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Too Much Information: The Perils of Nondiagnostic Information in Negotiations


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Two studies showed that possessing information about a negotiation counterpart that is irrelevant to the negotiation task can impair negotiators' effectiveness because such knowledge impedes effective information exchange. In Study 1, negotiators who possessed diagnostic and nondiagnostic forms of information were each less likely to exchange information about their preferences within the negotiation. However, only those negotiators who possessed nondiagnostic information achieved inferior negotiation outcomes as a result. In Study 2, negotiators possessing nondiagnostic information about their counterparts in electronically mediated negotiations were more likely to terminate the search for mutually beneficial outcomes prematurely and declare impasses. They were also less able to use diagnostic forms of information to make mutually beneficial trade-offs. As a result, negotiators in these dyads achieved inferior outcomes.
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Too Much Information:
The Perils of Nondiagnostic Information in Negotiations
Scott S. Wiltermuth
University of Southern California
Margaret A. Neale
Stanford University
Two studies showed that possessing information about a negotiation counterpart that is irrelevant to the
negotiation task can impair negotiators’ effectiveness because such knowledge impedes effective information
exchange. In Study 1, negotiators who possessed diagnostic and nondiagnostic forms of information were each
less likely to exchange information about their preferences within the negotiation. However, only those
negotiators who possessed nondiagnostic information achieved inferior negotiation outcomes as a result. In
Study 2, negotiators possessing nondiagnostic information about their counterparts in electronically mediated
negotiations were more likely to terminate the search for mutually beneficial outcomes prematurely and
declare impasses. They were also less able to use diagnostic forms of information to make mutually beneficial
trade-offs. As a result, negotiators in these dyads achieved inferior outcomes.
Keywords: negotiations, nondiagnostic information, dilution-effect, negotiator, decision making
Negotiators often seek out information about their counterparts
to give themselves an edge, as the ability to understand the
preferences, strategies, goals, and interests of negotiation counter-
parts represents one of the core cognitive competencies necessary
for success in negotiations (Carroll, Bazerman, & Maury, 1988).
Negotiators who understand their counterparts may be better able
to predict counterparts’ behaviors (Bazerman & Carroll, 1987; Lax
& Sebenius, 1992). They may also be more open and forthright
with their counterparts (Drolet & Morris, 2000; Moore, Kurtzberg,
Thompson, & Morris, 1999; Morris, Nadler, Kurtzberg, & Thomp-
son, 2002) and therefore better able to identify the opportunities
available for value creation (Brodt, 1994; Thompson & Hastie,
However, not all information about counterparts is equally use-
ful within negotiations. For example, information about a coun-
terpart’s comfort with change may have little value in predicting
counterparts’ negotiating behavior. Although such pseudorelevant
information (Hilton & Fein, 1989) may not be useful in a negota-
tion context, it may nonetheless appear useful to negotiators and
therefore affect their behavior.
We examine whether possessing nondiagnostic information
(NDI) can impair negotiation performance by reducing negotia-
tors’ willingness to engage in the information exchange necessary
to create and claim value. In doing so, we look to set boundaries
on the assumption that information is helpful (or at least not
harmful) within negotiations (e.g., Lewicki, Saunders, & Minton,
1997). We also provide a counterpoint to previous findings show-
ing that possessing information about a counterpart can bolster
negotiation effectiveness through the mechanisms of improved
rapport and trust (Drolet & Morris, 2000; Moore et al., 1999). We
also seek to extend our understanding of the dilution effect (Nis-
bett, Zukier, & Lemley, 1981) by showing that NDI can lead
people to truncate information exchange in competitive social
interactions. Finally, we examine how power may affect the im-
pact of NDI.
Prior research indicates that decision makers often fail to dif-
ferentiate diagnostic information (DI), which is predictive of out-
comes or behavior in a given domain, from NDI, which is not
predictive of outcomes or behavior in that domain (e.g., Peters &
Rothbart, 2000; Zukier, 1982). NDI often reduces the degree to
which decision makers use DI (Nisbett et al., 1981) and can impair
the quality of their decisions in consumer purchases (Meyvis &
Janiszewski, 2002), auditing judgments (Glover, 1997; Hacken-
brack, 1992; Hoffman & Patton, 1997; Waller & Zimbelman,
2003), hiring decisions (Highhouse, 1997), and jury decision mak-
ing (Fein, McCloskey, & Tomlinson, 1997). NDI has also been
shown to create overconfidence in a host of tasks ranging from the
prediction of basketball games (e.g., Tsai, Klayman, & Hastie,
2008) to performance in economic games in which no social
interaction takes place (e.g., De Dreu, Yzerbyt, & Leyens, 1995).
Although NDI has not been shown to affect behavior in social
tasks, cognitive negotiation theory (Neale & Bazerman, 1991)
would suggest that NDI may also influence how people share
information in competitive interactions. Consistent with this the-
Scott S. Wiltermuth, Department of Management and Organizations,
University of Southern California; Margaret A. Neale, Department of
Organizational Behavior, Stanford Graduate School of Business.
We thank Jing Zhou and Jared Curhan for their thoughtful comments on
earlier versions of this manuscript.
Correspondence concerning this article should be addressed to Scott S.
Wiltermuth, Department of Management and Organizations, University of
Southern California, 3670 Trousdale Boulevard, Los Angeles, CA 90089.
Journal of Applied Psychology © 2011 American Psychological Association
2011, Vol. 96, No. 1, 192–201 0021-9010/11/$12.00 DOI: 10.1037/a0021871
ory, negotiators who assess that they have the necessary informa-
tion to achieve their goals may be less motivated to seek task-
relevant information from their counterpart (Bazerman & Carroll,
1987; Einhorn & Hogarth, 1978; Neale & Bazerman, 1985) and
more hesitant to reveal information about their own preferences if
they believe the information that they possess has competitive
utility (Gerarda Brown & Ayres, 1994; Lax & Sebenius, 1992).
Negotiators who possess DI would also curtail information ex-
change for these same reasons, but they would have a genuine
informational advantage to protect. We offer the following:
Hypothesis 1: Negotiators who possess NDI or DI about their
counterparts will exchange less information relevant to the
negotiation than will those without such NDI.
