Carl Seiler, Signing the Preliminary Treaty of Peace at Paris, via Wikimedia Commons.

Negotiation is commonly defined as a decision-making process by which two or more people or groups agree on how to allocate scarce resources. Negotiations do not occur in a vacuum. Rather, the organizations in which negotiations occur play an important role in influencing the behavior of individual negotiators.

Thus, the culture of an organization (e.g., whether it is focused more on value claiming rather than value creation, or on short-term benefits rather than long-term relationships) affects the behavior of those operating in it. And, regardless of environment, negotiation is a “mixed motive” interaction; negotiating parties will be motivated both to cooperate (creating value) and compete (claiming value). Additionally, most negotiations are characterized by information asymmetries. As a result, deception is pervasive.

Because negotiation involves both cooperation and competition, it raises many ethical questions. In their seminal book, What’s Fair? (public library), Wheeler and Menckel-Meadow explore the intricacies of ethics in negotiations addressing questions like:

  • Under what conditions, if any, could exaggeration, misrepresentation, or withholding of information be defensible in a negotiation?
  • When are coercive tactics ethical?
  • To what extent should we use financial or legal pressure to force settlement?
  • Should we worry about whether an agreement is fair to all the parties, or about the effects our negotiated agreements might have on others?


Ideas to Apply

Areas of Research

Case Studies

Open Questions

To Learn More

IDEAS TO APPLY (Based on research covered below)

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  • Be careful about overestimating your understanding of the other side’s perspective. Parties generally overestimate the extent to which they have understood the other side’s preferences and priorities.

  • Engage a third party. Third parties can often help parties to break impasses and create more valuable agreements by (sometimes confidentially) uncovering interests and assumptions that parties have not clearly communicated.

  • Watch out for naïve realism. Naïve realism (described below) leads people (particularly in Western cultures) to assign far too much weight to personality traits in accounting for outcomes. While personality traits do have a greater influence on outcomes when parties believe there is a fixed pie to be divided, even then, personality matters less than most of us imagine; what matters more are situations and how negotiators construe them (Ross & Ward, 1995).

  • Imagine what it’s like to walk in the other side’s shoes. Negotiators who spend time imagining how the other side sees the problem generate more valuable outcomes for themselves; being empathic with the other side’s feelings has no effect (Galinsky et al., 2008).

  • Ensure that—as much as possible—all parties involved see the conflict resolution processes as fair. Cheating and unethical behavior are more likely when people believe that the process for resolving conflict or allocating resources is flawed, unfair, or illegitimate (Gino & Pierce, 2010Gino & Pierce, 2009Tyler & Blader, 2003).


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  • How do peoples’ selfish biases impact negotiation processes and outcomes? Self-serving biases and motivated reasoning can lead parties to justify their own “ordinary unethical behavior” (see Babcock & Loewenstein, 1997). This line of research has examined the conditions under which people are more likely to behave unethically in claiming resources or justifying particular processes or outcomes, including the role of incentives.
  • How does deception influence negotiation processes? A large body of work has focused on deception, both in the form of active deception (commissions) and passive deception (omissions). Some of this work has examined the antecedents of deception. For instance, research has shown that negotiators are more likely to engage in deception when they have high monetary incentives to do so (Tenbrunsel, 1998), and when they have leeway to justify their use of deception to themselves (Schweitzer and Hsee, 2002). Related research found that power in negotiation can corrupt. High-power negotiators bluff and lie more often than low-power negotiators (Crott, Kayser, and Lamm, 1980Boles et al., 2000). In addition, the pursuit of power can also corrupt. For instance, Malhotra and Gino (2011) found that investing in outside options to increase one’s own power enhances feelings of entitlement and licenses the use of deception in negotiation.
  • Are there interventions that are effective in reducing unethical behavior in negotiations? Research has demonstrated that negotiations are affected by how negotiators perceive the situation. When negotiations are viewed as a conflict or fight, then negotiators are more likely to be focused on value-claiming strategies rather than value-creating ones, and they are also more likely to use deception (Schweitzer et al., 2005). On the other hand, when negotiators take the perspective of their counterparties, they are able to both create and claim more resources at the bargaining table (Galinksy et al., 2008).
  • What about ‘ethical externalities’? Negotiation researchers have discussed the concept of parasitic integration (Gillespie and Bazerman, 1997). This concept refers to situations in which the value created at the bargaining table imposes costs on parties that are not represented. For instance, two companies offering similar products might try to negotiate a collusion agreement to raise prices. Although this would create value for both companies, it comes at the expense of consumers. This arrangement would be parasitic because the benefits achieved by the two companies come at the expense of others.


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Here are two cases that show a failure to reach value-creating deals because of a focus on power and value claiming strategies:



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  • How do cultural norms or expectations affect judgments about what is “ethical” in a particular bargaining or negotiation situation?

  • What are the ethical obligations of a negotiator, and in what ways do they depend on context?

  • What are the ethical duties of third parties who seek to assist negotiations.
    • To what extent should a third party remedy major imbalances in power between parties?
    • What kinds of disclosures should a third party make?
    • Does the third party have an obligation to produce recommendations or agreements that are wise? Fair? Likely to be implemented? Or only to ensure that all parties are treated in accordance with established ground rules?


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  • Tenbrunsel, A. E. (1998). Misrepresentation and expectations of misrepresentation in an ethical dilemma: The role of incentives and temptation. Academy of Management Journal, 41(3), 330-339.

  • Babcock & Loewenstein (1997). Explaining bargaining impasse: the role of self-serving biases. Journal of Economic Perspectives, 11(1), 109-126.

  • Gillespie, J., & Bazerman, M.H. (1997). Parasitic Integration: Win-Win Agreements Containing Losers. Negotiation Journal, 13, 271-282.

  • Friedman & Shapiro (1995). Deception and Mutual Gains Bargaining: Are they mutually exclusive?” Negotiation Journal, 11(3), 243-253.

  • Ross & Ward (1995). Psychological Barriers to Dispute Resolution. Advances in Experimental Social Psychology, 27, 255–304.

  • Crott, H., Kayser, E., and Lamm, H. (1980). The effects of information exchange and communication in an asymmetrical negotiation situation. European Journal of Social Psychology, 10, 149-163.

Relevant Images and Videos

  • Max Bazerman in a short lecture on how we rationalize unethical behavior:

  • Larry Susskind presents a compelling technique for teaching negotiation:

  • Carrie Menkel-Meadow, in a series of short clips, discusses mediation:

  • Michael Wheeler, in a series of short clips, presents his expert take on the art of negotiation:                   

  • William Ury, in a TED talk, presents his perspicacious approach to negotiation: 

  • ​See many more clips regarding negotiation from our collaborators, other experts, plus a few clips from the silver screen, and more at our Negotiation playlist at the Ethical Systems YouTube channel

This page is overseen by Francesca Gino and Hal Movius. Other researchers may have contributed content.
Miscellaneous Links & References

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