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International Negotiation 9: 315339, 2004.

2004 Koninklijke Brill NV. Printed in the Netherlands.

315

New Research Directions

The research described in this article by Volkema, Fleck and Hofmeister-Toth builds upon the
theme of a recent issue of International Negotiation, Ethical Issues in Conflict Resolution (Vol.
7, no. 2, 2002). The authors test the implications of using deceptive tactics in negotiation. Their
research relates to the larger theme of this present issue by its use of an innovative means of
negotiation, e-mail, as the channel for the experimental exercise.

Ethicality in Negotiation: An Analysis of Attitudes,

Intentions, and Outcomes
ROGER J. VOLKEMA*
Kogod School of Business, American University, 4400 Massachusetts Ave., NW, Washington,
DC 20016 USA (E-mail: volkema@american.edu)

DENISE FLECK**
COPPEAD Graduate School of Business, Federal University of Rio de Janeiro UFRJ, Rio de
Janeiro, Brazil (E-mail: denise@coppead.ufrj.br)

AGNES HOFMEISTER-TOTH***
Marketing Department, Budapest University of Economic Sciences, Budapest, Hungary (E-mail:
agnes.hofmeister@bkae.hu)
Abstract. The study reported in this article examines the prediction and use of invalid information (e.g., exaggerated offers, false promises, misrepresented facts) in a two-party, property
leasing negotiation in which participants from different countries negotiated seven issues via

* Roger Volkema is Associate Professor of Management at the Kogod School of Business,

American University, Washington, DC. His research focuses on negotiation, conflict management, group/meeting processes, and problem formulation. He received his Ph.D. from the
University of Wisconsin, and was a Fulbright Fellow at Catholic University in Rio de Janeiro,
Brazil in 1988.
** Denise L. Fleck is an Associate Professor of Strategy at Coppead Graduate School of
Business, UFRJ, Brazil. Her research interests include corporate growth, organizational selfperpetuation, change and institutionalization processes, and innovation roles in growth
processes. She received a Ph.D. in Management from McGill University.
*** Agnes Hofmeister-Toth is Professor of Marketing at the Budapest University of
Economic Sciences and Public Administration. She teaches Consumer Behavior and
Negotiation and Conflict Management. Her research interests include cultural differences,
international negotiation, transition of consumer behavior, changing consumer values and
lifestyles, and symbolic consumption. She received her Ph.D. in Marketing from BUESPA.

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electronic mail. Prior to negotiating, attitudes and intentions towards questionable or unethical
tactics were measured, and perceived behavior was measured through a post-negotiation questionnaire and compared with actual behavior and negotiated outcomes (differential and joint).
The results suggest that the pre-negotiation questionnaire was a modest predictor of actual
behavior, with general attitudes effective in predicting general behavior. Ethical behavior of the
negotiator, ethical behavior of the other party, and perceived honesty of the other party were the
best predictors of performance (perceived and actual), while likely use of unethical tactics and
perceived honesty of the other party predicted whether or not an agreement was reached.

Keywords: negotiation, ethics, information exchange, e-mail.

Information is often cited as one of the central elements in understanding and

managing the negotiation process (McMillan 1992; Pruitt and Carnevale
1993; Rubin and Brown 1975; Shell 1999; Thompson 1998). In theory, information exchange can help build trust between parties, which in turn can lead
to a fuller, richer exchange of information and, ultimately, better joint/integrative outcomes. On the other hand, information is a source of power, so the
more information one party has about a counterparts strengths and weaknesses (preferences, priorities, alternatives), the stronger his/her bargaining
position (Brodt 1994; French and Raven 1959; Lewicki, Saunders and Minton
1999; Schelling 1960; Walton and McKersie 1965). Consequently, negotiators
are faced with the challenge of determining how much and what types of information to reveal while assessing their negotiating counterparts honesty and
forthrightness.
The types of information that individuals might employ in a negotiation can
range from valid and relevant information (e.g., a statement of fact critical to
the outcome of the negotiation) to erroneous or invalid information (e.g., an
intentional misstatement of fact). While the former has been the focus of a
number of studies, generally linking valid information exchange to negotiator performance (Pruitt and Lewis 1975; Olekalns, Smith and Walsh 1996;
Roth and Murnighan 1982; Thompson 1991), there have been far fewer studies focused on the exchange of invalid information, such as through misrepresented facts, false promises, and bluffs.
Several studies have documented the frequent use of invalid information in
real and simulated negotiations (Boles, Croson and Murnighan 2000;
Murnighan, Babcock, Thompson and Pillutla 1999; OConnor and Carnevale
1997), and at least one questionnaire (the Incidents in Negotiation
Questionnaire or SINS questionnaire, developed by Lewicki and his colleagues) has been designed to measure individuals perceptions of the appropriateness and their likely use of these tactics, although no empirical evidence
exists linking the questionnaire to actual behavior. Most importantly, it seems

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likely that invalid information such as misrepresented facts, false promises,

and bluffs could affect both the process (pace, openness, responsiveness) and
the outcome of a negotiation (perceived and actual). These relationships,
however, have received only modest attention by researchers and scholars.
In an international context, the cultural values of the principal negotiators,
their familiarity with one another, and their physical proximity could moderate the use of invalid information. While there exist both anecdotal and empirical evidence regarding the differing values and behaviors to expect in
cross-cultural negotiations (cf. Puffer and McCarthy 1995; Schuster and
Copeland 1996; Volkema 2004), the inherent uncertainty in these negotiations
often leads the parties to engage one another with caution if not suspicion
(Hopmann 1996; Ikl 1964). This is further exacerbated by the increasing
reliance on media of lower information richness (e.g., electronic mail) in
international negotiations (Shell 2001; Ulijn, Lincke and Kavakaya 2001),
media that offer apparent efficiencies but which may be associated with greater
use of questionable or unethical tactics (Daft and Lengel 1986; Daniels 1967;
Tinsley et al. 2002; Valley, Moag and Bazerman 1998).
This article reports on a study of predicted and actual use of invalid information in a two-party, commercial-property leasing negotiation, which was
conducted via electronic mail. Invalid information was measured in three
ways: first, through a questionnaire (the Incidents in Negotiation Questionnaire) to assess attitudes and intentions towards questionable or unethical tactics; second, through participants self-reporting of their behavior in this
property leasing negotiation; and third, through third-party measures of actual
behavior. The purpose of the study was to determine the frequency of use of
questionable or unethical tactics in an e-mail-based, international negotiation,
to assess the questionnaires utility in predicting actual use of these tactics, and
to assess the impact of the tactics on differential and joint outcomes (perceived
and actual). By understanding the impact of these tactics on negotiation outcomes, we can begin to understand the rationales of negotiators faced with differing challenges (high stakes, time constraints, media limitations, competitive
or unethical opponents/counterparts) in an international context.

