Being honest while making a deal pays off, but maybe not in money…

This is an interesting study. Lying to another person to get the better of them in a financial negotiation might win you more money, but you are likely to end up feeling guilty and less satisfied with the deal than if you had been honest. So… a tough choice!

From the press release:

Study author Alex Van Zant, PhD, of Rutgers University, and his colleagues wanted to see whether lying — and getting away with it — made liars more or less happy with the outcome of a negotiation.

“Although many people assume that deception elicits feelings of guilt, prior research found that getting away with unethical behavior leaves people feeling more satisfied with themselves,” Van Zant said. “But that research had primarily focused on private unethical behavior, like cheating on exams or taxes. It was unclear whether those findings might extend to telling a lie to someone whom the lie hurts directly, like a negotiation counterpart.”

The study was published in the Journal of Personality and Social Psychology.

To figure out whether people who lie to others end up feeling “deceiver’s guilt” or a “deceiver’s thrill,” the researchers recruited 982 online participants and grouped them into 491 pairs of sellers and buyers. Each had to negotiate the sale of a used laptop worth somewhere under $5000. In a dishonesty condition, the sellers were given the opportunity to dissemble — they were told that the laptop had a broken graphics card but that the buyer didn’t know that and wouldn’t find out. In a control condition, the buyers knew about the broken graphics card and the sellers knew that they knew.

Sellers and buyers were both offered an incentive to get the best deal they could. The sellers could get a small cash payment for every $250 above $3,750 that they managed to win in the negotiation over the sale price. The buyers, meanwhile, were offered a cash payment for every $250 under $3,750 that they paid for the laptop.

After the negotiations were complete and the buyers and sellers had agreed on a price, the sellers answered questions about how they felt about the deal (e.g., “I am satisfied with my outcome in this negotiation” and “This negotiation made me feel more competent as a negotiator,”) whether they felt guilty, and their general level of positive or negative affect at that moment.

Overall, 74% of sellers who had the opportunity to lie to their partners chose to do so. Supporting the deceivers’ guilt hypothesis, those who chose to lie felt less satisfied with the negotiation, felt more guilt and felt less satisfied in general than sellers in the control condition who did not have the chance to lie. Further, sellers who could have lied but chose to be honest were more satisfied than sellers in the control condition.

The researchers were also interested in whether having a greater or lesser incentive to lie would affect how sellers felt about the outcome. So, for half the pairs, the cash incentive was $1.25 for every $250 above $3750, while for the other half, the incentive was only 10 cents per $250. The researchers found that sellers who lied for a bigger incentive felt even guiltier than those who lied for a smaller reward.

In a follow up experiment, the researchers found that sellers who lied to their buyers were less likely to choose to negotiate with that partner again, instead opting for a new partner when offered the choice.

The researchers found these effects held true regardless of people’s personal sense of morality and ethical standards. People who described themselves as highly empathic and said that being just, compassionate and fair was extremely important to them, and those who rated those characteristics as less important to them, were equally likely to feel guilty and dissatisfied after lying.

“Scholars have long known the risks of detected dishonesty,” Van Zant said. “Our investigation breaks new ground by showing how even undetected dishonesty harms negotiators. It leads negotiators to feel guilty, undermines their satisfaction, and reduces their interest in continuing a relationship with counterparts. Considering dishonesty’s psychological and relational costs, living with the costs of dishonesty might be psychologically more challenging than forgoing its benefits.”

Future research could look at whether these results would hold for different types of lies, according to Van Zant.

“Our studies focused on lies that involve either misrepresenting or concealing information for personal gain. But sometimes people might lie about their emotions, for example strategically exaggerating anger to intimidate a negotiation counterpart,” he said. “Other times, they might even tell prosocial lies to benefit a counterpart. Some lies are likely to be easier for negotiators to rationalize than others. Perhaps these lies would not elicit nearly as much guilt as the lies we examined in our studies.”

Abstract of the study:
Lies often go undetected, and we know little about the psychological and relational consequences of successfully deceiving others. While the evidence to date indicates that undetected dishonesty induces positive affect in independent decision contexts, we propose that it may elicit guilt and undermine satisfaction in negotiations despite facilitating better deals for deceivers. Across four studies, we find support for a deceiver’s guilt account, whereby dishonesty triggers guilt and lessens negotiators’ satisfaction with the bargaining experience. This pattern is robust to several factors, including the size of negotiators’ incentives and individual differences in negotiators’ moral character. It holds for both lies issued of negotiators’ own volition and in compliance with others’ orders. Large incentives also exacerbated dishonesty-induced guilt. Further, dissatisfaction stemming from dishonesty-induced guilt had downstream relational consequences. Despite going undetected, dishonesty in a focal negotiation reduced deceivers’ likelihood of choosing to interact again with the same counterpart and adversely impacted their satisfaction in future negotiations with that counterpart.

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