Negotiators who possess information about their counterparts
may also be less likely to attend to the DI that is exchanged
(Nisbett et al., 1981). If negotiators possessing NDI do exchange
less DI or pay less attention to the DI that is exchanged, they
should be less likely to discover the mutually beneficial trades that
create value and less likely to identify opportunities to claim value
(Neale & Bazerman, 1985, 1991; Pruitt, 1981). With this logic in
mind, we assert the following:
Hypothesis 2a: Negotiators possessing NDI accrue less value
in their negotiations than do those without such information.
Hypothesis 2b: Dyads in which a negotiator possesses NDI
create less value than do dyads in which neither negotiator
possesses NDI.
All negotiators may not be equally susceptible to the effects of
NDI. Negotiators who are in powerful states of mind (Galinsky,
Gruenfeld, & Magee, 2003) are more susceptible to overconfi-
dence (Anderson & Galinsky, 2006), ask fewer diagnostic ques-
tions about their counterparts’ interests and positions (Van Kleef,
De Dreu, & Manstead, 2004), and are less motivated to maintain
accurate perceptions of others (Fiske, 1993; Fiske & De´pret, 1996;
Galinsky et al., 2003). Indeed, high-power negotiators are partic-
ularly likely to rely on incomplete knowledge and unfounded
presumptions about their negotiating partners (De Dreu & Van
Kleef, 2004; Galinsky et al., 2003). We therefore hypothesize the
Hypothesis 3: Possessing NDI reduces individual negotiator
outcomes more severely when possessed by negotiators en-
tering negotiations in powerful mindsets than if possessed by
negotiators entering the negotiation in powerless mindsets.
In addition to testing whether NDI impairs negotiation perfor-
mance by instilling feelings of advantage and abbreviating infor-
mation exchange, we also tested whether NDI about the counter-
part impaired performance by increasing negotiators’ liking of, or
feelings of similarity with, their counterparts. If so, possessing
NDI may lead negotiators to negotiate less aggressively and there-
fore achieve inferior outcomes. We conducted a pretest and two
experiments to test our ideas. The pretest establishes that both DI
and NDI can lead negotiators to feel they possess an advantage in
negotiations. In Experiment 1, we examined how possessing both
DI and NDI affect negotiation outcomes in a face-to-face negoti-
ation exercise. In Experiment 2, we tested whether NDI can have
pernicious effects in electronically mediated negotiations. We ex-
amined which behaviors accounted for the relationship between
NDI and impaired negotiation performance, as we wanted both to
understand the psychology involved and to provide clear prescrip-
tions for negotiators wishing to avoid the perils of NDI. In focus-
ing on behavioral mediators, we follow the lead of numerous
negotiation researchers (e.g., Kopelman, Rosette, & Thompson,
2006; Sinaceur, 2010).
The Pretest
We administered a pretest to determine whether DI and NDI
could lead negotiators to feel they have an advantage. Sixty stu-
dents at a West Coast university (47% female; M
!21) received
$8 to participate in a negotiation study. They began the study by
completing the Keirsey Temperament Sorter (Keirsey, 1978) and
subsequently conversing with their counterpart for 5 min. Partic-
ipants then read the instructions for a multiissue negotiation. In one
third of the cases, they also received DI, which stated the impor-
tance the counterpart placed on various issues. In one third of the
cases, they received NDI, which was “Barnum Effect” information
ostensibly based on their counterparts’ responses to the Keirsey
Temperament Sorter. In one third of the cases, they received no
information. Both the NDI and DI are listed in the Appendix.
Participants receiving information were told,
In this study, one participant is randomly chosen to receive person-
specific information about the other participant. You have been cho-
sen to receive this information. Please read this information, but
please do not refer to this information in any way during the negoti-
ation. The other party will not receive this information, nor will s/he
receive person-specific information about you. Again, please do not
refer to this information during the negotiation.
Participants were then given a distracting task lasting 5 min.
Participants used a 7-point Likert scale ranging from 1 (not at all)
to 7 (very much) to answer: “How much do you think you have an
informational advantage relative to your counterpart?”; “How sure
are you that you will be able to control the negotiation in your
favor?”; “How favorable do you think the final agreement will be
to you?”; “How confident are you that you have information about
your counterpart that can help you predict how he/she will be-
have?”; “Based on what you know about your counterpart, how
much of an advantage do you think you have in this negotiation?”
They concluded the experiment by indicating feelings of similar-
ity, liking, and trust toward the counterpart.
We combined participants’ responses to the questions address-
ing feelings of advantage into a single index ("!.78). Feelings of
advantage were uncorrelated with counterparts’ feelings of advan-
tage (r!.00, p#.95), so we analyzed the data at the individual
level. We then conducted one-way analyses of variance
(ANOVAs) examining the effect of information (no information
vs. NDI vs. DI) on feelings of advantage, trust, similarity, and
liking. The overall Fstatistic for feelings of advantage was sig-
nificant, F(2, 57) !3.34, p!.04. As predicted, negotiators
receiving NDI felt as though they possessed an advantage (M!
4.76, SD !1.13) relative to negotiators in the control condition
(M!4.03, SD !1.16), t(57) !2.20, p!.03, d!0.63. The same
was true for negotiators possessing DI (M!4.79, SD !0.81),
t(57) !2.28, p!.03, d!0.76. We also tested whether NDI could
affect negotiators’ concern for their counterparts either positively
or negatively; however, measures of trust, liking, and similarity
were not affected by condition (all ps#.15).
Experiment 1
In Experiment 1, we explored whether negotiators with NDI and
DI exchanged less information with their counterparts. We also
explored whether the reduced information exchange impaired ne-
gotiation outcomes for negotiators possessing NDI.
Participants and experimental design. A total of 154 stu-
dents (54% female; M
!21) participated in the negotiation
exercise for $12. Negotiator role instructions were crossed with
power (high power vs. low power). There were three types of
dyads: dyads in which one negotiator possessed NDI about the
counterpart; dyads in which one negotiator possessed DI about the
counterpart’s interests; and dyads in which neither negotiator
possessed the NDI or DI. The amount of information possessed by
the high-power or the low-power negotiator was varied.
