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  • June 2020
  • Article
  • Psychological Science

In Generous Offers I Trust: The Effect of First-offer Value on Economically Vulnerable Behaviors

By: M. Jeong, J. Minson and F. Gino
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Abstract

Negotiation scholarship espouses the importance of opening a bargaining situation with an aggressive offer, given the power of first offers to shape concessionary behavior and outcomes. In our research, we identify a surprising consequence to this common prescription. Through four studies in the field and laboratory, we explore how first-offer values affect the counterpart’s perceptions of the offer-maker’s trustworthiness and, subsequently, the counterpart’s behaviors toward the offer-maker. Specifically, we find that recipients of generous offers are more likely to make themselves economically vulnerable to their counterparts, exhibiting behaviors with potentially deleterious consequences, such as disclosing negative information. We observe this effect in an online marketplace (Study 1) and an incentivized laboratory experiment (Study 3). We demonstrate that this effect is driven by the greater trust that generous first offers engender (Studies 2–3). These results persist in the face of direct debiasing attempts and are surprising to lay negotiators (Studies 3–4).

Keywords

Attribution; Interpersonal Interaction; Judgment; Social Interaction; Inference; Open Data; Open Materials; Preregistered; Negotiation Offer; Strategy; Behavior; Interpersonal Communication; Trust; Outcome or Result

Citation

Jeong, M., J. Minson, and F. Gino. "In Generous Offers I Trust: The Effect of First-offer Value on Economically Vulnerable Behaviors." Psychological Science 31, no. 6 (June 2020): 644–653.
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About The Author

Francesca Gino

Negotiation, Organizations & Markets
→More Publications

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More from the Authors
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