Three Schools of Bargaining Ethics
According to G. Richard Shell, as found in his book, Bargaining for Advantage: Negotiating Strategies for Reasonable People, there are three schools of bargaining ethics:
Let's take a closer look at the advantages and disadvantages of each of these schools of bargaining...
- The Poker School (“bargaining is a game") This school describes bargaining in business as very similar to playing poker. The goal is to convince your opponent to concede as much as possible with either a strong or weak hand. Ethical behavior is solely based on the law and therefore, misrepresentation of your position is appropriate and necessary to the extent that it is not blatant fraud.
- The Idealist School (“do the right thing even if it hurts”) This school treats negotiations as a part of social life and adheres to ethical standards of honesty and integrity. Omissions and refusal to answer a question are acceptable, but bluffing is not. Honesty is expected even if it hurts your position.
- The Pragmatist School (“what goes around comes around”) This school believes lying is ethical in bargaining, but is not always valuable. Lying is often harmful in the long term and should therefore be avoided. Some situations allow for bluffing, but discretion should be used.
Let's take a closer look at the advantages and disadvantages of each of these schools of bargaining...
Poker School
Advantages:
Disadvantages:
- May give you a distinct advantage against more naïve or uninformed opponents.
Disadvantages:
- Assumes others play by the same rules. Deceit in bargaining will lead to tension and mistrust in later negotiations, especially if bargaining with followers of different schools of ethics.
- Legality is often unclear. Laws vary from region to region and can even be inconsistent within a single jurisdiction.
Idealist School
Advantages:
Disadvantages:
- Can build a reputation of trustworthiness and foster strong relationships.
- Leads to more productive long-term partnerships.
Disadvantages:
- Difficult for agents to uphold.
- Can leave negotiator open to exploitation when bargaining with dishonest people.
Pragmatist School
Advantages:
Disadvantages:
- Creates a realistic view of bargaining when you are unsure of whether your opponent is an idealist or a poker player.
- Less prone to exploitation than idealists and also recognizes harmful (material) effects of lying.
Disadvantages:
- Takes greater skill to know when bluffing is appropriate.
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