Procedure. After completing the Keirsey Temperament
Sorter, participants were asked to recall a time in their life when
they felt either powerful or powerless. They wrote about that time
in concrete detail for 10 min. This power manipulation has been
shown to produce effects similar to those created by structural or
role-based manipulations of power (e.g., Magee, Galinsky, &
Gruenfeld, 2007). Either NDI or DI was distributed to some
participants. Subsequently, participants completed the negotiation
exercise and filled out a postnegotiation questionnaire.
The negotiation task. Participants participated in a two-party,
six-issue negotiation exercise that was adapted from the “New
Recruit Exercise” (Pinkley, Neale, & Bennett, 1994) to reduce
power differentials between roles. In this exercise, both negotiators
played the role of company representatives who were tasked with
merging their respective companies. The negotiators were given a
description of the negotiation, a pay-off matrix, and a message
stating the number of points they would attain should they fail to
reach an agreement. Four of the issues were integrative, one was
distributive, and one was congruent.
Information manipulation. Participants were randomly as-
signed to receive the DI, the NDI, or no information. The forms of
DI and NDI were those used in the pretest and are listed in the
Dependent variables. Individual and joint points were the
primary dependent variables. Participants also indicated how much
each negotiator in a dyad revealed information about his or her
preferences for different outcomes and how much they trusted,
liked, and felt similar to their counterparts. They also ranked all
issues in order of decreasing importance from the perspective of
the counterpart and from their own perspective.
Treatment of data. All dyads reached agreements. Members
of six dyads expressed suspicion about the NDI manipulation, and
we excluded them from the analysis. We excluded two dyads for
their failure to follow the negotiation instructions. Excluding these
eight dyads did not significantly affect results. Because neither
negotiator role nor the interaction terms of Negotiator Role $NDI
(p!.51) nor the interaction term of Negotiator Role $DI ( p!
.48) had a significant effect on negotiator points, we combined
roles in all analyses. We analyzed individual-level data using
hierarchical linear modeling (Raudenbush & Bryk, 2002).
Manipulation check. Two coders (interrater "!.77), blind
to condition, coded on a 7-point Likert scale ranging from 1 (none
at all)to7(very much) how much power participants expressed in
their essays. Participants possessed more power in the high-power
than in the low-power essays (M!3.61, SD !1.64 vs. M!1.34,
SD !0.67), t(36) !6.77, p%.001, d!1.81.
Individual-level outcomes. Table 1 displays correlations be-
tween all variables. Consistent with Hypothesis 1, negotiators were
rated by their counterparts as revealing significantly less informa-
tion about their preferences when they (M!4.50, SD !1.59) or
their counterparts possessed NDI (M!4.49, SD !1.44) than
were negotiators in the control condition (M!5.37, SD !1.03).
Negotiators possessing DI (M!4.67, SD !1.58) and those facing
counterparts possessing DI (M!4.67, SD !1.35) shared less
information than did those in the control condition. Results may be
seen in Model 1 of Table 2. Condition did not affect self-ratings of
information revelation.
Model 2 of Table 2 displays further support for Hypothesis 1.
Negotiators possessing NDI and their counterparts were each less
accurate than negotiators in the control condition in identifying
their respective counterparts’ two least important issues at the
negotiation’s end. Those with NDI correctly identified the coun-
terpart’s two least important issues 14% of the time, whereas those
who had neither NDI nor DI correctly identified the counterpart’s
two least important issues 26% of the time. Neither NDI nor DI
affected negotiators’ ability to identify the two issues most impor-
tant to their counterparts, nor did DI affect the accuracy in iden-
tifying the two least important issues.
As shown in Table 3 and consistent with Hypothesis 2a, nego-
tiators’ outcomes were impaired when they possessed NDI. Pos-
sessing DI did not impair negotiators’ outcomes. However, DI had
a marginally significant negative effect on counterparts’ outcomes.
Table 3 displays the mean points by condition. Table 3 also reveals
that primed power, the interaction of primed power and NDI, and
the interaction of primed power and DI did not significantly
influence negotiator outcomes. Hypothesis 3 therefore did not
receive support.
Reduced information exchange partially mediated the relation-
ship between possessing NDI and impaired negotiation outcomes.
Relative to negotiators in the control condition, negotiators pos-
sessing NDI revealed less information about preferences for dif-
ferent outcomes during the negotiation (&!'.31, z!'2.53, p!
.01). Revealing information was associated with higher points
claimed (&!.34, z!2.80, p!.01). When we controlled for the
amount of information exchanged, the effect of NDI on negotiator
points remained significant (&!'.24, z!'2.00 p!.05). The
test of mediation was significant (z(!'1.97, p%.01) (see
MacKinnon, Lockwood, Hoffman, West, & Sheets, 2002).
We tested the possible alternative explanations that possessing
NDI impaired negotiator outcomes by instilling liking, trust, or
feelings of similarity with the counterpart. As possessing NDI did
not significantly affect any of these variables (all ps#.10), these
variables did not mediate the relationship between NDI and im-
paired negotiation performance.
Dyadic-level outcomes. As predicted in Hypothesis 2b, dy-
ads in which a negotiator possessed NDI created significantly less
value than did control condition dyads, t(45) !2.11, p!.04, d!
0.68. Reduced information exchange accounted for the reduction
in total points created in dyads in which one party possessed NDI.
As Figure 1 illustrates, adding the counterpart-generated rating of
Table 1
Means, Standard Deviations, and Correlations Among Study 1 Variables
Variable 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1. Nondiagnostic
information —
2. Diagnostic information '.25
3. Counterpart nondiagnostic
information '.26
4. Counterpart diagnostic
information '.25
5. Power .00 '.03 .00 .03 —
6. Own points '.21
.08 .03 '.04 '.02 —
7. Total points '.13 .03 '.13 .03 .00 .73
8. Information revealed
(reported by center) '.08 '.02 '.09 '.02 .08 .26
9. Liking of counterpart .14 .11 '.01 '.08 '.06 .11 .15 .12 —
10. Similarity to counterpart .01 '.08 .04 '.08 .03 .13 .17
.15 .51
11. Trust of counterpart .02 .08 '.01 '.14 .04 .26
.09 .61
12. Knowl. of counter’s
lowest priorities '.06 .00 '.14 .04 .00 .25
.09 '.10 .03 .05 —
13. Knowl. of counter’s top
priorities .06 '.06 .13 '.13 .09 .15 .15 .10 .06 .09 .04 .05
14. Radeco Role .00 .00 .00 .00 '.12 .13 .00 '.03 .02 '.01 .04 .06 '.03 —
15. Female .06 '.01 .06 .06 .01 .02 '.05 '.01 .03 '.10 '.03 .02 '.02 .12 —
M0.21 0.19 0.21 0.19 0.50 4,173 8,345 4.73 5.24 4.42 4.83 0.24 0.29 0.50 0.46
SD 0.41 0.40 0.41 0.40 0.50 1,088 1,589 1.43 1.15 1.68 1.31 0.43 0.46 0.50 1.00
Note. Knowl. !Knowledge.
