Bounded Ethicality and Ethical Fading in Negotiations: Understanding Unintended Unethical Behavior

The business scandals in the past several decades led to the rising importance of ethics as a topic central to management scholarship. Behavioral scientists in particular were attracted to the topic in far greater numbers, and the study of ethical decision-making emerged as a core subfield (Messick & Tenbrunsel, 1996). This paper draws on that framework and applies it to negotiations, arguing that not all unethical behavior is intentional; rather, negotiators fall prey to bounded ethicality, engaging in behavior that is contradictory to their values without realizing they are doing so. We further argue that ethical fading—when individuals do not “see” the ethical implications of the situation or their action—is central to explaining why this occurs. Relying on past empirical research, we identify negotiation “cues” that have been linked to unethical behavior and explore how they make a negotiator particularly vulnerable to ethical fading, resulting in subsequent unethical behavior. We discuss several opportunities for future research in the negotiation discipline and other disciplines that draw on motivated social exchange or assume intentionality and conclude with a call for scholars to define normative standards as they pertain to negotiator ethics.