To Bid or Not to Bid? That is the Question! First‐ Versus Second‐Mover Advantage in Negotiations

As negotiation is seen as a key component of managerial skills and effectiveness (Beenen and Barbuto 2014), it is an essential topic in courses, textbooks, and seminars on management and business (Whetten and Cameron 2011). The typical negotiation syllabus usually covers a few core topics, one of which is first offers in negotiation (Thompson 2005). But recent research may contradict the common advice given to management students in negotiation courses, namely, that one should strive to make the first offer in negotiations. Consider the following research example, which involved a scenario centered around negotiating the price of an antique sculpture (Maaravi and Levy 2017). The participants, playing a seller and an antique shop owner (i.e., the potential buyer), received different levels of information regarding the antique sculpture. The experiment materials included a picture of a rare Eider Drake sculpture taken from the official Sotheby's website, where its value was estimated at $350,000 to $500,000. The results supported the authors' hypothesis that in situations of information asymmetry, both negotiation parties would have been better off moving second. Indeed, the average offer made by the seller, who lacked information about the sculpture's value, was significantly lower ($324.27, SD = 683.52) than the average offer made by the antique shop owner ($236,631.89, SD = 253,561.26), who was informed about market prices. This laboratory research may be relevant to real‐life scenarios. For example, consider History Channel's TV series Pawn Stars where the pawnshop owner typically commences the negotiation by asking: “How much do you want for it?” (e.g., Donahue et al. 2009). The world‐famous Gold & Silver Pawn Shop owners, who are the stars of this reality show, are portrayed as bargaining experts. Yet if the pawnshop owners are such negotiation experts, why do they contradict the advice of most negotiation and decision‐making courses by letting their counterparts make the first offer instead of doing so themselves?

Negotiation scholars and educators have long argued that first offers serve as anchors that affect both counteroffers and settlement prices. Consequently, as noted above, negotiation articles, books, courses, and seminars usually recommend that negotiators move first to “anchor” their counterparts (e.g., Galinsky and Mussweiler 2001). However, recent research describes a practitioner–researcher paradox (Loschelder et al. 2014), wherein negotiation practitioners and experts advise the opposite strategy: to move second in negotiations (Dell and Boswell 2009). For example, Jack Binion, operator of Binion's Horseshoe Resort in Las Vegas, describes a situation wherein a Mississippi family who owned some farmland was contemplating how to approach negotiations with a prospective resort developer. The family settled on opening the negotiation with a $5 million asking price, although they worried that this high initial asking price might scare off the potential buyer. Yet, fortunately for them, the buyer made the opening offer: $20 million, which was eventually negotiated up to $25 million (Korobkin 2021). We acknowledge that the extreme negotiation dynamics portrayed in this example might be rare in everyday negotiations. But Binion—one of many practitioners who argue for a second‐mover advantage—uses this story to emphasize and strengthen his expert advice: do not move first in negotiations. Based on such examples and expert advice, a growing body of research explores the conditions under which it is disadvantageous to move first in negotiations (Loschelder et al. 2014, 2016; Maaravi and Levy 2017; Maaravi and Heller 2021).

The current article aims to integrate the findings of both research avenues, thus giving managers, negotiators, and scholars a paradigm for analyzing—for most negotiations—whether to move first or second. To that end, we focus on three central factors predicting and explaining first‐ versus second‐mover advantage in negotiations: information, power, and strategy (Bazerman and Neale 1993; Thompson 2005; Shell 2006; Malhotra and Bazerman 2007a, 2007b).

The article begins by explaining why first offers have become an increasingly essential topic of academic research on negotiation. It then presents the academic theory behind the effect of first offers by explaining the anchoring and adjustment heuristic as one of the most influential rules of thumb people use to make decisions. The third section describes the anchoring tactic (i.e., “Go first; make a fairly extreme offer”) and some relevant research findings. In the fourth section, we discuss the growing body of research that points to the limitations and drawbacks of moving first or using the anchoring tactic in negotiations. These sections lead to the article's main question: Should negotiators follow scholarly advice to move first or that of experts and practitioners to move second? In the next section, we attempt to integrate the conflicting findings regarding the possible first‐ versus second‐mover advantage and focus on three of the most critical factors in negotiations: information (private and market), power, and strategy. We conclude our analysis with an integrative model for both scholars and negotiation experts and discuss limitations and future research.