Table 2
Random Intercept Models:- Experiment 1
Dependent variable
Model 1: Information
Model 2: Knowledge of
counterpart’s least
important issues Model 3: Own points
Coefficient SE Coefficient SE Coefficient SE
Fixed effects
Intercept 4.95 0.16 0.29 0.06 4,371
Power 0.43 0.38 0.10 0.10 172 270
Nondiagnostic information (NDI) '0.96
0.33 '0.26
0.10 '846
Counterpart NDI '0.49
0.16 '0.10
0.05 '182 138
Diagnostic information (DI) '0.75
0.34 '0.12 0.12 '191 272
Counterpart DI '0.79
0.31 '0.15 0.11 '462
NDI $Power 0.23 0.15 0.02 0.04 69 111
DI $Power '0.06 0.16 0.06 0.05 113 113
Female 0.35
0.20 '0.05 0.08 115 171
Dependent variable Variance component SE (r
)Variance component SE (r
)Variance component SE (r
Random effects
Level 1 0.38 0.62 (.16) 0.002 0.04 (.86) 51,073 226 (.40)
Level 2 1.57 1.25 (.02) 0.179 0.42 (.00) 11,020,596 3,320 (.00)
Deviance 537 194 2,468
Intraclass correlation 0.81 0.99 1.00
revealed information to the equation regressing total points on NDI
reduced the effect of NDI to nonsignificance. The test of mediation
was significant (z(!1.77, p%.01). DI did not significantly affect
value creation.
Negotiators possessing NDI about a counterpart were less suc-
cessful in exchanging task-related information and achieved infe-
rior negotiation outcomes. Suggesting that asymmetric informa-
tion interfered with the exchange of more useful forms of
information, negotiators possessing NDI less accurately identified
the counterparts’ least important issues at the negotiations’ con-
clusions. We did not find support for our hypothesis that value
claiming would be most reduced for high-power negotiators who
received NDI.
Experiment 2
In Experiment 2, we further examined how NDI affects nego-
tiation behavior and outcomes. Extending Neale and Bazerman’s
(1991) emphasis on cognitive processing and information ex-
change, we examined the impact of NDI in an electronically
mediated negotiation. Using this format allowed us to understand
more fully how NDI affects information exchange and processing
within negotiations. It also allows us to examine whether negoti-
ators with NDI make smaller concessions, fewer concessions, or
concessions that create less value. In Experiment 2, we also
examined whether NDI increases the rate of impasses, as may be
the case if NDI instills a sense of advantage. We also examined
whether the reduced information exchange seen in Experiment 1
resulted from the instructions prohibiting participants from refer-
ring to the NDI. Furthermore, we included new measures to assess
whether NDI heightened negotiators’ expectations of their own
performance, and we included a condition in which both negotia-
tors possessed NDI. Finally, we manipulated power instead of
priming it.
Participants and experimental design. A total of 140 (64%
female; M
!31) participants from a Web-based participant
pool completed the exercise for a $13 gift certificate and the
chance to win a $99 gift certificate. Their odds of winning were
based on their negotiation performance. The experimental design
of the study included the mixed-dyad variables of high-power and
low-power possession of NDI about the counterpart (possess vs.
not possess), the within-dyad variables of role (Tolliver Company
Representative vs. Radeco Company Representative) and power
(high power vs. low power), and the between-dyad variable of
instructions not to refer to the NDI (instructions not to refer vs. no
Procedure. Participants completed the Keirsey Temperament
Sorter and received a link to their negotiation instructions. Half the
negotiators were given the same NDI about their counterparts as
was used in Experiment 1. In half of those cases, the instructions
about confidentiality were omitted. A questionnaire asked negoti-
ators to provide the content of their initial e-mail message and why
they wanted to begin negotiations in that way. The contents of their
messages were e-mailed to their counterparts, and negotiators were
told that they could continue negotiations by sending an e-mail to
a university mailbox. Negotiators were sent a postnegotiation
questionnaire after they had reached an agreement or an impasse.
Negotiation task. Participants engaged in the same negotia-
tion exercise used in Experiment 1. Power was manipulated within
the negotiation instructions using a technique described by Over-
beck, Neale, and Govan (2010). Specifically, participants in the
high-power position were told “You are in a very strong negoti-
ating position and can afford to use your leverage to get a good
deal”; participants in the low-power position were told “You are in
a very weak negotiating position and do not have much leverage to
get a good deal.” Participants were told the number of points they
would attain should they fail to reach an agreement.
Dependent variables. Points claimed by the individual ne-
gotiator and by the dyad and the rate of impasses served as the
primary dependent variables. Measures of liking, similarity, and
trust of the counterpart were also collected. Negotiators also indi-
cated how many points they expected to accumulate.
A postnegotiation questionnaire was administered that included
many of the questions found in the questionnaire used in Experi-
ment 1. The number of messages negotiators sent and the number
Table 3
Mean Points Accumulated by Negotiators by Information Provided in Experiment 1
Information provided Points
Negotiator Counterpart # of dyads Negotiator Counterpart Total
No information No information 15 4,500 (1,050) 4,500 (1,050) 9,000 (1,478)
NDI No information 16 3,719 (1,099) 4,231 (1,138) 7,950 (1,613)
DI No information 15 4,347 (1,067) 4,093 (975) 8,440 (1,543)
Note. NDI !nondiagnostic information; DI !diagnostic information. Values in parentheses indicate standard deviations.
Information -.30*/
-.17 (p=.24)
Amount of Information Negotiators
Revealed about Their Preferences
for Different Outcomes
Total Value Created
By Dyad
Figure 1. Experiment 1 mediation analysis.
p%.05. z(!1.77
(MacKinnon et al., 2002).
of words the negotiators used in those messages were counted.