Background and Hypotheses

Information exchange is generally considered one of the keys to understanding and managing the negotiation process (Pruitt and Carnevale 1993;
Pruitt and Rubin 1986; Shell 1999; Thompson 1998; Walton and McKersie
1965). Information can take a number of forms, based on its relevancy and
validity. Relevant information, for example, might include a negotiators

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needs, alternatives, resources, utilities, and style (Chatterjee and Ulvila 1982;
Fisher, Ury and Patton 1991; Harsanyi 1962; Pinkley, Griffith and Northcraft
1995). In addition, negotiators frequently share valid information that is not
directly relevant to the issues of a negotiation (e.g., discussions of traffic,
weather, current events, hobbies), which can assist the parties in getting comfortable, building rapport, and reaching agreement (Lewicki et al. 1999;
Thompson, Peterson and Kray 1995).
The exchange of valid, relevant information has been found to predict both
differential and joint outcomes. Roth and Murnighan (1982), Brodt (1994), and
Olekalns, Smith and Walsh (1996) all found that parties with an informational
advantage performed better than their peers or negotiating counterparts with
respect to substantive outcomes. Likewise, several researchers have found that
information exchange can be positively associated with higher joint outcomes, most notably when that information is about the parties interests or priorities (Olekalns et al. 1996; Pruitt and Lewis 1975; Thompson 1991).
Negotiators also communicate invalid or misleading information in the
form of exaggerated offers, misrepresented facts, and false promises of future
business opportunities (Anton 1990; Scouller 1972). These communications,
in fact, have been found in several studies to occur with some degree of frequency. OConnor and Carnevale (1997), for example, discovered that participants misrepresented information in 28% of their negotiations in a
laboratory study. Murnighan et al. (1999) compared experienced and naive
bargainers, and found that 34% of the former both lied (i.e., made an invalid
statement) and were deceptive (i.e., failed to correct a counterparts faulty
assumptions). Boles et al. (2000) found that participants in a laboratory negotiation were deceptive about 13% of the time, with more deception occurring
in the early rounds of negotiation. In addition, they noted that the individuals
making propositions were far more likely to outright lie than were the individuals responding to propositions.
There are a number of reasons why individuals may choose to use invalid
information in a negotiation. These include the financial stakes (Boles et al.
2000; Kelley, Beckman and Fischer 1967; Tenbrunsel 1998), perceived time
pressure (Yukl, Malone, Hayslip and Pamin 1976), environmental competitiveness (Hegarty and Sims 1978), and their own personal characteristics/values (Hegarty and Sims 1978; Trevino and Youngblood 1990). The last of these
factors personal characteristics/values will likely be influenced by the individuals cultural frame-of-reference (Banas and McLean Parks 2002; Faure
2002, Volkema 2004).
Invalid information can take several different forms, from generally
accepted behaviors like exaggerating an offer or demand to less accepted
behaviors such as making false promises. Lewicki (1983), building on the

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work of Bok (1978) and others, developed a questionnaire (Incidents in

Negotiation Questionnaire) and typology of lying and deception in negotiation that consists of five categories: traditional competitive bargaining (e.g.,
exaggerating an initial offer or demand), misrepresentation of information (i.e.,
lying about an informational item), bluffing (i.e., leading your counterpart to
believe that you are in control of consequences which you are not, such as
through promises you may not be able to fulfill), inappropriate information
collection (e.g., various forms of bribery, such as paying others for information), and influencing a counterparts professional network (e.g., encouraging
others to defect). Subsequently, Lewicki and Robinson (1998) and Volkema
(1999a, 2004) have employed this questionnaire to examine differences in
perceptions due to demographic factors.
While the Incidents in Negotiation Questionnaire appears to be a useful
tool in assessing attitudinal differences, there have been few studies to confirm
the predictive validity of the instrument (Banas and McLean Parks 2002). The
questionnaire measures individuals perceptions of the appropriateness of
questionable negotiating tactics and their likelihood of using those tactics, not
actual behavior. Robinson, Lewicki, and Donahue (2000) associate perceptions of appropriateness with attitudes, while likelihood of use corresponds to
behavioral intentions.
There is, however, a long history of research that links attitudes, intentions,
and behavior (for a review see Ajzen 1988). Attitudes have been found to predict behavior, with behavioral intentions acting as a mediating variable.
Further, specific attitudes appear better at predicting specific behaviors, while
general attitudes are better at predicting general behaviors.
In a meta-analysis of over one hundred studies, Kim and Hunter (1993)
found significant support for these linkages between attitudes, intentions, and
behavior, particularly where an individuals actions fall within his/her control.
Given that this is the case for most of the negotiating tactics identified by
Lewicki and his colleagues, we propose the following:
Hypothesis 1: Attitudes and intentions towards questionable or unethical
negotiating tactics (high perceived appropriateness and likely use, as measured by the Incidents in Negotiation Questionnaire) will be positively
associated with self-reported and actual use of those tactics.
Despite the apparent frequency with which invalid information appears to
be employed, there have been relatively few studies that have examined the
influence of invalid information on negotiation outcome. Roth and Murnighan
(1982) found that the party with the larger outcome (payoff) and an informational advantage was inclined to misrepresent his or her outcome to his/her
ultimate advantage, while OConnor and Carnevale (1997) found that subjects

