Negotiation Huffing and Bluffing

Have you ever bluffed in a negotiation?

Some people never would. Others see it as just another negotiating tactic.

I was asked recently whether it's ever right to bluff in a negotiation. The question was brought into sharp focus following a widely reported case in which a homeowner was gazundered - offered £15,000 less for their property the day before contracts were due to be exchanged.

Was it unethical? Perhaps. Was it good negotiation? That depends on what happened next.

The presence, recognition and potential use of incentives and sanctions are all legitimate parts of negotiation. The real question is whether those threats are genuine—or simply a bluff.

Huffing and Bluffing

Negotiators often display one of two behaviours: huffing or bluffing.

Huffing is negotiation theatre. It might involve exaggerated frustration ("Yes, yes, yes – but what do you really want?"), emotional displays ("How much!"), dramatic walk-outs or statements designed to create pressure without fundamentally changing the negotiation.

Bluffing goes a step further. It may involve exaggerated alternatives, false deadlines, empty threats or positions that the other side hopes you'll simply accept without challenge.

Both are designed to influence your behaviour. The important question isn't whether they're genuine, but whether you believe they are. Neither approach is without risk.

The Cost of Being Found Out

In a long-term commercial relationship, bluffing can be incredibly dangerous. If your bluff is called, the immediate deal may suffer, but so too may your credibility. Future negotiations become harder because the other side starts questioning whether your statements, threats or commitments can be trusted.

That's why, if you choose to use a threat or sanction, you should be prepared to carry it through. Credibility is difficult to build and remarkably easy to lose.

One-Off Negotiations Are Different

Some people reach a different conclusion when the relationship is unlikely to continue. Buying a house, selling a car or completing another one-off transaction can change the calculation. They may decide that a small amount of reputational damage is a price worth paying if the potential financial gain is significant.

That appears to have been the thinking in the gazundering case.

The seller, however, made a different calculation. Rather than accepting a £15,000 reduction, they immediately put the property back on the market because they concluded that the costs of remarketing the property were lower than accepting the reduced offer. The following day, the buyers returned and agreed to honour the original price.

Neither party's bargaining power had changed. What had changed was their calculation of what was in their own interest.

The Better Question

People often ask:

"Is bluffing ever acceptable?"

I think there's a more useful question.

Why does the other side believe bluffing is in their interest?

Understanding the answer tells you far more than simply deciding whether they're telling the truth. It helps explain why people bluff, why they make threats, why they delay decisions and, ultimately, why negotiations start, stop and restart.

Negotiation behaviour is rarely driven by power alone. It is driven by what people believe is in their own interest at that moment.

The best negotiators don't simply ask whether the other side is bluffing. They ask why bluffing appears to be in the other side's interest.

If you'd like to explore this idea further, read our Practical Guide, Why Interest Matters More Than Power in a Negotiation, which explains why organisations choose to negotiate - or refuse to negotiate - and how understanding that commercial calculation can fundamentally change the way you negotiate.