Two independent raters who were blind to hypotheses and condi-
tions coded whether negotiators expressed their prioritization of
different issues in those messages. An examination of whether
negotiators with NDI would be less attentive to information re-
vealed by their counterparts and would make concessions that
created less value than those made by negotiators without such
information was conducted. To calculate the value creation asso-
ciated with a concession, the points the negotiator making the
concession would lose relative to his or her previous offer were
subtracted from the points the counterpart would gain from the
offer relative to the previous offer. By asking negotiators to convey
their initial positions on all six issues prior to beginning the
negotiation, the size of concessions was computed even if the
negotiator message mentioned only one or two issues. The size and
the number of concessions were examined.
Treatment of data. Neither the effect of the role nor the
Role $NDI interaction was significant ( ps#.8). We therefore
combined roles in all subsequent analyses. Receiving instructions
to keep NDI confidential did not affect negotiator outcomes ( p#
.6); we therefore also pooled results from these conditions. We
excluded eight dyads, distributed across conditions, from the anal-
ysis because of one member’s failure to follow the negotiation
instructions. Excluding these dyads did not significantly affect
Expectations entering the negotiation. A 2 (high-power
position vs. low-power position) $2 (NDI vs. no NDI) ANOVA
revealed significant main effects for power and NDI on expected
outcomes. Negotiators in the high-power position expected to
accumulate more points (M!5,877, SD !2,425) than did those
in the low-power position (M!4,787, SD !1,831), F(1, 135) !
5.25, p!.02, d!0.51. Negotiators given NDI expected to
accumulate more points (M!5,710, SD !2,414) than did those
not given NDI (M!4,941, SD !1,917), F(1, 135) !9.87, p!
.01, d!0.35. The interaction between NDI and power was not
significant ( p#.8). A logistic regression revealed negotiators
with NDI were significantly more likely to report a perception of
advantage entering the negotiation (M!35% vs. M!22%, B!
.78, SE !0.40, Wald !3.76, p!.05, Exp(B) !2.17). Power also
had a significant positive effect ( p%.05) on perceptions of
NDI and unsuccessful information exchange. Table 4 dis-
plays correlations among all variables. As Table 5 reveals, nego-
tiators possessing NDI were not reported by their counterparts as
less revealing of information about their preferences for different
outcomes than were negotiators without such information. They
were also no less knowledgeable about their counterparts’ priori-
ties at the negotiation’s conclusion ( p#.5). Furthermore, the
number or length of messages sent between negotiators did not
vary across condition ( ps#.10). Coders’ ratings (interrater "!
.81) indicated that they also did not make fewer (or more) state-
ments about their prioritization of issues within those messages
(ps#.2). We therefore found no evidence that NDI curbed
information sharing.
However, the results suggested that negotiators with NDI were
less attentive to information about counterparts’ interests and
preferences for different outcomes and less effective at capitalizing
on differences in negotiator priorities. Each concession made by
negotiators possessing NDI created 189 (SD !953) points in
value, whereas each concession made by negotiators not possess-
ing such information created 483 (SD !755) points in value,
t(129) !1.95, p!.05, d!0.34. The concessions made by
negotiators without NDI did not yield the counterpart significantly
more points (M!1,540, SD !1,433 vs. M!1,610, SD !1,566),
t(127) !0.28, p!.78, d!0.04, or cost the conceding negotiator
significantly fewer points (M!1,051, SD !1,367 vs. M!1,430,
SD !1,442), t(127) !1.549, p!.12, d!0.27, than did
concessions made by negotiators possessing NDI. However, the
difference between gain and the sacrifice was significantly greater
(and more positive) for negotiators who did not possess NDI.
Model 2 of Table 5 displays this effect.
Individual outcomes. Consistent with Hypothesis 2a and
shown in Table 5, negotiators’ outcomes were significantly im-
paired when they possessed NDI. Table 6 displays the negotiators’
mean points by condition. Mediation analysis suggests that nego-
tiators with NDI accumulated less value due to their inability to
use information about their counterparts’ interests and preferences
for different outcomes to make value-creating concessions. Re-
ceiving NDI led negotiators to make concessions that created less
value (&!'.17, z!'1.97, p!.05). Making value-creating
concessions was associated with higher points claimed (&!.32,
z!3.76, p%.001). Including this measure of value creation in
concessions reduced the previously significant effect of possessing
NDI on points claimed (&!'.18, z!2.08, p!.04) to
nonsignificance (&!'.15, z!1.81, p!.07). The test of
mediation was significant (z(!'1.73, p%.01) (MacKinnon et
al., 2002).
In Hypothesis 3, we predicted that possessing NDI would be
particularly harmful for powerful negotiators. Although the Power $
NDI interaction did not reach significance, more specific planned
contrasts recommended by Rosnow and Rosenthal (1989) revealed
that high-power negotiators claimed significantly fewer points when
they possessed NDI (M!3,073, SD !1,192 vs. M!3,733, SD !
1,475), t(67) !2.04, p!.05, d!0.49, whereas low-power nego-
tiators did not accumulate significantly fewer points ( p!.47). Trust,
similarity, and liking of the counterpart did not independently explain
the impaired performance of negotiators possessing NDI.
Dyadic outcomes. Consistent with Hypothesis 2b, negotia-
tors in dyads in which at least one negotiator possessed NDI
created less value (M!6,088, SD !1,610) than did dyads in the
control condition (M!7,271, SD !1,216), t(65) !2.81, p!.01,
d!0.84. Dyads in which both parties possessed NDI created
significantly less value (M!5,989, SD !1,700) than did dyads
in the control condition, t(65) !2.34, p!.02, d!0.87. A
significantly higher rate of impasses in dyads in which at least one
negotiator possessed NDI, )
(1) !5.7, p!.02, contributed to the
difference in value creation across conditions.
When neither ne-
When we excluded the results of negotiations ending in impasses,
dyads in which at least one negotiator possessed NDI generated nonsig-
nificantly fewer points (M!6,710, SD !1,449) than did dyads in which
neither negotiator possessed NDI (M!7,271, SD !1,216), t(51) !1.44
p!.16, d!0.42. Thus, the difference was no longer significant when we
excluded impasses.
