An article by Dr. Yossi Maaravi and his colleagues under the title:
To Bid or Not to Bid? That is the Question! First‐Versus Second‐Mover Advantage in Negotiations
Cite article
Maaravi, Y., Levy, A., & Heller, B. (2023). To Bid or Not to Bid? That is the Question! First‐Versus Second‐Mover Advantage in Negotiations. Negotiation Journal.
Following the publication of the article, we talked with Dr.Yossi Maaravi about the article's research question, process and its results:
"In my research over the past two decades, I have delved into the complexities of negotiation dynamics, and in particular have challenged the established concept of first-offer advantage. The negotiation literature has long emphasized the first-offer advantage by setting the initial anchor, influencing counteroffers and settlement prices. the final ones
However, when my team, Aharon Levy, Ben Heller and I, dived into this field, we encountered what we know as the "paradox of the practitioner versus the researcher". It is interesting to note that while researchers advocated the advantage of the first proposal, industry insiders and negotiation experts seem to emphasize the advantages of the second proposal - a perspective that until recently has been largely ignored.
Dr. Yossi Maaravi, the research leader
Our solution to this paradox revolves around three key factors: information, power and strategy. These elements, which are fundamental both in negotiation research and in practical application, shed light on the relevant conditions in which it is better to be first or second.
This research has crucial implications for negotiation researchers, business people and managers alike. The complex interplay of these factors provides a more sophisticated understanding of when to anchor and when to wait strategically, ultimately influencing the outcome of negotiations. It's about embracing the complexity of the negotiation dynamics and offering a more precise approach that aligns with the reality at the negotiating table."
Abstract
For the past two decades, negotiation research has established a first-mover advantage based on the anchoring and adjustment heuristic. Negotiation scholars have argued that first offers serve as anchors that affect both counteroffers and settlement prices. Consequently, management education—including negotiation articles, books, courses, and seminars—often recommends that negotiators move first to “anchor” their counterparts. Nonetheless, a growing body of recent research contradicts this general advice and points to a second-mover advantage in specific cases. Interestingly, this contradiction was termed the “practitioner-researcher paradox,” as practitioners and negotiation experts appeared to understand the benefits of moving second in negotiations, which scholars—up until recently—generally have overlooked. The current article offers a solution to this paradox by proposing three key factors that might explain the conditions and circumstances of first- versus second-mover advantage in negotiations. These three factors are central in negotiation research and practice: information, power, and strategy. Given the centrality of first offers in negotiations, the solution to this paradox is crucial for negotiation scholars, businesspeople, managers, and anyone else who finds themselves in a negotiation.