In the past three decades, first offers have become an increasingly essential topic of academic research on negotiation (e.g., Ritov and Moran 2008; Shalvi, Moran, and Ritov 2010; Maaravi, Ganzach, and Pazy 2011; Gunia et al. 2013; Ames and Mason 2015; Schaerer, Loschelder, and Swaab 2016) for two reasons. First, as opposed to other elements that are not always relevant (e.g., cross‐cultural negotiations, see Adair and Brett 2005), every negotiation must start with a first offer (Maaravi, Pazy, and Ganzach 2014). Second, research has demonstrated that first offers might determine the process and outcomes of negotiations by affecting both counteroffers and settlement prices. For example, in a foundational study examining first offers' effects on negotiations' outcomes, participants were given a negotiation scenario wherein they were either buying or selling a pharmaceutical manufacturing facility (Galinsky and Mussweiler 2001). Both buyers and sellers were given the same information: The seller had purchased the plant three years prior for $15 million; this was below market value, as the plant was appraised two years earlier at $19 million; and a plant similar to the one being sold was recently sold for $25 million. Results showed that sellers made higher first offers than did buyers ($26.6 million and $16.5 million, respectively). Moreover, the initiator's identity significantly affected the final agreement. When sellers made the first offer, the final agreed‐upon price was substantially higher than when buyers made the first offer ($24.8 million and $19.7 million, respectively). This result and the numerous studies described below led most scholars, educators, and authors to believe that making the first offer is one of the most crucial success factors in negotiations.

While there are multiple types and definitions of negotiations, most scholars and practitioners agree that all negotiations involve decision‐making processes. Consequently, many of the heuristics and biases described in decision‐making literature apply to negotiation (Tversky and Kahneman 1974). One of the heuristics shown to be relevant to negotiation is the anchoring and adjustment heuristic (e.g., Maaravi, Pazy, and Ganzach 2014). According to this heuristic, decision‐makers tend to cling to a given number (anchor) and adjust therefrom when they judge an unknown quantity. For example, asking people to estimate the length of a river by saying, “Before answering, decide if it is longer or shorter than 1,000 miles,” will yield different results than when people are told, “Decide if it is longer or shorter than 200 miles.” In this case, being exposed to the options of 1,000 and 200 should affect participants' subsequent responses. That is, participants exposed to 1,000 miles will give much higher estimates—closer to 1,000—than will those exposed to 200 miles, whose estimates will be closer to 200. In other words, the numbers that participants are exposed to before answering the target question are their anchors, and they tend to make subsequent adjustments based on them.

Research has shown that relying on such anchors might result in biased judgments, as adjustments are often insufficient (for a review, see Furnham and Boo 2011), and even irrelevant numbers influence decision makers, that is, asking if Gandhi lived to be 140 (see Strack and Mussweiler 1997). Additionally, research has demonstrated that the anchoring heuristic affects judgments not only in negotiations but in many other contexts, such as risk assessment (Wright and Anderson 1989), gambling (Chapman and Johnson 1994), self‐efficacy judgments (Cervone and Peake 1986), general knowledge questions (Jacowitz and Kahneman 1995), real estate evaluations (Northcraft and Neale 1987), and judicial verdicts (Englich, Mussweiler, and Strack 2006). This effect was found to be highly robust and not easily malleable (Yoon, Fong, and Dimoka 2019).

Additional findings pointing to the anchoring heuristic's robustness showed that:

• participants who were exposed to an anchor and answered a target question one week later were just as affected by the anchor as participants who answered immediately after being exposed to the anchor (Mussweiler 2001), indicating temporal robustness;

• participants who were warned about the anchoring effect, and were thus motivated to avoid it, were just as anchored as participants who knew nothing of the effect (Wilson et al. 1996), indicating robustness in the face of motivation; and

• courtroom judges who were required to determine the severity of defendants' sentences were anchored by the demands or recommendations of the prosecution, regardless of perceived relevance of the sentencing demand or the judge's years of experience (Englich and Mussweiler 2001), indicating robustness in the face of expertise (Northcraft and Neale 1987).

These findings—and especially their scope and robustness—have rendered anchoring a central concept in both negotiation research and practice. Specifically, the first offer is viewed as an anchor that can influence its recipient, leading to counteroffers that are essentially adjustments to the first offer (Galinsky and Mussweiler 2001).

