“I’m sorry. That’s too Low” or “Are you Fxxx serious?”: How Reactions to First Offers Shape Economic and Relational Outcomes

Abstract: Negotiations are an essential feature of both personal and professional interactions. While the core aspect of negotiations is the exchange of offers, we know surprisingly little about how these exchanges unfold. This research examines the impact of politeness and counteroffers in reaction to first offers. Across three studies, participants evaluated various responses in simulated negotiation scenarios. Treatment conditions varied the degree of politeness in the simulated responses, as well as whether or not a counteroffer was made, and how much this counteroffer was for. We find that polite responses enhance relational satisfaction and economic outcomes, while aggressive responses harm relationships and reduce favorable outcomes. Concrete counteroffers improve relational outcomes but may result in reduced economic gains if concessions are too steep. These findings underscore the importance of balancing assertiveness with relational considerations in negotiation strategies. They also expand on existing literature by emphasizing the importance of anchors in the exchange of offers.

Keywords: