Bluffing and Deception in Negotiations

Deception can be defined as intentionally causing someone to have false beliefs. Bluffing in negotiations involves attempting to deceive others about one’s intentions or negotiating position. In the United States, it is common, often a matter of course, for people to misstate their intentions during business negotiations. For example, suppose that Bob is selling a house and tells a prospective buyer that $350,000 is absolutely the lowest price that he will accept, when he knows that he would be willing to accept as little as $320,000 for the house (in this case, $320,000 is his “reservation price”). Such statements are lies according to standard dictionary definitions of lying—they are intentional false statements intended to deceive others. (See Carson, 1993, for an alternative definition of lying, ...