Cynicism in Negotiation: When Communication Increases Buyers’ Skepticism

Abstract

This paper investigates whether certain contexts can lead buyers to be too skeptical and miss beneficial opportunities. We focus on a seller-buyer interaction in which the buyer has limited knowledge about the seller’s offer. The offer is abstracted as two cards, drawn randomly from a deck of 100 cards that are marked consecutively from 1-100. The buyer is presented with the lower card (and knows that she sees the lower card) and must decide whether to buy the cards at a price of 100. The product’s value is abstracted by the cards’ sum, so normative buyers should buy whenever the presented (lower) card exceeds 33. Two studies compare potential context effects on the decision to buy when the lower card equals 40. Study 1 shows that most buyers accept offers from computer sellers, but acceptance rate drops significantly when offers are made by human sellers who communicate with buyers. Study 2 clarifies this effect by showing that restricting human sellers from communicating with buyers increases buying rate, to the extent that human become as successful as computers in selling their product. Together, the results suggest that the mere context of persuasion increases buyers’ attention to sellers’ motives, and consequently increases buyers’ skepticism. Interestingly, sellers do not appreciate this effect: they prefer to have the opportunity to persuade buyers and believe that it would increase their likelihood to sell, although such attempts might actually have detrimental effect on their sales.