Bluffing is a dangerous negotiation tactic.
A pack of wolves can smell your fear. Yelling and shouting is better than running, but not as good as firing your rifle if only you had remembered to bring it!
Do not employ bluffing as a tactic unless you are prepared to have it called. Bluffing can be a strategic mistake if you can't back it up.
A bluff is a venture into the unknown. You are calculating the other side will back down or not take the challenge. If you are wrong, you will have to perform or be caught in a bluff. Once you are caught bluffing, the other side will tend to assume you are always bluffing. It is essentially being caught in a lie.
Strategically it is safest to bluff when you have nothing to lose. Sometimes last ditch bluffing pays off. Sometimes it doesn't. The odds, obviously, are in your favor of improving your position as compared to doing nothing and accepting defeat.
There are times when you know you have cornered the other person. If the person then proffers an obvious bluff, you may want to consider it.
It can be strategically prudent to grant a minor, ancillary concession to shore up the transaction rather than see the deal collapse and try to make the deal again.
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