Table 4
Means, Standard Deviations, and Correlations Among Study 2 Variables
Variable 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
1. Nondiagnostic
information —
2. Counterpart
information .00 —
3. Power '.04 .04 —
4. Own points '.18
'.05 .17
5. Total points '.20
.00 .61
6. Impasse likelihood .17
.00 '.38
7. Information revealed
(reported by
counterpart) .06 .12 '.06 .16 .19
'.12 —
8. Number of concessions .12 .12 '.04 '.08 '.13 .17 .05 —
9. Points sacrificed per
concession .13 '.10 '.02 '.08 .01 '.20
.01 '.32
10. Points gained by
counterpart per
concession '.02 .16 .06 '.11 '.35
'.06 .40
11. Points sacrificed–Pts.
gained .17
.12 .06 '.32
'.08 .17 .20
12. Predicted points .18
.07 .25
'.05 '.13 .16 .02 .06 '.02 .06 .07 —
13. Liking of counterpart .23
'.04 .00 '.06 '.13 .10 .09 '.07 .14 '.08 .08 '.12 —
14. Similarity to counterpart .29
'.11 '.11 '.02 .03 '.02 .07 .10 '.08 .12 .06 '.01 .33
15. Trust of counterpart .16 .01 .05 '.11 '.11 .06 .10 '.04 .11 '.07 .07 '.07 .52
16. Radeco role .04 '.04 '.03 '.02 .01 .00 '.08 '.03 '.11 .06 '.06 '.09 .06 .03 .04 —
17. Female '.12 '.05 .14 '.10 '.12 .04 .05 '.14 '.03 .04 .01 .21
.09 .02 '.04 '.02 —
M0.51 0.51 0.00 3,198 6,371 0.20 3.67 2.75 1,241 '1,575 '335 5,328 4.01 3.91 3.39 0.50 0.64
SD 0.50 0.50 1.00 1,321 1,580 0.40 1.74 1.52 1,402 1,496 870 2,208 1.01 1.45 1.28 0.50 0.48
gotiator possessed NDI, none of the 17 dyads reached impasses.
When one negotiator possessed NDI, the dyads reached impasses
in 10 of 34 dyads, and when both negotiators possessed NDI, the
dyads reached impasses in five of 18 dyads.
Negotiators with NDI achieved inferior outcomes and were
significantly more likely to reach impasses in these electronically
mediated negotiations—a sign that they were not exchanging
information about preferences in ways that allowed them to dis-
cover mutually beneficial agreements. Although negotiators with
NDI did not transmit different amounts of information about their
preferences in this electronically mediated negotiation than did
those without NDI, negotiators with NDI seemed less able to use
the information that was transmitted. Thus, NDI may impair how
effectively negotiators incorporate more diagnostic information.
This distinction would not have been easily discovered in Exper-
iment 1’s face-to-face negotiation, as negotiators themselves may
not have been aware of this distinction.
General Discussion
Although negotiators are often encouraged to learn as much as
they can about their counterparts to gain informational advantages
(Neale & Bazerman, 1991), the effects of attending to different
forms of information about the counterpart on negotiator perfor-
mance have not been previously explored. In our studies, possess-
ing NDI about a counterpart impaired negotiator effectiveness in
both face-to-face and electronically mediated negotiations. Be-
cause NDI interferes with the exchange of more DI, negotiators
with NDI are less able to reach mutually beneficial solutions and
accumulate value for themselves. Negotiators with NDI were also
more likely to reach impasses in electronically mediated negotia-
Table 5
Random Intercept Models:- Experiment 2
All judgments
Dependent variable
Model 1: Information
Model 2: Own points
sacrificed/concession Model 3: Own points
Coefficient SE Coefficient SE Coefficient SE
Fixed effects
Intercept 3.66
0.17 1,218
87 3,197
Nondiagnostic information (NDI) 0.11 0.16 144
73 (232)
Counterpart NDI 0.21 0.16 63 72 (90) 107
NDI $Counterpart NDI 0.01 0.17 24 91 106 92
Power (0.12) 0.12 53 46 234
NDI $Power (0.14) 0.13 (20) 54 (127) 109
Female 0.13 0.26 (150) 120 (319) 234
Number of concessions 10 54
Counter points gained/concession (0.85)
Dependent variable Variance component SE (r
)Variance component SE (r
)Variance component SE (r
Random effects
Level 1 1.02 1.01 (.99) 437,398 661 (.00) 1,989 44.6 (.20)
Level 2 2.01 1.42 (.00) 274,154 524 (.85) 1,667,234 1,291.2 (.04)
Deviance 540 2,020 2,280
Intraclass correlation .66 .39 1.00
Note. Values in parentheses indicate standard deviations.
Table 6
Mean Points Accumulated by Negotiators by Information Provided in Experiment 2
Information provided
# of dyads
High-power negative Low-power negative High-power negative Low-power negative Total
No information No information 17 3,806 (1,509) 3,465 (1,465) 7,271 (1,216)
NDI No information 19 2,889 (1,028) 3,342 (1,249) 6,231 (1,647)
No information NDI 15 2,960 (1,642) 3,067 (1,582) 6,027 (1,551)
NDI NDI 18 3,061 (1,164) 2,998 (1,055) 5,989 (1,700)
Note. NDI !nondiagnostic information. Values in parentheses indicate standard deviations.
In Experiment 1, negotiators possessing NDI were, at the nego-
tiation’s conclusion, less accurate in identifying the counterpart’s
least important issues—and it is these issues that may be the key
to proposals that maximize value creation. So although NDI did
not crowd out all information, our results do suggest that NDI can
influence negotiators’ abilities to see the nuanced opportunities for
value creation presented by asymmetric interests.
NDI also had a detrimental effect on information exchange and
negotiation outcomes in electronically mediated negotiations. Ne-
gotiators given NDI reached more impasses and were less able to
make value-enhancing concessions than were negotiators not pos-
sessing NDI.
We did not find full support across our studies for the idea that
negotiators in positions of power are more vulnerable to the perils
of possessing NDI. Specifically, in Experiment 1 we found no
evidence that power moderated the effect of NDI. Although the
results of Experiment 2 indicated that it was only negotiators in
positions of high power whose outcomes were significantly im-
paired by possessing NDI, it is clear that more research on the
interaction of power and information is needed. For example,
research could explore how the basis of one’s power (French &
Raven, 1959) affects how attentive an individual is to different
forms of information, as expert and coercive forms of power might
have dramatically different effects.