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ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH

who misrepresented information achieved higher outcomes. These studies,

however, focused only on individual outcomes (i.e., comparing a negotiators
outcome with his or her peers performance) or differential outcome (i.e., comparing a negotiators outcome with his/her negotiating counterparts performance), not joint or integrative outcomes (which are based on the combined
performance of parties in a dyadic negotiation), and only on misrepresentation
of information. Other tactics in the typology identified by Lewicki and his colleagues (e.g., bluffing) were not examined.
It would seem reasonable that individual outcomes as well as differential
outcomes would increase with the use of unethical tactics, as ones counterpart is making decisions based on erroneous information. The communication
of false or deceptive information might even create a sense of openness and
trust on the part of the other party, causing him/her to share additional valid
information. The use of such tactics would likely have the opposite effect on
joint outcomes, decreasing with the use of unethical tactics and vice versa. For
example, by not exaggerating an initial offer or misrepresenting information,
the parties may actually negotiate a settlement that comes closer to their
mutual benefit rather than benefiting one party (the party exaggerating an offer
or misrepresenting information) at the expense of the party.
Given these arguments, the following hypothesis is offered:
Hypothesis 2: The more questionable or unethical tactics an individual
employs, the higher will be his/her actual outcome, the higher his/her differential outcome, and the lower the joint outcome.
In addition, it would be valuable to know what effect questionable or unethical tactics have on perceived outcomes. Negotiators seldom know the actual
payoff (differential or joint outcome) in real-world negotiations, since they seldom know the utilities and winnings of the other party (Putnam and Jones
1982). Instead, they make their decisions regarding whether or not to engage
in future negotiations based on perceived outcomes. Brodt (1994) did one of
the few studies that examined the effects of information on perceived outcome,
and found that informed parties were significantly more positive about their
performance than were their uninformed peers. However, the inside information that was shared with these parties came from a third party, so the validity
of the information might not have been questioned.
We might assume that the individual using questionable tactics believes
he/she has an advantage over the other party, since this individual knows that
the other party is making decisions based on erroneous information. Therefore,
the negotiator would expect that his/her outcome would exceed the other
partys performance, and that as a consequence their joint outcome might suffer as well (assuming there is no opportunity to increase a fixed-pie outcome
for both parties). Thus,

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Hypothesis 3: The more questionable or unethical tactics an individual

employs, the higher will be his/her perceived outcome, the higher his/her perceived differential outcome, and the lower the perceived joint outcome.
Finally, many of the studies conducted to date assume that an agreement will
be reached by the negotiating parties. In reality, this is not always the case. In
fact, many authors advise negotiators to develop alternatives to a negotiated
agreement as a way of protecting themselves against a bad deal; sometimes the
best alternative is to walk away (Fisher, Ury and Patton 1991; Thompson 1998;
Volkema 1999b).
There are a number of factors that might lead one or both negotiators to back
away from an agreement, including the terms of the agreement (which may not
allow a negotiator to reach his/her breakeven point) or the perceived ethicality of either party. As Tenbrunsel (1998) noted, the use of unethical tactics
can actually create a cycle of distrust when individuals project their own
circumstances and unethical behavior onto others. If either party perceives
the other party as being untrustworthy (for example, as a result of grossly
exaggerated offers or demands, the introduction of questionable facts, or contradictory statements), the deal may seem too risky to consummate. The more
a negotiator employs such tactics, the greater the likelihood of suspicion
being raised.
Given this reasoning, the following is hypothesized:
Hypothesis 4: The more questionable or unethical tactics an individual
employs, the greater the likelihood of not reaching an agreement.

Method
Participants
The participants in this study were sixty-six graduate business students taking
courses in negotiation, thirty-three of whom were taking a course offered in
Rio de Janeiro, Brazil. This group included individuals from Brazil and
France, ranging in age from 22 to 37 years old (mean = 26.3). Sixty-one
percent of the subjects were male. Each of these students was paired with a
student taking a comparable course at another university in Budapest,
Hungary. The students taking the course in Budapest came from a number of
different countries, including Hungary, Germany, the Netherlands, Greece,
Russia, Mexico, and the United States. All participants were fluent in English,
which was the primary language of their courses.

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ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH

Procedure
The subjects participated in a two-party, property leasing negotiation, as
described in Volkema (1999b). The thirty-three graduate students in Brazil represented a company called Logan Telecommunications, which was interested
in expanding its operations in a new geographic area. As such, they were interested in leasing 300 square meters of commercial space. The other party
(graduate students in Hungary) represented RJW Properties, Inc., a real estate
firm with properties in the desired area.
In addition to background information about their company, each representative was given a scoring table with seven critical issues to be negotiated.
The seven issues included cost per square meter, duration of lease, renovations,
cost of utilities, parking space, furnishings, and advanced payment. Depending
upon the outcome negotiated for an issue, the individual earned a certain number of points (Table 1). Because some of the issues were worth more points to
the representative of Logan Telecommunications than to the representative of
RJW Properties, and vice versa, negotiators had an opportunity to maximize
their joint score as well as their individual and differential scores. Multi-issue
simulations of this type have been used effectively in a number of prior studies (cf. Olekalns et al. 1996; Thompson 1991).
The negotiation took place via electronic mail, which allowed for collection
of all dialogue. All communications were in English, and participants had fourteen days to complete the negotiation. This time frame was deemed more than
sufficient, based on prior testing of the simulation, both in person and via the
internet. All negotiating dyads remained the same throughout the study.
Three weeks prior to commencing the negotiation, the thirty-three individuals representing Logan Telecommunications were asked to complete the
Incidents in Negotiation Questionnaire. (Note: There have been several versions of this questionnaire.) This questionnaire, developed by Lewicki and his
colleagues (Lewicki and Robinson 1998; Robinson et al. 2000), asks respondents to rate the appropriateness and likelihood of using eighteen tactics or
behaviors, rating each behavior on a 7-point Likert scale (for appropriateness:
1 = not at all appropriate, 7 = very appropriate; for likelihood of use: 1 = not
at all likely, 7 = very likely). The tactics consist of a range of behaviors with
respect to ethicality, from generally accepted competitive tactics (e.g., exaggerating an offer or demand, hiding ones bottom line) to tactics involving
the other partys professional network (e.g., seeking to discredit ones opponent with his or her supervisor). The questionnaire indicates that there are
no right answers regarding the right or wrong thing to do, so respondents are
encouraged to be candid in their answers. All respondents were assured
confidentiality.

