Ethical Decision-Making in Phantom BATNA Situations

Keywords: phantom BATNA, ethics, regulatory focus, qualitative and quantitative

Abstract: We study the ethicality of decisions by negotiators in situations where they have to make a decision to accept or reject an offer in hand before hearing back about one or more other opportunities (i.e., a potential but uncertain best alternative to a negotiated agreement or “phantom BATNA”). It is unethical to frame a phantom BATNA as a certain BATNA, but doing so enhances negotiator power perceptions and generates better negotiation outcomes. The present two studies examine whether decisions to misrepresent phantom BATNA information are influenced by the negotiator’s likelihood of obtaining their alternative offer (Studies 1 & 2) and by the negotiator’s negotiation experience and gender (Study 2). Study 1 involves qualitative coding of negotiation messages from an archival dataset. Study 2 is an experimental study that includes a job offer negotiation simulation.