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

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...

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Bibliographic Details
Published in:Journal of business ethics 2009-07, Vol.87 (4), p.535-553
Main Authors: Guidice, Rebecca M., Alder, G. Stoney, Phelan, Steven E.
Format: Article
Language:English
Subjects:
Behavior
bluffing
Business and Management
Business Ethics
Business structures
Competition
Competitive advantage
competitive behavior
Competitiveness
Corporate strategies
Decision making
Education
Ethical behavior
Ethics
Games
Hypotheses
Lying
Management
Market entry
Marketing
Men
Morality
Philosophy
Quality of Life Research
Rivalry
Statistical analysis
strategic decision making
Strategic planning
Theory
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Summary: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.
ISSN:0167-4544
1573-0697
DOI:10.1007/s10551-008-9957-z