Myopic prediction, self-destructive secrecy, and the unexpected benefits of revealing final deadlines in negotiation

Abstract

Three studies explored the psychology of social prediction by examining negotiators’ predictions of the effects of time pressure and comparing those predictions with actual outcomes. The results show that revealing final deadlines in negotiation can lead to better outcomes for the negotiator with the deadline because revelation speeds concessions by the other side. However, both naı̈ve and experienced negotiators consistently predicted the opposite. As a result, when given the choice of revealing their final deadlines to their negotiating opponents, negotiators chose not to. The reasons for these erroneous expectations can be explained by myopic processes of prediction in which people anticipate the effects of constraints like deadlines more on their own behavior than on the behavior of others.