The present article extends Neale and Bazerman’s (1985) find-
ing that overconfident negotiators create less integrative outcomes
by suggesting that possessing irrelevant information may cause
illusory perceptions of knowledge that may impair negotiators’
performances. It also furthers our understanding of how NDI can
influence strategic behavior. Although previous research on the
dilution effect has proven that NDI can crowd out DI (Nisbett et
al., 1981; Zukier, 1982), our studies are unique in demonstrating
that pseudorelevant information (Hilton & Fein, 1989) can inhibit
information exchange in competitive social interactions. More-
over, the studies suggest that negotiators should critically evaluate
how well they know the preferences and tendencies of their coun-
terparts, especially if they possess potentially extraneous informa-
tion about them.
A limitation of the present studies is that the DI had more of a
task-specific component to it than did the NDI. Future studies
could productively explore how DI about the counterpart’s per-
sonality affects negotiator behavior.
In summary, we have found that possessing NDI can lead
negotiators to create and claim less value and that it is the inat-
tention to more diagnostic forms of information resulting from the
possession of NDI that drives the impairment in performance. As
a result, we caution negotiators against indiscriminately attending
to all forms of information about their counterparts. As the old
adage goes, a little knowledge is a dangerous thing.
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Forms of Information Given to Negotiators in Experiment 1
Nondiagnostic Information
You have a need for other people to like and admire you, and yet
you tend to be critical of yourself. While you have some person-
ality weaknesses, you are generally able to compensate for them.
You have considerable unused capacity that you have not turned to
your advantage. Disciplined and self-controlled on the outside, you
tend to be worrisome and insecure on the inside. At times you have
serious doubts as to whether you have made the right decision or
done the right thing. You prefer a certain amount of change and
variety and become dissatisfied when hemmed in by restrictions
and limitations. You also pride yourself as an independent thinker,
and do not accept others’ statements without satisfactory proof.
But you have found it unwise to be too frank in revealing yourself
to others. At times you are extroverted, affable, and sociable, while
at other times you are introverted, wary, and reserved. Some of
your aspirations tend to be rather unrealistic.
Diagnostic Information
You have inside information that Tolliver (Radeco) Corporation
places much more importance on the issues of Pension Plan and
Upper Management Composition (Factory and Pay Basis) than
they do on the issues of Factory Location and Pay Basis (Pension
Plan and Upper Management Composition).
Received March 23, 2009
Revision received September 30, 2010
Accepted October 5, 2010 !
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... The importance of have a good amount and quality of communication for the success of mergers and acquisitions was appointed by the respondents, this opinion is in line with what was observed in the literature review (Wiltermuth and Neale, 2011;Faisal et al., 2016). As mentioned by Konstantopoulos et al. (2009), when there is lack of communication, it creates feelings of insecurity and allows negative rumors to spread. ...
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Background/Purpose: This work is focused on the variables that influence the outcomes of mergers and acquisitions, by learning from past mistakes, adopt better strategies and make wiser decisions to enhance the outcomes of their mergers and acquisitions. Using a qualitative approach, this research contributes to existing knowledge on mergers and acquisitions performance by exploring the cultural, managerial and organizational factors dimensions through an integrative approach using multiple perspectives. Methodology: Fifteen interviews were conducted with experienced professionals in multiple areas of mergers and acquisitions. Content analysis was used to interpret the results. This enabled to achieve a more complete set of answers and potential solutions while comparing opinions on the same problems from slightly different angles. Results: Results show the existence of managerial hubris, emotional attachment and over-optimism in mergers and acquisitions. There was a relative support towards standardizing the process of mergers and acquisitions deals, but respondents advise to keep some creativity and flexibility. Conclusion: The article concludes by addressing key issues for mergers and acquisitions performance: capabilities and experience; organizational communication; internal coordination; and, key issues for decision-making.
... 10. As a cautionary note with regard to collecting such insights via sophisticated social media research, Wiltermuth and Neale (2011) have shown the perils of accumulating an excessive amount of (potentially extraneous) information about negotiation counterparts. Negotiators must balance the benefits of extensive information-gathering with the potential for distracting data that could impair effectiveness. ...
While social media has had profound effects in many realms, the theory and practice of negotiation have remained relatively untouched by this potent phenomenon. In this article, we survey existing research in this area and develop a broader framework for understanding the wider roles and effects of social media on negotiation. Through a series of detailed case studies, we explore how social media can drive important negotiations either off the rails or toward beneficial outcomes—and how savvy practitioners can harness this often‐neglected factor to their advantage, or else find themselves outmaneuvered by more digitally sophisticated parties. Applying the lens of the “3D negotiation” approach developed by Lax and Sebenius, we describe a number of potentially decisive roles that social media can play to enhance actions by negotiators “at the table,” with respect to deal design, and “away from the table.” In this 3D context, we show how social media can help negotiators learn about their counterparts (interests, perceptions, relationships, and networks), directly and indirectly influence the parties, mobilize supporters, and neutralize potential opponents. We show that being proactive—both in cultivating digital influence or allies and in building resilience to threats across online information ecosystems—can provide critical advantages for negotiators navigating a hyperconnected world. We develop a preliminary framework to help identify the full range of platforms, tools, and methodologies appropriate for the use of social media in negotiations, including network mapping software and open‐source intelligence techniques. Throughout our analysis, we stress the importance of ethical and privacy considerations.
... It should be noted that recent work has begun to look more carefully at impasse rates, perhaps in response to the acknowledgment that a better understanding of this underexplored outcome would contribute to our understanding of the negotiation process as a whole (Tripp & Sondak, 1992). For example, impasse rates have recently been used as a dependent measure when examining the impact of anger (Yip & Schweinsberg, 2017), nondiagnostic information (Wiltermuth & Neale, 2011), and empathy and perspective taking on negotiation performance. However, to our knowledge, impasse rates have yet to be used as a primary measure when studying the role of gender in negotiation. ...