In addition to this “first law of negotiation” (i.e., “Go first; make a fairly extreme offer”), scholars have long studied several specific aspects of first offers. Specifically, research has explored various boundary conditions associated with making the first offer. Some of these findings suggest that under certain circumstances or conditions, making the first offer advantage is eliminated, or even reversed. For example, Galinsky and Mussweiler (2001) identified crucial boundary conditions that undermined the positive impact of making first offers and demonstrated that respondents could eliminate first offers' anchoring effect by using a de‐biasing technique known as “consider the opposite” (e.g., considering your opponent's alternatives to the negotiation or one's own target before making the counteroffer). Specifically, they observed that when the respondent to a first offer refrained from answering immediately and instead focused on information that contradicted the implications of their initiator, the advantageous effect of making the first offer vanished. The study revealed that various factors, such as the opponent's alternatives to the negotiation, the opponent's reservation price, and one's own target, all nullified the influence of first offers on negotiation outcomes. These significant effects—observed in both face‐to‐face and email negotiations—highlight critical boundary conditions associated with the “make the first offer” negotiation strategy. Galinsky and Mussweiler's study (2001), along with other research we discuss below regarding the boundary conditions of the first‐offer advantage, serves as the foundation of the ongoing development of research on the first‐mover versus second‐mover advantage in recent years.

Research on first offers also has explored the determinants of first offer magnitude, such as counterpart's cues of economic wealth (e.g., fancy clothes or expensive cars) that were shown to result in higher first offers (Maaravi and Hameiri 2019); and the effects of adding supportive arguments to first offers, which were shown to backfire and lead to inferior counteroffers, especially when respondents could easily generate counterarguments (Maaravi et al. 2011).

As noted, there may be several limitations of and drawbacks to moving first or using the anchoring tactic in negotiations. For example, one study pointed to the negative emotional consequences of making the first offer (Rosette, Kopelman, and Abbott 2014). Despite benefiting from the first‐offer effect, participants who moved first experienced more significant anxiety and were consequently less satisfied with the outcome of the negotiation.

Another study demonstrated that learning about and using the anchoring tactic resulted in inferior long‐term psychological and economic outcomes (Maaravi et al. 2014). In a single negotiation, first movers' counterparts were less satisfied and consequently less willing to negotiate with the same negotiator in the future. In a market setting, first movers closed fewer deals and thus earned lower total profits. Additionally, Galinsky et al. (2002) showed that when negotiators' first offers were immediately accepted, they were more likely to generate counterfactual thoughts (i.e., “I could have done better,” also known in the negotiation literature as “the winner's curse,” e.g., Thaler 1992). Such thoughts led to the negotiators' lower satisfaction with their results and a lower likelihood of making future first offers.

Although auctions—in which sellers typically let buyers move first—differ from negotiations, they may be relevant to our examination of the first‐ versus second‐mover advantage. Were it always advantageous to make the first offer, we would expect all sellers to post their requests first and wait for buyers to outbid one another after being anchored by the sellers' first offers. However, millions of online and offline sellers prefer to sell through auctions, in which buyers commence the bidding process, suggesting that a second‐mover advantage may exist in some cases. Research in economics and game theory supports this notion (Gal‐Or 1985; Bester 1993) and describes some of the processes that yield higher final prices in auctions as compared to negotiations. Several of these processes are relevant to any context in which negotiators move second (Galinsky, Ku, and Mussweiler 2009), and some are specific to auctions (public revelation of offers, auction fever, etc.; see Wang 1993). For example, auctions lower entry barriers and consequently increase the number of bidders, giving the sellers more power (in the form of alternatives). Significantly, Ku, Galinsky, and Murnighan (2006) found no positive effect of first offers in auctions. Contrary to the “start high, end high” anchor effect in dyadic negotiations, lower starting prices in auctions led to higher final prices. Three processes contributed to this outcome: reduced barriers to entry, increased traffic, and escalated commitments due to lower starting prices. The traffic generated by lower starting prices also led bidders to infer higher item value. The authors' findings indicate that setting a high price in auctions backfired. This work highlights situations where starting prices may not serve as beneficial anchors, particularly in scenarios with numerous available alternatives, such as multiparty negotiations.

