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

Published on Jul 1, 2009in Journal of Business Ethics3.80
· DOI :10.1007/s10551-008-9957-z
Rebecca M. Guidice8
Estimated H-index: 8
(UNLV: University of Nevada, Las Vegas),
G. Stoney Alder13
Estimated H-index: 13
(UNLV: University of Nevada, Las Vegas),
Steven E. Phelan14
Estimated H-index: 14
(UNLV: University of Nevada, Las Vegas)
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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.
  • References (77)
  • Citations (14)
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References77
Newest
Published on Dec 1, 2006in Strategic Management Journal5.57
Dax K. Basdeo1
Estimated H-index: 1
(UMD: University of Maryland, College Park),
Ken G. Smith44
Estimated H-index: 44
(UMD: University of Maryland, College Park)
+ 2 AuthorsPamela J. Derfus1
Estimated H-index: 1
(UMD: University of Maryland, College Park)
Drawing on signaling theory, we hypothesize that a firm's reputation is shaped by its own market actions and the actions of its industry rivals. We view market actions as signals that convey information about the underlying competencies of firms and influence stakeholder evaluations of them. We find that the total number of a firm's market actions, the complexity of its action repertoire, the time lag in rivals' responses to its actions, and the similarity of its repertoire with those of its riv...
Published on Aug 1, 2006in Personality and Social Psychology Review9.90
Charles F. Bond21
Estimated H-index: 21
,
Bella M. DePaulo42
Estimated H-index: 42
We analyze the accuracy of deception judgments, synthesizing research results from 206 documents and 24,483 judges. In relevant studies, people attempt to discriminate lies from truths in real time with no special aids or training. In these circumstances, people achieve an average of 54% correct lie-truth judgments, correctly classifying 47% of lies as deceptive and 61% of truths as nondeceptive. Relative to cross-judge differences in accuracy, mean lie-truth discrimination abilities are nontriv...
Published on Mar 1, 2006in Corporate Reputation Review
Suzanne M Carter1
Estimated H-index: 1
(Mendoza College of Business),
Timothy W. Ruefli22
Estimated H-index: 22
(University of Texas at Austin)
The resource-based view suggests that reputations can serve as a source of sustainable competitive advantage, but only if those reputations are durable. This research examines that durability. The authors conduct a 11-year longitudinal study using ordinal time series to examine the durability and dynamics of reputational status for firms within 33 industries. Results indicate that favorable reputational status is not significantly durable for most firms. Instead, reputational status loss from hi...
Published on Apr 1, 2005in Games and Economic Behavior1.00
John Duffy31
Estimated H-index: 31
(University of Pittsburgh),
Ed Hopkins18
Estimated H-index: 18
(Edin.: University of Edinburgh)
Previous data from experiments on market entry games, N-player games where each player faces a choice between entering a market and staying out, appear inconsistent with either mixed or pure Nash equilibria. Here we show that, in this class of game, learning theory predicts sorting, that is, in the long run, agents play a pure strategy equilibrium with some agents permanently in the market, and some permanently out. We conduct experiments with a larger number of repetitions than in previous work...
Published on Mar 1, 2005in International Journal of Conflict Management1.20
Steven L. Grover19
Estimated H-index: 19
(University of Otago),
Chun Hui30
Estimated H-index: 30
This study investigates how two situational elements influence people's propensity to lie about their own performance. We hypothesized that, a) people are more likely to lie when rewarded for doing so, b) performance pressures at work lead people to lie about their performance, and c) the joint effect of the two elements led to the highest level of lying. Reward and pressure were manipulated in an experiment with 140 participants. The findings support both hypotheses. The results have implicatio...
Published on Jan 1, 2005in Journal of Business Ethics3.80
T. K. Das35
Estimated H-index: 35
(CUNY: City University of New York)
How do senior business executives rank their preferences for various ethical principles? And how strongly do the executives believe in these principles? Also, how do these preference rankings relate to the way the executives see the future (wherein business decisions play out)? Research on these questions may provide us with an appreciation of the complexities of ethical behavior in management beyond the traditional issues concerning ethical decision-making in business. Based on a survey of 585 ...