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ETHICALITY IN NEGOTIATION

Table 1. Issues, negotiated outcomes, and point values

Issue

Negotiated outcome

Point value
Logan Telecom.

RJW Properties

Cost per square meter

$500
$600
$700
$800
$900

900
750
600
450
300

300
450
600
750
900

Renovation of space

No rooms renovated
One room
Two rooms
Three rooms

150
400
500
600

250
200
150
100

Utilities included

None
Water/sewer
Water/sewer/electricity

100
150
200

300
200
100

Length of lease

One year
Two years
Three years
Four years

500
450
300
200

200
500
700
900

Parking available

No cars
One car
Two cars
Three cars
Four cars

100
300
500
600
650

300
250
200
150
100

Furnishings

None
Refrigerator/stove

100
350

100
150

Advanced payment

One month
Six months
One year

500
350
150

200
600
900

Maximum

3700

3700

Minimum

1100

1100

On the final day of the negotiation (following collection of e-mail transcripts),

participants completed a second questionnaire in which they were asked to
indicate how well they thought they had performed in the negotiation and how
well they thought the other party had done (both on 7-point Likert scales,
where 1 = not well and 7 = very well), which tactics they had used (i.e., misrepresentation of factual information, making promises that could not be kept,
exaggerating an opening demand or offer, pretending not to be in a hurry), and

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ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH

overall how honest they had been and how honest they thought the other party
had been in the negotiation (on 7-point Likert scales, where 1 = not very honest/ethical and 7 = very honest/ethical). The method of asking participants to
report in a post-experiment questionnaire on tactics and information
exchanged has been employed successfully in other studies of bargaining and
negotiation (cf. Boles et al. 2000; Murnighan et al. 1999). All post-negotiation
questionnaires were confidential.
Independent and Dependent Measures
To gain insight into the predictive validity of the Incidents in Negotiation
Questionnaire, the 7-point Likert ratings of appropriateness and likely use
were taken for all eighteen tactics, including four focal tactics pretending not
to be in a hurry (when you were), exaggerating an offer or demand, misrepresenting information, and making promises that could not or would not be
kept. These four focal tactics each had the potential of being employed during the actual negotiation. Other tactics, such as talking directly to the people
to whom an opponent reports in order to undermine the negotiation or intentionally misrepresenting the progress of negotiations to the press, are techniques could not be affected by participants in this negotiation. Still other
approaches, such as hiding ones bottom line, could not be easily measured by
third parties reviewing transcripts of the negotiation. Overall measures were
calculated as the sums of the ratings for the four focal tactics as well as for all
eighteen tactics for appropriateness and likely use, respectively (Robinson
et al. 2000). Self-reported use of the four focal tactics was taken from the
post-negotiation questionnaire. In addition, participants also were asked to
indicate on this questionnaire their overall honesty in the negotiation (as previously detailed).
Actual behavior for each negotiator (Logan Telecommunications and RJW
Properties) was determined by three individuals independently reviewing
printed transcripts of the e-mail negotiations. These individuals, who did not
know the value of the negotiated outcomes at the time of their review,
identified incidents of the four focal tactics. Using the Estimate-DiscussEstimate approach (Nutt 1992), their independent assessments were compared
and any differences were resolved through discussion. An overall measure of
ethicality for each participant was determined by adding the occurrences of
these questionable or unethical behaviors across categories. For exaggerating
an offer or demand, only those offers/demands that were outside the specified
range shown in Table 1 were counted as exaggerated offers.
To determine the influence of ethics on performance, several measures of
outcome were taken. Perceived outcomes were based on self-assessments

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325

recorded on the post-negotiation questionnaire, where subjects were asked to

indicate how well they thought they had done in the negotiation and how well
they thought the other party had done (as previously detailed). Perceived differential outcome was the difference in these point values (self minus other),
while perceived joint outcome was calculated as the sum of these values.
Actual outcome was measured by totaling the point values for each of the
seven issues negotiated (Table 1). Given that the simulation allowed for both
differential and joint outcomes, the difference in scores between an individual
and his/her counterpart (differential outcome) was calculated, as well as the
sum of their scores ( joint outcome).
Analyses
Hypotheses 13 were tested using regression analyses, while Hypothesis 4 was
tested using discriminant analysis. Since perceived and actual ethical behavior of the other party in the negotiation might influence the outcomes predicted
by Hypotheses 2 and 3, these variables were included as independent variables
in these analyses. Due to dependency concerns with data from negotiating
dyads (e.g., highly correlated outcome measures within dyads), only outcome data from Logan Telecommunications representatives were analyzed in
testing hypotheses (Kenny 1995).

Results
From the Incidents in Negotiation Questionnaire, respondents indicated that
pretending to be in no hurry was the most appropriate of the four focal tactics
(mean = 5.94, SD = 1.39), followed closely by exaggerating an offer or
demand (mean = 5.52, SD = 1.44), misrepresenting information (mean =
3.85, SD = 2.15), and making promises that could not or would not be kept
(mean = 2.15, SD = 1.37) (Table 2). Of these four tactics, participants indicated
that they would be most likely to pretend to be in no hurry (mean = 5.21, SD
= 1.75), followed by exaggerate an offer or demand (mean = 5.15, SD = 1.52),
misrepresent information (mean = 3.88, SD = 1.98), and make false promises
(mean = 1.79, SD = 1.02). As these numbers suggest, participants generally felt
that it was more appropriate to use each tactic than they indicated they were
likely to do (supported by t-tests at the .05 level for pretending to be in no
hurry, and at the .10 level for exaggerating an offer or demand and for making
false promises.)
Consistent with findings reported elsewhere (cf. Volkema 1997), the correlations between attitudes (appropriateness) and intentions (likely use) were all

5.52

3.85
2.15
66.82

5.21
5.15
3.88

1.79

59.06

.24
.73
.73
.03
6.12
4.81

.06
.30

2.67

.00
3.03

2. Exaggerate offer

3. Misrep. info.
4. Make promises
5. All tactics

Intentions
6. Pretend no hurry
7. Exaggerate offer
8. Misrep. info.