As noted above, a promising line of research has emerged in the past few years on the practitioner–researcher paradox related to first offers in negotiations. To illustrate the practitioner–researcher paradox, Loschelder et al. (2014) described the negotiation between Lacoste and tennis champion Andy Roddick. While Donald Dell, Roddick's agent, was discussing a three‐ to six‐year contract with Lacoste, the company demanded the inclusion of a clause allowing it to reduce the annual guarantee by 75 percent if Roddick dropped below 15 in the rankings. They did not know that Roddick had decided to retire from professional tennis if he dropped out of the top 15. Dell initially had planned on negotiating to reduce the size of the drop in annual guarantee and to revise the clause so that it would activate only when Roddick dropped below 25 in the rankings. However, Lacoste's offer led Dell to change direction, “reluctantly” agreeing to Lacoste's reduction clause, but in exchange for this “concession,” receiving a larger annual guarantee. By making the first offer, Lacoste revealed its preferences and gave Dell valuable information for negotiating a better deal by feigning a concession. In Dell's own words (Loschelder et al. 2014):

Maaravi and Levy (2017) illustrated the practitioner–researcher paradox using the Pawn Stars example mentioned above, wherein pawn shop owners start a negotiation by asking sellers how much they want for their items (e.g., Donahue et al. 2009). That is, much like Roddick's agent, they willingly forfeit the alleged first‐mover advantage, as they believe—likely based on their real‐world negotiation experience—that moving first is disadvantageous to them. Experts like the pawn shop owners believe that as they have more information than typical sellers, they are not likely to be anchored by sellers' first offers and can only benefit from not making the first offer themselves. If the seller's first offer is too high, they will not be anchored by it, as they can easily “consider the opposite” (Galinsky and Mussweiler 2001) by contemplating their own target before making their counteroffer. If the seller's first offer is lower than what they had planned to offer, they bargain downward to prevent the sellers from having counterfactual thoughts (i.e., “I could have done better,” as shown by Galinsky et al. 2002).

Following such real‐world negotiation examples and the literature on first‐offer disadvantages and second‐mover advantages in other domains, negotiation scholars have begun to doubt the general first‐mover advantage in both distributive (Maaravi and Levy 2017) and integrative (Loschelder et al. 2014) negotiations.¹

The following sections outline current knowledge regarding first‐ versus second‐mover advantage. The focus is on three crucial factors influencing any negotiation: information (both private and market information), power, and strategy.

Loschelder et al. (2014) demonstrated that in integrative negotiations, in which the sender revealed private information about compatible preferences that the recipient could take advantage of for their own benefit, making the first offer might backfire. This is precisely what happened in the above Lacoste‐Roddick example. In a more recent work by the same authors, they provide additional results that further support their hypotheses alongside a cognitive‐behavioral model (the Information‐Anchoring Model of First Offers) that predicts “when and why making the first offer helps versus hurts” (Loschelder et al. 2016: 995). According to their model, first offers have two effects. They serve as an anchor and influence the recipient in favor of the first mover; and they may convey information on the senders' priorities, rendering them vulnerable to exploitation, thus creating a first‐mover disadvantage.

The work by Loschelder et al. (2016) is important to our current argument for several reasons. First, their study is one of the first to address directly the first‐mover versus second‐mover advantage. Second, they provide a comprehensive model, the information‐anchoring model of first offers, which seeks to explain the conditions (focusing on information) under which making the first offer can either enhance or impair a negotiator's outcomes. The model sheds light on the dual effects of first offers, which act as anchors that pull final settlements toward the initial value while also conveying information about the sender's priorities, potentially leading to a first‐mover disadvantage. Finally, Loschelder et al. (2016) conducted three experiments to support their model, manipulating the information communicated in the first offers. When initiators withheld their priorities, the first‐mover advantage was observed. However, when first offers explicitly or implicitly revealed negotiators' priorities, a first‐mover disadvantage emerged. Moreover, the negotiators' social value orientation played a moderating role, with a first‐mover disadvantage occurring when initiators faced pro‐self counterparts who exploited priority information but not occurring with pro‐social recipients.