A substantial body of prior research documents a gender gap in negotiation performance. Competing accounts suggest that the gap is due either to women's stereotype-congruent behavior in negotiations or to backlash enacted toward women for stereotype-incongruent behavior. In this article, we use a novel data set of over 2,500 individual negotiators to examine how negotiation performance varies as a function of gender and the strength of one's alternative to a negotiated agreement. We find that the gender gap in negotiation outcomes exists only when female negotiators have a strong outside option. Furthermore, our large data set allows us to examine an understudied performance outcome, rate of impasse. We find that negotiations in which at least one negotiator is a woman with a strong alternative disproportionately end in impasse, a performance outcome that leaves considerable potential value unallocated. In addition, we find that these gender differences in negotiation performance are not due to gender differences in aspirations, reservation values, or first offers. Overall, these findings are consistent with a backlash account, whereby counterparts are less likely to come to an agreement and therefore reach a potentially worse outcome when one party is a female negotiator empowered by a strong alternative. (PsycInfo Database Record (c) 2021 APA, all rights reserved).
In two studies, we examine how objective complexity—in terms of numbers of negotiable issues—affects negotiators’ aspirations, perceptions, actions, and ultimately, the quality of agreements they reach. We hypothesized and found that when negotiators had a greater number of issues to resolve, they were less ambitious for their own outcomes and developed less accurate insights into their partners’ interests.
Conference Paper
Culture and gender have been separately studied as important factors that influence individual's negotiation strategy and outcome. This study proposed a need to corporate these two together in negotiation research under an interactive perspective by providing a meta-analytic review on high- versus low-context culture as a strong moderator in gender difference of negotiation performance. Studies reporting the objective negotiation outcomes from high- versus low-context cultures were reviewed. Altering the previous consensus that male negotiation performance was better than female, results revealed that in low context cultures, male negotiators performed better than women, whereas in high context cultures, women have better negotiation performance than men. The theoretical and practical implications are highlighted in discussion.
Cambridge Core - Organisation Studies - The Cambridge Handbook of Technology and Employee Behavior - edited by Richard N. Landers
The Cambridge Handbook of Technology and Employee Behavior - edited by Richard N. Landers February 2019
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A Monte Carlo study compared 14 methods to test the statistical significance of the intervening variable effect. An intervening variable (mediator) transmits the effect of an independent variable to a dependent variable. The commonly used R. M. Baron and D. A. Kenny (1986) approach has low statistical power. Two methods based on the distribution of the product and 2 difference-in-coefficients methods have the most accurate Type I error rates and greatest statistical power except in 1 important case in which Type I error rates are too high. The best balance of Type I error and statistical power across all cases is the test of the joint significance of the two effects comprising the intervening variable effect.
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Nisbett, Zukier and Lemley presented evidence for a "dilution effect," in which information nonpredictive of a stimulus person's behavior "watered down" or diluted the predictive value of categorical information diagnostic of that behavior Two experiments suggest, however that nondiagnostic information influences prediction by altering the perceived goodness of fit between the stimulus person and the diagnostic category. The authors conclude that (a) Nisbett et al. found evidence for dilution because their nondiagnostic items decreased the goodness of fit between the stimulus person and the diagnostic category and (b) depending on the typicality of the nondiagnostic items, it is possible to dilute, enhance, or leave unchanged the predictability between category and behavior The structure of social categories, and the importance of typicality in the stereotyping process, is discussed.
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Much of the economic literature on Alternative Dispute Resolution ("ADR") displays a surprising failure to differentiate between types of dispute resolution devices. Often when economists purport to examine the efficiency of ADR, they focus exclusively on arbitration or other forms of private adjudication. Mediation—negotiation facilitated by a neutral third party—has received far less attention than arbitration in the economic literature. The neglect of mediation is particularly surprising because mediation is more "alternative" than arbitration. Arbitration (in both its binding and nonbinding forms) asks the arbitrator to replicate the decision of a court. A mediator, by contrast, stops short of recommending how the dispute should be resolved. By focusing on arbitration when they examine ADR, economists have failed to provide a coherent rationale for mediation. The ADR literature has succeeded in fleshing out noneconomic explanations for mediation. Robert Mnookin and Lee Ross, for example, have suggested several ways in which a mediator might overcome psychological barriers to conflict resolution, but they have not explained how a mediator might overcome the barriers created by the strategic interaction of two rational, self-interested negotiators. We agree that mediators are valuable in helping parties overcome a broad variety of psychological barriers. The goal of this Article, however, is to identify how mediation also could increase the efficiency of bargaining from an economic or strategic perspective.
This article examines the influence of nondiagnostic information on auditor judgment. The article is based on Karl Hackenbrack's 1992 study which showed that auditors, given a mix of diagnostic and nondiagnostic evidence, made fraud-risk assessments that were less extreme than those based on diagnostic evidence only. The author investigates in a laboratory setting whether auditors exhibit the dilution effect when faced with time pressure and accountability. He discovered that time pressure reduced but did not eliminate the dilution effect. He therefore concludes that accountability had no significant influence on the dilution exhibited by auditors.
Mock jurors learned incriminating information about a defendant in the context of pretrial publicity (Study 1) or testimony introduced in the trial but ruled inadmissible (Study 2). Despite the judge's instructions that they disregard the information, jurors' verdicts were affected significantly by the information, unless the jurors were made suspicious about the motives underlying the introduction of this information. That is, jurors given reason to be suspicious about why the incriminating information was introduced into the media or the trial offered verdicts that did not differ from those made by jurors who were not exposed to the incriminating information. The potential role of suspicion in weakening the biasing effects of a variety of nonevidentiary factors on jurors' verdicts is discussed, as is the role of suspicion in social-cognitive processes more generally.
This research expands the finding that nondiagnostic information about a target reduces the impact of stereotypes on a person perception and social judgment. Specifically, we examined this dilution effect in settings of mixed-motive outcome-interdependence and studied stereotype-based cognition as well as cooperative behavior. Three experiments employing Prisoner′s and Chicken Dilemma Games revealed that people cooperate less when category information suggests that the other is competitive and immoral rather than cooperative and honest, but not when nondiagnostic attribute information is added. Moreover, Experiment 3 shows that people are motivated to interpret attribute information as consistent with their stereotype-based beliefs; dilution occurs only when it is impossible to construe attribute information as consistent with the stereotype. Implications to both the person perception literature and interdependence and conflict resolution theories are discussed.