9. Make promises

10. All tactics

Self-reported Behavior
11. Pretend no hurry
12. Exaggerate offer
13. Misrep. info.
14. Make promises
15. Honesty self
16. Honesty other

Actual Behavior
17. Pretend no hurry
18. Exaggerate offer

19. Misrep. info.

20. Make promises

21. All Tactics

.00
2.77

2.57

.24
.47

.44
.45
.91
.17
1.02
1.94

12.71

1.02

1.75
1.52
1.98

2.15
1.37
16.92

1.44

1.39

.20

.18

.20
.08

.23

.20

-.09
.32 t

-.11
.32 t
.23
-.56 ***
-.11
-.02

.14

.48**

-.08
-.03
.23
.14
.16
-.18

.06

.01
.71***
.10

.20
-.07
.20

.06

.43*
.23
.53***

.53**
.05
.56***

.24

N = 33, t p < .10, * p < .05, ** p < .01, *** p < .001

5.94

Attitude
1. Pretend no hurry

SD

.36 *

-.03

-.02

.31

-.12
.02

.04
.02
-.02
.24
-.17
.07

**

.48**

.44

.27
.28

.02
-.07
.42 *
.18
-.30 t
.24

.70***

.23

.65***
.34*

.30 t
-.05
.63***

.13
-.06
.31 t

.52**

.38*
.23

.14
.12
.54 ***
.26
-.28
.13

.47**

.10

.34 t
.12
.85***

.30 t
.68***

.12

.09

.19
.11

.10
-.24
.04
.18
-.09
.00

.61***

.11

.31 t
.44**

-.01

-.06

-.03
.29

.08
.15
.14
-.49 **
-.05
-.21

.28

.20

.11

.39*

.37 *

.33

.21
.24

-.06

-.08

.05
.01

.04
.33 t
-.18
.01
.54*** .17
.28
-.14
-.24
-.09
.12
.12

.67***

.20

.35*

.31

.23
.27

.08
-.42 *
.48 **
-.03
-.28
.20

10

.02

-.04

.45 **
.09

.19
.17
-.10
-.07
.01

11

-.24

-.27

-.13
.11

-.11
.11
.14
-.03

12

.55 ***

.53

***

.36 *
.13

-.14
-.33 t
.32 t

13

-.20

-.19

-.05
-.12

.15
.11

14

-.06

.03
.21

16

-.52** -.02

-.48

**

-.41 *
-.21

-.01

15

.11

18

.46** .28

.39 *

.11

17

20

.98***

19

326

Mean

Variables

Table 2. Descriptive Statistics and Correlation Matrix for Attitudes, Intentions, and Behaviors a

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significant. Specifically, the correlation for pretending to be in no hurry was

.43 (p < .05), the correlation for exaggerating an offer was .71 (p < .001), the
correlation for misrepresenting information was .85 (p < .001), and the correlation for making a promise that could not or would not be kept was .65
(p < .001). The correlation between attitudes and intentions for all eighteen tactics in the questionnaire was .70 (p < .001).
Eight of the thirty-three focal participants (24.2%) indicated on the postnegotiation questionnaire that they had pretended not to be in a hurry (mean
= .24, SD = .44), while twenty-four participants (72.7%) felt that they had
exaggerated an offer or demand during the negotiation (mean = .73, SD = .45).
Fifteen individuals (45.5%) indicated that they had misrepresented information, from one to three times (mean = .73, SD = .91). One person indicated that
he/she had made a promise that could not or would not be kept (mean = .03,
SD = .17). On a scale from one to seven, where seven means very honest/ethical, participants indicated a mean honesty in their negotiations of 6.12 (SD =
1.02). Their mean perceived honesty of the other party was 4.81 (SD = 1.94).
Thus, overall the thirty-three representatives of Logan Telecommunications
felt that they had been more honest than their negotiating counterparts at RJW
Properties (t = 3.29, p < .01).
In terms of actual behavior (as determined from transcripts), two individuals (6.1%) pretended to be in no hurry (when they actually were in a hurry),
while ten individuals (30.3%) were found to have exaggerated an offer or
demand. Twenty-four (72.7%) misrepresented information, from one to ten
times (mean = 2.67, SD = 2.57). No one was found to have made a promise
that could not be kept. Overall, twenty-seven (81.8%) of the thirty-three
participants representing Logan Telecommunications used at least one of the
four focal tactics. These overall numbers were comparable for those individuals representing RJW Properties twenty-five (75.8%) used at least one of
the tactics.
There were sizeable correlations between several of the self-reported behaviors and actual behaviors. The correlation between participants perception of
pretending to be in no hurry and their actual use of this tactic was .45 (p < .01),
while the correlation between perceived misrepresentation of information
and actual misrepresentation was .53 (p < .001). The correlation between perceived exaggeration and actual exaggeration, while positive (.11), was not
significant. (The fact that more individuals reported exaggerating offers than
were actually counted is likely due to the fact that only offers or demands that
were outside the specified ranges shown in Table 1 were counted as exaggerated offers, while some individuals may have exaggerated within a specified
range for a given issue.) Overall, participants perceptions of their honesty
were highly correlated with actual use of these tactics (r = .52, p < .01). That

