, whether they realize it or not. A child negotiating over her bedtime will be tempted to exaggerate her desired goal (“I want to stay up until 2 A.M.”), exaggerate how the rules are applied to other kids (“all the other kids get to stay up late on the weekends”), and lie about how the time will be used (“I promise, I will just read all night if you let me stay up”). Older negotiators continue to face similar ethical challenges. We are tempted to lie or omit information in order to gain advantage over our negotiation counterparts. May the seller of an item or service engage in “puffing” by describing that item in glowing terms? May she lie about the existence of a competing offer? Must the seller reveal any or all downsides of the good or service? Admit that she is desperate to sell? Should the buyer make the seller aware how much she loves the good or service? Reveal how much she has to spend? Admit that she has no other good source for the good or service?
The issue of how honest or forthcoming to be is not the only ethical challenge facing negotiators. For example, questions may arise regarding to whom the negotiator owes ethical duties. Should the negotiator strive only to help herself, or perhaps a client or business, or does she also owe any ethical duty to a negotiation counterpart or to a third party? If a negotiator knows that, for example, she can buy a good or service for very little but that in doing so she will take advantage of a weak seller or even cause the seller harm, should she do it? Or, if two businesses can cut a deal that will help them but harm the local community, should they do it? Similarly, is it ethically permissible to agree to a secret settlement that helps the parties, but will cause harm to the public by hiding information regarding a dangerous product?
Those who negotiate on behalf of others—lawyers, real estate agents, business executives, or sports agents—also face ethical questions related to the duties they owe to their clients or principals. [NDR: Nolan-Haley, Agents] What offers must be disclosed to the principals? How should those offers be characterized? How much pressure can an agent put on a principal to accept a particular offer? Particular negotiation tactics also raise ethical questions. For example, is it ethical to engage in negotiation merely as a stalling tactic, rather than in a legitimate attempt to reach a resolution? While all ethical challenges that confront negotiators are fascinating, this chapter focuses primarily on the question of honesty and disclosure in negotiation, using this topic as an example of the broader ethical challenges facing negotiators.
Negotiation theorists have long discussed that there can be both advantages and disadvantages to being forthright in a negotiation. On the one hand, as Russell Korobkin (2002: 223) puts it “[i]n order to engage in optimal integrative bargaining, expanding the bargaining zone as wide as possible and creating the maximum amount of cooperative surplus,...
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