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

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.