Biases and Ethical Problems in Negotiations

Cite this article as:"Biases and Ethical Problems in Negotiations," in The Business Professor, updated October 22, 2017, last accessed July 4, 2020,

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What human biases give rise to ethical problems in negotiation?

Numerous cognitive biases stand in the way of individuals determining or choose what is an ethical course of conduct.

    • Bounded EthicalityRefers to the limits of people to make ethical decisions because they are either unaware or fail to fully and deliberately process information.
    • Illusion of superiorityPeople view themselves and their actions much more favorably than others view them. People focus on their positive characteristics and downplay their shortcomings. In relative terms, people believe they are most honest, ethical, capable, intelligent, courteous, insightful, and fair than others.
    • Illusion of Controlpeople believe they have more control over events than they really do; often feel they can control outcomes; can lead to a type of gambler’s fallacy in decision making, however, it can also give rise to ethical problems, such as when people make claims of quality control that cannot be met.
    • Overconfidencemost overconfident about their knowledge; people claim to be 75% certain, when they are actually correct only 60% of the time; people who have unmet goals are more likely to engage in unethical behavior.

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