Competitive Bluffing: An Examination of a Common Practice and its Relationship with Performance

Journal of Business Ethics 87 (4):535-553 (2009)

Abstract
Bluffing, a common and consequential form of competitive behavior, has been comparably ignored in the management literature, even though misleading one's rivals is suggested to be an advantageous skill in a multifaceted and highly competitive environment. To address this deficiency and advance scholarship on competitive dynamics, our study investigates the moral reasoning behind competitive bluffing and, using a simulated market-entry game, examines the performance effects of bluffing. Findings suggest that decision makers' views on the ethicality of bluffing competitors differ from their beliefs on the ethicality of misleading other organizational stakeholders. Analysis also indicates that decision makers who view competitor bluffing as more ethical (less unethical) are more willing to engage in competitive bluffing. Finally, while bluffing is often thought to be an effective business practice, results show that in the context of repeated interaction, bluffing is not conducive to high levels of performance and, in fact, can have undesirable consequences
Keywords bluffing  competitive behavior  ethics  performance  strategic decision making
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DOI 10.1007/s10551-008-9957-z
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Is Business Bluffing Ethical?Albert Z. Carr - forthcoming - Essentials of Business Ethics.
Judgement Under Uncertainty: Heuristics and Biases.Daniel Kahneman, Paul Slovic & Amos Tversky - 1985 - British Journal for the Philosophy of Science 36 (3):331-340.
Ethical Differences Between Men and Women in the Sales Profession.Leslie M. Dawson - 1997 - Journal of Business Ethics 16 (11):1143-1152.

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