Bluffs, Lies, and Consequences: A Reconceptualization of Bluffing in Buyer–Supplier Negotiations

• DOI: http://doi.org/10.1111/jscm.12155
• Date: 01 April 2018
• Published date: 01 April 2018

BLUFFS, LIES, AND CONSEQUENCES: A

RECONCEPTUALIZATION OF BLUFFING IN BUYER–

SUPPLIER NEGOTIATIONS

LUTZ KAUFMANN AND JOERG ROTTENBURGER

WHU –Otto Beisheim School of Management

CRAIG R. CARTER

Arizona State University

CHRISTIAN SCHLERETH

WHU –Otto Beisheim School of Management

Business negotiations constitute a key element of supply chain interactions

that can create additional value for both the buyer and supplier. However,

negotiations can also render the parties vulnerable to deception. While a large

body of knowledge on buyer–supplier relationships exists, research on decep-

tion and bounded ethicality in supply chain relationships is still nascent. We

advance this new research stream in behavioral supply chain management by

first conceptualizing two types of deception—bluffs and lies. Departing from

previous content-dependent conceptualizations/definitions, we define both as

convention-dependent, norms-based constructs: Bluffs (lies) are deceptions

that are palatable (unpalatable) to both parties in a buyer–supplier negotia-

tion. Second, studies 1 and 2 of our article employ Q methodology and best–

worst scaling to operationalize bluffs while refining the construct of a lie.

Third, a correlational study (study 3) examines the psychological properties/cog-

nition of a negotiator who lies, bluffs, or does neither (i.e., communicates

honestly). Fourth, a behavioral experiment (study 4) investigates the psycho-

logical consequences of bluffs, lies, and honesty for the targets. Bluffers (liars)

show low (high) degrees of moral disengagement. Targets of bluffs experience

high degrees of self-directed anger but are willing to engage in further negoti-

ations with the bluffer, while targets of lies experience high degrees of anger

directed at the liar and show a low willingness to further negotiate with the

liar. Taken together, these findings provide new insights into the dynamics of

bluffing and lying in buyer–supplier negotiations.

Keywords: buyer–supplier negotiations; deception; bluff; lie; social cognitive theory;

moral disengagement theory; Q methodology; best–worst scalin g; behaviora l experimen t

INTRODUCTION

Bluffing is nothing more than a form of lying

(Business executive quoted in Carr, 1968, p. 155).

Bluffing in business ... (is) simply game strategy

... it does not reflect on the morality of the bluffer

(Carr, 1968, p. 155).

Deception is omnipresent in daily life. While most

humans value honesty and wish to behave honestly,

recent studies demonstrate that almost no one is invul-

nerable to temptations to deceive (Mazar, Amir &

Ariely, 2008; Mazar & Ariely, 2006). Buyer–supplier

relationships form the foundation of supply chain

The authors would like to thank the editor-in-chief, associate edi-

tor, and anonymous reviewers for their valuable comments, and

Don Lange for his comments on an early draft of this manuscript.

An earlier version of the manuscript received the 2016 Academy of

Management Conference’s Conflict Management Division’s Best

Paper Award.

April 2018 49

Journal of Supply Chain Management

2017, 54(2), 49–70

©2017 Wiley Periodicals, Inc.

management (SCM) (Ellram & Cooper, 2014). The key

elements of successful collaborative buyer–supplier

relationships are commitment and trust, both of which

can be negatively affected by opportunistic behavior,

such as deception, of either the buyer or the supplier

(Handley & Benton, 2012; Moberg & Speh, 2003; Mor-

gan & Hunt, 1994). Perceptions of opportunism can

even hamper buyer–supplier relationships that are less

collaborative, such as those involving sealed bids and

reverse auctions (Carter & Kaufmann, 2007).

While deceptive behavior in buyer–supplier relation-

ships typically inflicts damage on its target, to the bene-

fit of the actor (for an example, see Wu & Choi, 2005),

it also occasionally backfires and harms both parties.

For example, in the case of the tarnished collaboration

between Ford and Lear for the 1996 Ford Taurus (Yan

& Kull, 2015), deceptive acts led to design defects, esca-

lating costs for both parties, and, ultimately, to a

strained buyer–supplier relationship. Overall, a variety

of deceptive practices exist (Carter, 2000b; Hill, Eckerd,

Wilson & Greer, 2009). Hence, there is a need for

research that distinguishes among and investigates the

different types of deception that occur in SCM contexts.

