Too much information: the perils of nondiagnostic information in negotiations

Two studies showed that possessing information about a negotiation counterpart that is irrelevant to the negotiation task can impair negotiators' effectiveness because such knowledge impedes effective information exchange. In Study 1, negotiators who possessed diagnostic and nondiagnostic forms of information were each less likely to exchange information about their preferences within the negotiation. However, only those negotiators who possessed nondiagnostic information achieved inferior negotiation outcomes as a result. In Study 2, negotiators possessing nondiagnostic information about their counterparts in electronically mediated negotiations were more likely to terminate the search for mutually beneficial outcomes prematurely and declare impasses. They were also less able to use diagnostic forms of information to make mutually beneficial trade-offs. As a result, negotiators in these dyads achieved inferior outcomes.