Additionally, Maaravi and Levy (2017) suggested a conceptual framework for market information with multiple combinations based on two main variables: information about the market value and information about the counterpart's knowledge of the market value. Based on these variables, a first‐mover disadvantage in distributive negotiations was demonstrated. It was suggested that in cases of information asymmetry between the negotiating parties regarding market prices, both parties should have moved second. For example, in one of the studies, participants played travelers on a business trip to a foreign country (Namibia) looking for a taxi at the airport. The businessperson had a 2‐h meeting and needed the taxi driver to wait until the end of the meeting. Participants were then randomly assigned to the businessperson or taxi driver roles, and the taxi drivers were given information about the hourly waiting rate of taxis in Namibia (US$ 1.50). Businesspeople making the first offer made significantly higher offers than did taxi drivers ($45 versus $14), which affected the final agreed‐upon prices: $49.50 when businesspeople made the first offer and only $11.40 when taxi drivers made the first offer. These findings show how, in situations of information asymmetry, negotiators may be better off making the second offer.

The current article builds upon such research (e.g., Loschelder et al. 2014, 2016; Maaravi and Levy 2017), and offers a more comprehensive model, encompassing two additional factors (beyond personal and market information) crucial to the ongoing debate surrounding first versus second offers, namely: power and strategy.

Another crucial factor beyond information is negotiating power. Research has shown that negotiators' alternatives, and more specifically, their BATNA (best alternative to a negotiated agreement), determine their power and consequently the negotiation process and outcome (Magee, Galinsky, and Gruenfeld 2007; Schweinsberg et al. 2012). The better the BATNA, the greater the power of negotiators, owing to their independence from a particular negotiation to achieve their goals. Negotiators with better alternatives make larger demands, have higher aspirations, and consequently reach more beneficial closing agreements than do negotiators with inferior or no alternatives (Thompson, Wang, and Gunia 2010). Indeed, repeated findings have indicated that negotiators are deeply influenced by their alternatives (e.g., Pinkley, Neale, and Bennett 1994; Wolfe and McGinn 2005; Magee et al. 2007; Schaerer et al. 2020), even alternatives that are merely possible (Pinkley et al. 2019).

Thus, whether or not there are alternatives, and the quality of any alternatives, are central to negotiation research (Schaerer, Swaab, and Galinsky 2015). For example, it was shown that merely thinking about one's own or one's counterparts' alternatives before making a first offer (Maaravi et al. 2011) or responding thereto (Galinsky and Mussweiler 2001) had a significant impact on first offers, counteroffers, and outcomes. Magee et al. (2007) showed that increasing negotiators' power—either through priming or the provision of alternatives—increased their propensity to move first in negotiations, and resulted in better outcomes due to the anchoring effect of first offers.

However, in certain power‐related situations, making the first offer might be disadvantageous. Imagine, for example, an artist who is currently negotiating with a gallery owner (A) over a painting that they recently completed. Before entering into negotiations with A, the artist received an offer from another gallery (B). If the artist makes the first offer, not knowing A's expectations, they might use B's offer as a reference point (or anchor) and adjust therefrom. If B offered, for example, $10,000 for the painting, then the artist—anchored by B's offer—might request $15,000 from A. But if A planned on offering $25,000, the artist will end up selling their painting for less than they could have, had they moved second. The same logic is apparent in Schaerer et al.'s (2015) research that showed how a lack of alternatives might be better than mediocre alternatives, as the latter anchors the initiators, thus causing them to make modest first offers. Based on such findings, we can expect weak alternatives to influence negotiators as much as strong ones. As detailed below, this line of reasoning is expanded to argue that it might be better to move second in such cases.

Recent results (Maaravi and Heller 2021) support the hypothesis that low‐power negotiators may be better off not making the first offer. In this research, negotiators' BATNA was manipulated and their anxiety levels were measured. Results showed that low‐power buyers who felt anxious made inferior first offers when facing more powerful sellers. When facing low‐power sellers, low‐power buyers made inferior first offers across all anxiety levels. This finding was further supported by additional research (Maaravi, Heller, and Levy 2023) that manipulated BATNAs for both sellers and buyers, and examined their effect on first offers. Results showed that low‐power negotiators would have received more favorable first offers than they would have made themselves when facing either low‐ or medium‐power counterparts.

However, there appears to be one crucial situation wherein even low‐power negotiators benefit from making the first move: when their counterparts have high negotiating power. One study found that negotiators with low power were better off making the first offer when their counterparts had high negotiating power in both single‐ and multi‐issue negotiations. Specifically, sellers with weak alternatives made higher first offers than their high‐power buyer counterparts; and buyers with weak alternatives made lower first offers than their high‐power seller counterparts (Gunia et al. 2013). This pattern also was demonstrated in Maaravi et al.'s (2023) research showing that low‐power negotiators were better off making the first offer if their counterparts had high power. Nonetheless, low‐power negotiators in these situations should still be cautious about making extreme or unreasonable first offers, as research suggests that their high‐power counterparts can walk away from the negotiation and choose their better alternative (Schweinsberg et al. 2012).