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ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH

is, the more honest a participant judged himself/herself to be in this negotiation, the less he or she actually used these questionable or unethical tactics in
the negotiation.
The correlations between participants specific attitudes and their actual
behavior and between intentions and actual behavior were all positive, but
at best marginally significant (Hypothesis 1). The only significant findings
were for exaggerating an offer (attitude: r = .32, p < .10) and misrepresenting
information (attitude: r = .31, p < .10; intentions: r = .33, p < .10). However,
participants ratings for all attitudes and all intentions were significantly correlated with actual behavior for all tactics (attitude: r = .48, p < .01; intentions:
r = .35, p < .05).
In terms of performance, twenty-two of the thirty-three pairs of negotiators
completed their negotiations. For those reaching an agreement, the scores for
the negotiators representing Logan Telecommunications ranged from 2550 to
3000, with a mean of 2777.27 (SD = 119.25), while the scores for their counterparts (representing RJW Properties) ranged from 2400 to 3050 (mean =
2675.00, SD = 183.71). The differential outcome for the focal participants
ranged from 400 to 600 (mean = 102.27, SD = 284.30). The joint outcome
ranged from 5300 to 5700 (mean = 5452.27, SD = 122.94).
Regression analyses revealed that the Incidents in Negotiation Questionnaire did predict both self-reported and actual behavior (Table 3). With
appropriateness and likelihood of use of the four focal tactics as the independent variables, participants appropriateness ratings for the sum of the four tactics were positively associated with actual unethical behavior (b = .32, p < .10)
as well as with perceived unethical behavior (b = .42, p < .05). Participants
ratings for general appropriateness of tactics (all eighteen tactics) were positively associated with actual unethical behavior (b = .48, p < .01) and positively associated with perceived unethical behavior (b = .34, p < .05).
Therefore, the higher the perceived appropriateness of questionable or unethical tactics, the more questionable or unethical tactics the individual thought
he or she employed in the negotiation and the more tactics he or she actually
did employ, consistent with Hypothesis 1. In addition, participants ratings of
general appropriateness were negatively associated with perceived honesty in
the negotiation (b = .30, p < .10). That is, the higher the perceived appropriateness of the tactics from the questionnaire, the less honest the participant perceived himself/herself to be in the negotiation.
These results also suggest a relationship between participants perceived
honesty and their actual unethical behavior, with the latter also potentially
affected by the other partys perceived or actual behavior. When actual unethical behavior was regressed on perceived honesty of self and other as well as
actual unethical behavior of other (Table 4), the perceived honesty of self was

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ETHICALITY IN NEGOTIATION

Table 3. Results of regression analyses of actual and perceived behavior on the Incidents in
Negotiation Questionnairea
Predictor variable

Four focal tactics

Appropriateness
Likely use

Actual unethical
behavior

Perceived unethical
behavior

Perceived honesty
of self

.32
.05

.42*
.00

.09
.19

All eighteen tactics

Appropriateness
Likely use
Adjusted R2

.08

.21

F
a

.48**
.03

3.59

.15
**

9.49

.30
.13

.34*
.01
.09
*

6.67

4.14

.01

.06

1.17

3.11

n = 33
p < .10, * p < .05, ** p < .01, *** p < .001

found to be negatively associated with actual unethical behavior of self (b =

.48, p < .01) while actual unethical behavior of the other party was found to
be positively associated with actual unethical behavior of self (b = .38, p < .05).
Thus, the more honest the negotiator perceived himself/herself to be in the
negotiation, the fewer questionable or unethical tactics the individual
employed during the negotiation. The lack of a significant correlation between
perceived honesty of self and the other party (r = .01) suggests that participants did not necessarily project their own ethicality onto their negotiating
counterpart. However, the positive relationship between actual unethical
behavior of the two parties suggests that unethical behavior might breed similar behavior from the other party.
Table 4. Results of regression analysis of actual behavior on the perceived honesty of self and
honesty of othera
Predictor variable
Perceived honesty of self
Perceived honesty of other
Actual unethical behavior of other
Adjusted R2
F
a

n = 33
p < .10, * p < .05, ** p < .01, *** p < .001

Actual unethical behavior

.48**
.08
.38*
.36
9.74***

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ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH

As a follow-up analysis, the first use of a questionable or unethical behavior was examined for each representative, Logan Telecommunications and
RJW Properties (i.e., location in the sequence of e-mail messages sent by a
party where the first use of a focal tactic occurred). In twenty-two (66.7%) of
the negotiations, both parties used one or more tactics, in eight cases (24.2%)
only one party used a focal tactic, and in three cases (9.1%) neither party used
one of these tactics. In those cases where both parties employed one or more
focal tactics there was a high correlation between stages of first use (r = .64,
p < .001), suggesting that the first incidence of a questionable or unethical
behavior on the part of one negotiator was followed quickly by reciprocal
behavior on the part of the other negotiator. Furthermore, the earlier a Logan
Telecommunications representative used a questionable or unethical behavior
in the sequence of e-mail messages exchanged, the more unethical the RJW
representative was overall (r = .40, p < .05), and the earlier the RJW representative used a questionable or unethical behavior, the more unethical the
Logan Telecommunications representative was overall (r = .36, p < .10).
Outcomes (actual and perceived) were regressed on attitudes, intentions,
perceived honesty, and actual behavior (Table 5). The more questionable or
unethical tactics a party used (b = .37, p < .10) and the less honest he/she
thought the other party was in the negotiation (b = .51, p < .05), the higher
the negotiators score (the former consistent with Hypothesis 2). The more
unethical the other party, the greater the differential outcome (b = .40, p < .10)
and the smaller the joint outcome (b = .62, p < .01). These results suggest that
the perceived or actual ethicality of the other party was a better predictor of
actual outcomes than the ethics of the principal party (although, as previously
noted, unethical behavior by one party appears to promote similar behavior by
the other party).
The participants perception of the honesty of the other party and the actual
unethical behavior of the other party were the only variables significantly associated with perceived outcomes. The more honest the other party was perceived to be, the better the negotiator perceived he/she did in the negotiation
(b = .30, p < .10) and the better the negotiator perceived the other party did in
the negotiation (b = .64, p < .001). In addition, the more honest the other party
was perceived to be (b = .58, p < .001) and the more unethical the other party
actually was (b = .29, p < .10), the smaller the perceived differential outcome
(i.e., the difference between his/her perceived performance and the perceived
performance of the other party). Finally, the more honest the other party was
perceived to be, the larger the perceived joint outcome (b = .55, p < .001).
However, there was no support for a relationship between actual unethical
behavior of the Logan Telecommunications negotiators and perceived outcomes (Hypothesis 3).
As previously noted, eleven pairs of negotiators were unable to reach an

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ETHICALITY IN NEGOTIATION

Table 5. Results of regression analyses of outcomes on attitudes, intentions, perceived honesty,

and actual behaviora
Predictor variable

Attitude/intentions
(Incident in Negotiation
Questionnaire, 18 tactics)
Appropriateness
Likely use
Perceived honesty
Self
Other