One of the key means by which buyers interface

with their suppliers is through the negotiation process

(Kaufmann & Carter, 2004; Ramsay, 2004). Negotia-

tions not only result in determining price, quality,

delivery, and other attributes of spend, but can also

set the tone for the ongoing buyer–supplier relation-

ship (Zachariassen, 2008). Given their rapid and often

real-time nature, coupled with the potentially high

stakes (Thomas, Thomas, Manrodt & Rutner, 2013)—

both for an organization and for the individual buyer

—negotiations pose fertile grounds for deceptive

behavior (Tenbrunsel, 1998).

Despite its prevalence in buyer–supplier negotiations

(Aquino & Becker, 2005), there is surprisingly little

research on deception in such contexts. The aim of

this study is twofold: first, to improve the construct

clarity of two common types of deception in business

negotiations—bluffs and lies; and second, to compare

and contrast their psychological properties and conse-

quences, demonstrating that different types of decep-

tion ultimately yield very different results for

negotiations and the buyer–supplier relationships in

which they are embedded.

Following Levine and Schweitzer (2015, p. 89), we

define deception as “the transmission of information

that intentionally misleads others.” We suggest that

both bluffs and lies constitute manifestations of decep-

tion, yet differ conceptually. Research on lying has

gained traction over the past decade. However,

researchers have devoted much less attention to bluff-

ing (Guidice, Alder & Phelan, 2009), which remains

an under-researched and disputed concept (Glac, War-

ren & Chen, 2014). Thus, investigating the

psychological properties and consequences of bluffing

first requires a delineation of the term’s meaning.

The next section of the article introduces social

cognitive theory (Bandura, 1991) and moral disengage-

ment theory (Bandura, 1999) and outlines their rele-

vance to the investigation of bluffs and lies in buyer–

supplier negotiations. We then provide an overview of

prior research on bluffing, concluding that the extant

literature lacks a clear definition due to its focus on the

content of the deception. Subsequently, we provide

convention-dependent, socially constructed (Berger &

Luckmann, 1966) definitions for bluffs and lies and con-

duct two studies to operationalize both: In study 1,

experts in business-to-business (B2B) negotiations indi-

cate their perceived difference between a bluff and a lie

using Q methodology (Watts & Stenner, 2012). In

study 2, we test for convergent validity of the results

using best–worst scaling (Dyachenko, Reczek &

Allenby, 2014; Louviere, Lings, Islam, Gudergan &

Flynn, 2013) using contrasting participants with little

or no experience in business negotiations. These two

studies yield prototype examples (Scott & Jehn, 2003)

of bluffs and lies, which we use next to investigate the

psychological properties of bluffing and lying for the bluf-

fer/liar, referred to as the actor (study 3), and the psycho-

logical consequences for the target of the bluff/lie (study

4). In doing so, we further refine the two constructs.

SOCIAL COGNITIVE THEORY AND MORAL

DISENGAGEMENT THEORY

Social cognitive theory (SCT) regards humans as self-

organizing, goal-setting, anticipating, and yet fallible

decision makers (Bandura, 1991). Whereas ethical theo-

ries typically are prescriptive in nature, SCT is predictive,

focusing on how humans actually behave rather than

how they ought to behave. Social cognitive theory posits

that humans are cultivating moral standards over the

course of their socialization and develop self-sanctions

on this basis. Working in an anticipatory manner, both

social and self-sanctions jointly ensure that humans are

aware of their moral standards and behave in line with

them (Bandura, 1999). Humans thereby monitor and

regulate their actions, engaging in those which provide

satisfaction and self-worth, while avoiding those that

lead to self-censure and cognitive dissonance.

Despite self-regulation, humans frequently fail to

withstand temptations and violate their own stan-

dards (i.e., bounded ethicality; Hill et al., 2009). Build-

ing on SCT, moral disengagement theory (MDT)

predicts that decision makers adhere to their moral

standards as long as their self-sanctions prove stronger

than the external incentives they are confronted with.

When the external inducements are strong, humans

face a dilemma: They wish to engage in actions that

benefit them yet harm their target, but can only do so

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