Finally, negotiation strategy may affect first‐ versus second‐mover advantage. While making the first offer to anchor one's counterpart is tactical (Maaravi et al. 2014), it is essential to understand this tactic in the more wholistic context of negotiators' strategies. Negotiation scholars have long analyzed the most prominent strategies that negotiators use (Shell 2006; Fisher, Ury, and Patton 2011). Shell (2006) proposed a “Situational Matrix” that can help negotiators match their strategy to a given situation. The matrix uses two factors: perceived importance of the parties' future relationship (high versus low) and perceived conflict over stakes (high versus low). Fisher et al. (2011) then matched the four strategies they suggest to this analysis:

• accommodation (soft), which emphasizes maintaining a pleasant atmosphere to protect and promote the relationship, even at the cost of the negotiation outcome;

• compromise (tit‐for‐tat), which views negotiations as an economic mechanism wherein parties are bargaining traders, and every step or concession made by one party is responded to with a counteroffer by the other;

• competition (tough/hardball), which describes tough negotiation and an uncompromising struggle to achieve the negotiator's goals, even at the expense of damaging the relationship with the other party; and

• problem‐solving (win‐win), which entails the potential for finding a creative and integrative solution.

The choice of a specific strategy may influence the dynamics and results of interactive situations such as negotiations. For example, research in game theory has shown that, in a repeated prisoner's dilemma game, starting “nice” (i.e., soft) and then using a tit‐for‐tat strategy wherein participants start out cooperating and then follow suit with their counterpart (i.e., cooperate if their counterpart cooperates, and act selfishly if their counterpart is selfish) led to the best outcomes (Axelrod and Hamilton 1981).

It can be hypothesized that negotiators who use the “soft” strategy would not make aggressive first offers (so as to maintain the relationship) and consequently might be economically better off moving second. Additionally, allowing one's counterpart to make the first offer could potentially improve the relational outcomes of the negotiation. Finally, it could also increase the chances that the negotiator's counterpart will adopt a more collaborative approach, as allowing one's counterpart to make the first move is a sign of trust (Lowenthal 1982). Thus, moving second could help negotiators interested in using a soft strategy to attain better outcomes by not making an inferior first offer, and by giving counterparts the sense that their success is a priority and the relationship with them is valued. This hypothesis appears to have support in multiple studies. One study compared numerous negotiation factors (e.g., first offer, outcome, relationship) of opposite‐sex dyads engaging in a negotiation simulation (Fry, Firestone, and Williams 1983). Notably, some dyads consisted of strangers, and others consisted of romantic couples. In their pursuit of maintaining a positive relationship, the study found that romantic couples had lower outcome aspirations, engaged in less frequent dominance tactics, and thus achieved worse outcomes. Specifically, couples made significantly lower (worse) first offers than did stranger dyads ($4,317 versus $4,987), which led to worse overall economic outcomes. Thus, in cases where the relationship with the negotiation counterpart is a priority, moving first can lead to results that are worse than one would obtain by moving second.

Recent research (Maaravi and Segal 2022) surrounding the practitioner–researcher paradox has focused on the effects of counterpart identity (friend versus stranger) and product value (low versus high). These factors affected strategy choice, initiation decisions, and the amounts of the first offer. Contrary to classic anchoring research conclusions and advice, results showed that negotiators using a soft strategy (either when facing a friend or when negotiating a low‐value product) preferred to move second. This decision was rational, as sellers made lower first offers than buyers, meaning both parties would have been better off not making the first offers.

We have attempted in this article to integrate the conflicting findings in negotiation research on the question of the first‐ versus second‐mover advantage in order to open novel avenues of research and provide the most accurate guidelines for practitioners. To this end, we focused on three of the most critical factors in negotiations: information (private and market), power, and strategy.

Based on the research exploring first offers in negotiations, we suggest that negotiators who take information, power, and strategy into account when deciding whether to move first will maximize the outcomes of their negotiations. More specifically, before making the first offer, a negotiator should consider the following:

1. Private information: Is my first offer providing my counterpart with crucial information about my preferences?

2. Market information: Is there an information asymmetry where one of the parties knows market prices better than the other?

