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Study: In Negotiations, Niceness Can Carry Extra Costs

By:
Chris Gaetano
Published Date:
Sep 6, 2019
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A study outlined in the Harvard Business Review found that, when it comes to price negotiations, a firm tone got results more consistently than a nice one.

The researchers conducted a series of field experiments in which they would inquire about smartphones for sale on Craigslist. In each email, they would ask for a 20 percent discount, but in some they used a friendly tone while in others they were more firm. In total, the researchers emailed 775 sellers.

What they found was that, while a firm tone was more likely to draw an outright "no" than a nice one (24 versus 14 percent), when a seller did offer a discount, it was more likely to be the full 20 percent off asked for in response to a firm email (13 percent) than in response to a friendly one (9 percent). In addition, they found that emails with a nice tone were more likely to be ignored entirely than those with a firm tone (54 versus 45 percent).

Seeking to observe the effect directly, the researchers then did another experiment in which people took the role of either buyers or sellers and negotiated for the best price. They found that the buyers instructed to use a friendly tone paid about 15 percent more on average, often because the sellers were more likely to make an aggressive counteroffer, and were able to extract more concessions.

Overall, then, the researchers believe that, contrary to the old saying, sometimes you actually catch more flies with vinegar than honey. Yet the researchers noted that this should not be interpreted as a blank check to be nasty to people: They said they haven't tested the power of niceness on less zero-sum negotiations, nor do they know whether their results can be applied to iterative negotiations in which someone will be dealing with the same person on multiple occasions.

This calls to mind the prisoner's dillemma, where people weigh the risks and rewards of cooperating or betraying the other party. Simuations have found that the optimal strategy is different depending on whether or not the players anticipate ever seeing each other again. Essentially in a one-off interaction, it might be better to just betray the other party and gain the full benefit, but if you are going to be dealing with this same person over and over again, it's been found that the best strategy is "tit for tat," that is, cooperate unless the other person betrays you, in which case you betray them back before resetting back to a cooperative default.