___Actual outcome____
Self Differential Joint

_____Perceived outcome______
Self Other Differential Joint

.25
.11

.04
.01

.18
.14

.20
.15

.00
.51*

.02
.25

.04
.26

.09
.30

.08
.03

.07
.16

.15
.09

.02
.64***

.05
.58***

.06
.55***

Actual unethical behavior

Self
Other

.37
.06

.15
.40

.03
.62**

.03
.04

.07
.21

.06
.29

.06
.11

Adjusted R2

.20

.12

.36

.06

.40

.28

.28

3.66*

3.80

12.64**

7.11**

13.25***

F
a

2.89 21.23***

For actual outcomes, n = 22; for perceived outcomes, n = 33.

p < .10, * p < .05, ** p < .01, *** p < .001

agreement in the allotted time (a period of two weeks, which appeared substantial for completing the negotiation). To determine if the ethics of the subjects might have played a role in predicting whether or not an agreement was
reached, a discriminant analysis was performed, with agreement/no agreement
as the dependent variable, and the mean score for appropriateness of tactics
(attitude), mean score for likely use of tactics (intentions), perceived honesty
during the negotiation, perceived honesty of the other party during the negotiation, and actual ethical behavior of each party during the negotiation as the
predictor variables. The analysis yielded a significant function (canonical
correlation = .54; Wilks lambda = .71; p < .01) involving two variables
likely use of tactics and perceived honesty of the other party. The more likely
the use of competitive or unethical tactics, the greater the likelihood that no
agreement would be reached. In addition, the less honest the other party was
perceived to be, the greater the likelihood that no agreement would be reached.
The function correctly classified 78.1% of all cases into their original groups,
which exceeds the threshold suggested by Hair et al. (1998). In addition,
Presss Q was significant (Q = 10.1, p < .01), supporting the efficacy of the
function. Strictly speaking, however, this result did not support Hypothesis 4,
which predicted that the more questionable or unethical tactics an individual
employed, the greater the likelihood of not reaching an agreement.

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ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH

Discussion
As reported elsewhere (Boles et al. 2000; Murnighan et al. 1999; OConnor
and Carnevale 1997; Scouller 1972), the use of questionable or unethical tactics in negotiating is a common phenomenon. In this study, approximately 80%
of the participants were found to use one or more of the four focal tactics. The
tactic that was used most frequently was misrepresenting information, which
was used by over 70% of the participants. In general, these percentages are
somewhat higher than the numbers reported in previous studies, which may
be due to the medium employed in this study electronic mail and the fact
that most of the dyads represented cross-cultural negotiations. At least one
study has suggested that the use of unethical tactics increases when negotiations occur via electronic mail, due in part to the inability of the other party to
read nonverbal cues which can give away intentions to deceive (Valley et al.
1998). In addition, Volkema and Fleury (2002) report that the likelihood of
unethical behavior increases when an individual is negotiating with someone
from another country, particularly a country known for its skilled negotiators.
The Incidents in Negotiation Questionnaire was found to be modestly predictive of perceived (self-reported) and actual behavior. While there were
some marginally significant relationships between perceived appropriateness
or likely use of specific tactics and the actual use of those tactics, the measure
of general appropriateness (all eighteen behaviors) was the best predictor of
actual ethical behavior. Prior research on the linkages between attitudes,
intentions, and behavior has reported significant correlations between specific attitudes or intentions and specific behaviors, and between general
attitudes or intentions and general behaviors (Ajzen 1988). The somewhat
weak finding for the former (specific-to-specific linkages) might be an artifact
of only four tactics from the questionnaire having applicability to this particular simulation. The positive link between the measure of general appropriateness and actual ethical behavior is encouraging as regards the predictive
utility of the questionnaire.
The likely use of questionable or unethical tactics, the actual use of those
tactics, and the perceived honesty of the other party were the critical variables
in predicting outcomes. The use of questionable or unethical tactics by a
party was positively associated with a partys performance, while the perceived honesty of the other party was negatively or inversely associated with
the negotiators score. Thus, a negotiator did better relative to others representing Logan Telecommunications when he/she used these questionable tactics and when he/she presumed the other party was using these tactics. In
addition, the use of questionable or unethical tactics by the other party was
associated with lower joint outcomes.

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There appears to be a reciprocating effect involving the use of questionable

or unethical tactics, as early use by one party was associated with early use by
the other party. In addition, timing appeared to influence frequency of use, as
the earlier one party used one of these four tactics, the more the other party
used questionable or unethical tactics. As already noted, exaggerating an offer
or demand was only coded as such if the offer or demand was outside the
specific ranges shown in Table 1. Since exaggeration is often one of the
first tactics employed by negotiators, going beyond specified ranges may
have sent a signal to the other party that future unethical behavior was likely
(prompting not only reciprocation but escalating use of questionable or unethical tactics).
The perceived honesty of the other party was the primary variable
significantly related to perceived outcomes. The more honest the other party
was perceived to be, the better a negotiator perceived he/she did compared to
others representing Logan Telecommunications, the poorer the individual
perceived he/she did in competition with the other party (differential outcome),
but the better the individual perceived he/she did in cooperation with the other
party ( joint outcome). Interestingly, the more honest the other party was perceived to be, the better the negotiator perceived the other party did in the negotiation. Conceivably, the other partys perceived honesty led to an increase in
exchange of valid information, or accommodation on certain issues.
There were two variables that were most effective in differentiating between
negotiations that reached agreement and negotiations that did not reach agreement likely use of questionable or unethical tactics (as measured by the
Incidents in Negotiation Questionnaire) and the perceived honesty of the
other party. The more likely the use of these tactics and the less honest ones
counterpart was perceived to be, the greater the likelihood that the parties
would not reach an agreement. It is important to note, however, that the rating
of the other partys honesty occurred at the conclusion of the negotiating
period (when it was clear no agreement would be reached). Therefore, it is conceivable that the respondent was seeking to explain or justify the failed negotiation by placing blame elsewhere. In future research, this perception might
be measured at several points throughout the negotiation, to determine if perceptions change when it first appears that no agreement will be reached.
The significant positive relationship found between subjects self-reported
behavior and actual behavior is also worth noting, as such findings have not
always been reported by researchers. In general, restricting the recall of an
event to a short and recent reference period and providing specific recall cues
can help improve recall (Gilbert, Fiske and Lindzey 1998). However, individuals still may choose to misreport events when social capital is at stake. The
high correlation between self-reported behavior and actual behavior found in

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ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH

this study may be due to the fact that participants knew transcripts of their
exchanges would be available to others (e.g., the researchers) for verification.
While this finding requires further study, it suggests one way of increasing the
validity of self-report data of this type, where the issue is more one of honesty
in reporting than accuracy in reporting behaviors.
These findings have some direct implications for practitioners. First, as
reported in prior research, the use of questionable or unethical tactics is commonplace among negotiators (approximately 80% in this study used at least
one such tactic), although some tactics may be considered more acceptable
than other tactics. Thus, it is not unreasonable to assume that the other party
in a negotiation will use a questionable or unethical tactic, especially misrepresentation of information (which was the tactic used most frequently). The
use may actually increase when a medium such as electronic mail is employed
(rather than face-to-face negotiations, where nonverbal cues can be read).
Second, an individuals general attitude/intentions towards the appropriateness
and use of questionable or unethical tactics will likely translate into actual use
of such tactics. Therefore, the extent to which another partys general attitude
or intentions towards tactics can be ascertained prior to the negotiation (e.g.,
through demographic information, reputation, etc.) or early in the negotiation
(e.g., through background and anecdotal exchanges) could be valuable in
predicting the degree of unethical behavior. Third, the use of questionable or
unethical tactics will likely result in reciprocal behavior on the part of the other
party, and the earlier such tactics are employed, the more unethical the other
party is likely to be. Fourth, the more likely one is to use questionable or unethical tactics and the less honest the other party is perceived to be, the greater the
likelihood that no agreement will be reached. This could be costly if a viable
agreement is lost due to inaccurate perceptions of the other party. Whether or
not someone can easily project honesty while in fact acting unethically is
important to this finding. An ad hoc correlation analysis of participants perceptions of the other parties honesty and the other parties actual unethical
behavior was in the expected direction (r = .26) but not statistically significant
(p = .15). Fifth, perceived outcomes matter, since many times negotiators do
not know how they actually performed relative to their counterpart; a decision
to engage in future negotiations with the same party must therefore be based
on perceptions. Furthermore, based on the findings of this study, ones perceived performance (differential and joint) is likely to be tied to the perceived
honesty of the other party. The more honest the other party is perceived to be,
the less the negotiators differential advantage is perceived to be and the
larger the joint outcome is perceived to be. Finally, the use of questionable or
unethical tactics by a negotiator and the perceived dishonesty of the other party
can positively influence the negotiators actual performance. Exaggerating an

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initial offer, for example, is both a generally accepted tactic and a tactic that
can directly affect outcome by serving as an anchor around which a final settlement is reached. Cramton and Dees (Cramton and Dees 1993; Dees and
Cramton 1991), in fact, argue that a negotiator has a moral right to exaggerate an initial offer, since the other party will assume this was the case in any
event and demand the negotiator compromise on a sincere initial offer.
As with all research, there are several caveats that must be offered regarding this study and our findings. First, it should be pointed out that this negotiation took place entirely via electronic mail. While this medium has its benefits
in terms of data analysis and has been employed effectively elsewhere (Tinsley
et al. 2002), as already noted the use of questionable or unethical tactics may
vary depending on the medium and its richness (Daft and Lengel 1986;
Daniels 1967; Tinsley et al. 2002). Remote media, such as telephone and electronic mail, can induce greater competition between negotiators where trust
and honesty appear lacking (Paese, Schreiber and Taylor 2003). In addition,
as an asynchronous form of communication that is not always reliable, electronic mail introduces other issues that can complicate the development of rapport and trust between parties. Before generalizing beyond this medium,
further study is clearly warranted. Although electronic mail may be used
increasingly in negotiations over the coming years, the parties frequently
have some face-to-face contact as well, and other media such as video conferencing have begun to emerge. In one study, preliminary face-to-face contact was found to mitigate the likelihood of deadlocks in e-mail negotiations
(Shell 2001). Researchers need to recognize that other media (or combination
media) might influence ethical behavior and outcome.
It should also be pointed out that the parties in this negotiation were from
many different cultures (as is the case in most multinational organizations
these days) and had had no prior contact or the guarantee of future contact.
These factors also can affect the extent to which a party employs questionable
tactics (Volkema and Fleury 2002), and how individuals perceive the actions
(or inactions) of the other party. It is easy for a cycle of mistrust and hostility
to emerge under such conditions, which in turn can reinforce the tendency to
view oneself as good and the other party as bad or evil (Hopmann 1996).
Innocuous behaviors, such as gift-giving, extended socialization, and flexible
time orientation, which are often more common in the business practices of
non-Western cultures, suddenly become suspect (Donohue and Hoobler 2002;
Schuster and Copeland 1996). With the continued globalization of markets and
the reliance on technologies such as electronic mail to negotiate agreements
(particularly when challenging economic times limit travel), these factors
will become increasingly important.
A growing number of studies have reported the use of questionable and

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ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH

unethical tactics in both actual and simulated negotiations. These tactics are
employed in the public sector as well as the private sector, between nations as
well as multinationals. To fully understand the negotiation process, the use and
impact of these tactics needs to be better understood. This study represents one
of the first to examine some of these issues. Beyond replication, future research
needs to examine the intentions with which invalid information is employed.
Invalid information may provide a means of checking another partys knowledge base, uncovering the other partys settlement range, determining a counterparts negotiating style (e.g., cooperative, assertive), building rapport and
perceived trust, or countering another partys dishonesty, among other purposes. At the same time, we must recognize that many tactics that are perceived as unethical in one culture might be seen as acceptable practice in
another culture (Puffer and McCarthy 1995; Schuster and Copeland 1996).
Indeed, being polite may be more important than telling the truth in some cultures (Faure 2002). Future research, therefore, might seek to isolate intentions
in order to better understand their influence on behavior and performance.

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