3. Power: What alternatives do I have, and how do they fare in comparison with the current negotiation?

4. Relationships and negotiation strategy: What is the nature of my relationship with my counterpart, and what is my broader strategy?

Figure One summarizes these four factors—each of which corresponds to research discussed above—and the consequent initiation decisions.

Nonetheless, our model is not without limitations. Specifically, our model does not offer conclusive guidelines for cases in which negotiators lack information regarding their counterparts. First, once negotiators establish that their first offers can reveal their preferences, they need to know whether their counterpart is pro‐self or pro‐social. If they do not have this knowledge, it is unclear whether making the first offer will be beneficial or not. Second, to make an informed decision as to whether to move first or second, negotiators need to know the extent of their counterparts' market information and whether the negotiators' own information may be beneficial to their counterparts. Without these two pieces of information, the decision of whether to move first cannot be made with certainty. Finally, low‐power negotiators require knowledge of their counterparts' power (i.e., alternatives) before deciding whether or not to make the first offer. This raises the following concern: While it may be feasible to examine the negotiation approach of counterparts (whether pro‐self or pro‐social) by gathering evidence from mutual colleagues and acquaintances, uncovering counterparts' alternatives presents a much greater challenge. Consequently, this could be a significant limitation of the proposed model, unless future research identifies methods that negotiators can use to extract such information.

In addition to the utility of our framework in helping negotiation practitioners decide whether or not to make the first offer, it may also have implications for future research into the complexities of making first versus second offers. Building on the logic that we have laid out, it is now possible to design studies that account for how crucial interactions predict negotiation outcomes. For example, how do information and power asymmetries interact to affect the propensity to make the first offer, its magnitude, and its effect on negotiation outcomes? Research exploring additional aspects that influence negotiations can build on this framework to create an even more comprehensive understanding of the effect that offers have on negotiations. For example, future research can incorporate into our model factors such as gender and culture, which have been shown to interact with first‐offer determinants (Kray and Gelfand 2009; Gunia 2017). Moreover, the limitations of our framework point to the need for research into cases wherein negotiators have minimal knowledge regarding their counterparts' power, information, preferences, etc. Another promising avenue for future research may be the temporal dynamics of first‐ and second‐mover advantages in negotiations. Sinaceur et al. (2013) explored how the timing of first offers affects the creativity of negotiation agreements. In three experiments, they demonstrated that late first offers resulted in more creative agreements that better served the parties' underlying interests when compared to early first offers. They also found that the beneficial impact of late first offers was mediated by an increased exchange of information between the negotiating parties. Consequently, future research should combine our suggested model with Sinaceur et al.'s findings (2013) and explore the effects of early and late first versus second offers, controlling for negotiators' strategies, different types of information, and power in the form of alternatives.

Another possible line for future research may be around emotions. Past research has established that emotions play a significant role in negotiations, influencing decision making, perceptions, and behaviors (Van Kleef, De Dreu, and Manstead 2004). Specifically, research has pointed to the emotional aspects of moving first and has emphasized the role of anxiety (Brooks and Schweitzer 2011; Maaravi and Heller 2021). Exploring the interplay between emotions and the first‐mover versus second‐mover advantage could enhance our understanding of how emotional states impact negotiation outcomes. In addition, investigating the role of social cognition, such as trust and rapport, in the context of making and responding to offers could provide valuable insights into the psychological aspects of negotiation. Finally, expanding the research into different negotiation contexts and industries, including cross‐cultural settings, could help generalize the findings of the current framework. Since past research has shown that contextual factors such as culture and norms (Gunia, Brett, and Gelfand 2016) may impact negotiation dynamics and results, it is worth exploring the first versus second dilemma in international negotiations, high‐stakes business deals, and diplomatic negotiations, which could reveal contextual nuances that influence the effectiveness of different strategies.

By expanding the research in these various directions, scholars can broaden our understanding of the complexities involved in first‐ and second‐mover advantages in negotiations. These future research endeavors will not only deepen our knowledge in the field but also provide valuable practical insights for negotiators seeking to enhance their outcomes in different contexts.

The authors declare no potential conflicts of interest with respect to the research, authorship, or publication of this article.

This study was supported by the Israel Science Foundation grant 1916/19.