Having too many options can make you a worse negotiator

• Main Authors: SCHAERER, Michael, LOSCHELDER, David D., SWAAB, Roderick I.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2017
• Subjects: Negotiations; alternatives; options; outcomes; Organizational Behavior and Theory
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5240; https://ink.library.smu.edu.sg/context/lkcsb_research/article/6239/viewcontent/HavingTooManyOptionsMakeWorseNegotiator_2017_hbr.pdf
• Institution: Singapore Management University

The conventional wisdom about negotiating — whether for a job salary or the price of a house — is that you’re better positioned to get what you want when you have more offers to leverage. For example, the more job offers an MBA graduate has, the better positioned they are to get a good deal with a recruiter. If you’re considering multiple options, your counterpart may feel pressured to make a better offer to keep you at the negotiation table. As our research shows, however, having alternative offers does not always help you. In a series of experiments, we found that walking into a negotiation with multiple offers, rather than a single one, can bias your decisions and lead you to make a lower first offer, hurting your ability to negotiate for the outcome you want. We conducted five studies, involving 1,527 MBA students, undergraduates, and online participants, all with different levels of negotiating experience, in a variety of negotiation settings. Our paper was recently published in Organizational Behavior and Human Decision Processes.