Published on Dec 1, 2004in Journal of Management9.06
David J. Ketchen54
Estimated H-index: 54
(FSU: Florida State University),
Charles C. Snow8
Estimated H-index: 8
(College of Business Administration),
Vera L. Hoover4
Estimated H-index: 4
(FSU: Florida State University)
Understanding the nature and consequences of the competitive dynamics among firms is a key objective of the strategic management field. We review recent developments in six research streams relevant to competitive dynamics: competitive action and response, first-mover advantage, co-opetition, multipoint competition, strategic groups, and regional clusters. As a first step toward filling gaps in knowledge identified in our review, we provide suggestions for future inquiry within each research str...
Published on Jun 1, 2004in Academy of Management Journal7.19
Maurice E. Schweitzer32
Estimated H-index: 32
(UPenn: University of Pennsylvania),
Lisa D. Ordóñez18
Estimated H-index: 18
(UA: University of Arizona),
Bambi M. Douma3
Estimated H-index: 3
(UM: University of Montana)
We explored the role of goal setting in motivating unethical behavior in a laboratory experiment. We found that people with unmet goals were more likely to engage in unethical behavior than people attempting to do their best. This relationship held for goals both with and without economic incentives. We also found that the relationship between goal setting and unethical behavior was particularly strong when people fell just short of reaching their goals. A substantial literature has documented t...
Published on Mar 22, 2004in Journal of Business Strategies
James A. Sundali9
Estimated H-index: 9
,
Darryl A. Seale17
Estimated H-index: 17
Abstract Signaling occurs when a firm attempts to indicate, truthfully or not, its intended course of action. Competitors often use signaling in market entry situations to coordinate actions, or possibly to deter entry by other firms. This paper examines the value of cheap talk and costly signaling in a large group market entry game. Eighty subjects, twenty in each of four groups, participated in a computer-controlled decision making experiment. After learning the capacity of the market, subject...
Published on Jul 1, 2003in Journal of Business Ethics3.80
Fritz Allhoff16
Estimated H-index: 16
(UCSB: University of California, Santa Barbara)
Imagine that I walk into a car dealership and tell the salesperson that I absolutely cannot pay more than 10,000 for the car that I want. And imagine further she tells me that she absolutely cannot sell the car for less than 2,000. Assuming that neither one of us is telling the truth, we are bluffing about our reservation prices, the price above or below which we will no longer be willing to make the transaction. This is certainly a common practice and, moreover, is most likely minimally prud...
Cited By14
Newest
Published on Apr 3, 2019in Sport, Ethics and Philosophy
Joseph McManus1
Estimated H-index: 1
(Monmouth University)
AbstractThe paper defines the practice of tanking in regard to sport organizations and differentiates this approach from activities such as match fixing and team building. Thereafter, the ethical implications tanking presents are developed using Alasdair MacIntyre’s neo-Aristotilean ethical framework. In particular, MacIntyre’s concept of a practice that supports both internal and external goods is discussed to examine the moral questions tanking presents. The insights developed within this anal...
Published on Sep 1, 2018in Asian Nursing Research1.26
Yali Li , Taiwen Feng3
Estimated H-index: 3
(HIT: Harbin Institute of Technology),
Wenbo Jiang3
Estimated H-index: 3
(NPU: Northwestern Polytechnical University)
Abstract Purpose This study aims to investigate how competitive orientation influences unethical decision-making (UDM) through relationship conflict and the moderating effect of hostile attribution bias. Methods This study was conducted using a self-report questionnaire. Data were collected from 727 employees in Chinese hospitals. For each variable, measures were adopted or adapted from existing literature. Data were analyzed using descriptive statistics, correlation analysis, confirmatory facto...
Published on Apr 1, 2018in Journal of Supply Chain Management7.13
Lutz Kaufmann23
Estimated H-index: 23
(WHU - Otto Beisheim School of Management),
Joerg Rottenburger1
Estimated H-index: 1
(WHU - Otto Beisheim School of Management)
+ 1 AuthorsChristian Schlereth9
Estimated H-index: 9
(WHU - Otto Beisheim School of Management)
Business negotiations constitute a key element of supply chain interactions that can create additional value for both the buyer and supplier. However, negotiations can also render the parties vulnerable to deception. While a large body of knowledge on buyer–supplier relationships exists, research on deception and bounded ethicality in supply chain relationships is still nascent. We advance this new research stream in behavioral supply chain management by first conceptualizing two types of dece...
Published on Feb 15, 2017
David Stanley14
Estimated H-index: 14
Published on Sep 1, 2016in Group Decision and Negotiation2.01
Denise Fleck8
Estimated H-index: 8
(UFRJ: Federal University of Rio de Janeiro),
Roger J. Volkema13
Estimated H-index: 13
(PUC-Rio: Pontifical Catholic University of Rio de Janeiro),
Sergio Pereira2
Estimated H-index: 2
(PUC-Rio: Pontifical Catholic University of Rio de Janeiro)
Abstract As negotiation is critical to all forms of organizational decision-making, researchers have shown an interest in understanding how the flow of information (valid and otherwise) influences this process. Often, competitive, questionable, and unethical tactics have been treated as interchangeable in these studies, despite presumed differences in appropriateness. The purpose of this study was to examine the similarities and differences in negotiators’ use and efficacy of appropriate competi...
Published on Jun 1, 2015in Journal of Business Ethics3.80
Kevin Lehnert9
Estimated H-index: 9
(GV: Grand Valley State University),
Yung-Hwal Park3
Estimated H-index: 3
(TSU: Truman State University),
Nitish Singh24
Estimated H-index: 24
(SLU: Saint Louis University)
In business ethics, there is a large body of literature focusing on the conditions, factors, and influences in the ethical decision-making processes. This work builds upon the past critical reviews by updating and extending the literature review found in Craft’s (J Bus Ethics 117(2):221–259, 2013) study, extending her literature review to include a total of 141 articles. Since past reviews have focused on categorizing results based upon various independent variables, we instead synthesize and lo...
Published on May 1, 2015in Rationality and Society0.53
Stephen Benard10
Estimated H-index: 10
(IU: Indiana University)
Why do individuals engage in surprisingly costly aggression? Theory and research suggest that individuals aggress in order to establish a reputation as a strong competitor and thereby deter aggression from others. However, we know little about whether these reputational concerns lead individuals to initiate aggression or instead to reciprocate when challenged. Correspondingly, it is unclear whether initiating or reciprocating aggression provides greater reputational benefits. This study uses a b...
Published on Jan 1, 2015
Chung-wen Chen3
Estimated H-index: 3
,
John B. Cullen1
Estimated H-index: 1
We employed Robert Merton’s anomie theory to examine supervisors’ ethics. We examined whether supervisors with a lower self-perceived social class are more likely to justify ethically suspect behaviors than are those with a higher self-perceived social class and whether cultural values influence this individual-level association. The results did not show that supervisors’ self-perceived social class is able to predict their ethics. However, supervisors’ self perception of social class could expl...
Ronald E. Dulek9
Estimated H-index: 9
(UA: University of Alabama),
Kim Sydow Campbell11
Estimated H-index: 11
(UA: University of Alabama)
Although clarity holds a privileged place within the field of business/management/corporate communication, adopting a strategic perspective suggests that ambiguity, and even deception, may be appropriate choices, depending on strategic intent. This article builds a framework for analyzing the dark side of strategic communication from both a strategic perspective and a linguistic perspective and then applies it to four business scenarios involving corporate finance; three involve public pronounce...