The power and peril of first offers in negotiations: a conceptual, meta-analytic, and experimental synthesis

Abstract

Is it advantageous to make the first offer and to do so ambitiously? Although initial studies suggested clear advantages across cultures and contexts, recent findings have challenged the robustness of this first-mover advantage. A preregistered meta-analysis of 374 effects from 90 studies (Study 1; N = 16,334) revealed three beneficial effects of making the first offer: (a) a general first-mover advantage (g = 0.42, m = 80), (b) a positive correlation between first-offer magnitude and agreement value (r = 0.62, g = 1.56, m = 53), and (c) an advantage of ambitious (vs. moderate) first offers on agreement value (g = 1.14, m = 187). The meta-analysis also identified two detrimental outcomes of ambitious first offers: (d) fewer deals (i.e., more impasses; g = −0.42, m = 13) and (e) worse subjective value experienced by recipients (g = −0.40, m = 41). Two preregistered experiments (Study 2a-2b; N = 2,121) replicated both the beneficial and detrimental meta-analytic effects and simultaneously tested multiple psychological mechanisms driving these effects. Across the experiments, selective accessibility drove the effect of first-offer magnitude on counteroffers, while anger drove the effects on impasses and subjective value. Across both the meta-analysis and the experiments, negotiation complexity moderated both the beneficial and detrimental effects of first offers; as the number and type of issues (i.e., complexity) increased, the effects of first offers became smaller, and the mechanisms changed. Overall, the current meta-analysis and experiments collectively illuminate the direction, size, psychological pathways, and boundaries of first-offer effects in negotiations.