OVERCONFIDENCE IN NEGOTIATION REVISITED

The individual and joint effects of overconfidence and aspirations on negotiator performance were examined. Past research has suggested that negotiator overconfidence impedes effective dispute resolution. It is argued here, however, that overconfidence may not impair negotiator performance in all situations and may actually be beneficial in some. Specifically, the dual concern model offers a framework for predicting negotiator outcomes as a function of overconfidence and aspiration difficulty. Face‐to‐face buyer‐seller negotiations were conducted between different combinations of over‐ and realistically‐confident negotiators. Hypotheses involving the impact of overconfidence and aspiration difficulty on the key constructs of the dual concern model were supported Predictions involving their subsequent effects on negotiator performance, however, were not supported, although this lack of support appeared to stem from unresponsiveness on the part of sellers only. Even though overconfident negotiators fared no worse than realistically confident negotiators regardless of aspiration difficulty or the appropriateness of their opponent's confidence, they did not fare any better either. A variety of theoretical and practical implications of the results are discussed.