Give Away Information?

If negotiations are games of information, then surely information is a precious resource -- to be shared only with the expectation of getting something equally valuable in return?  Not necessarily.  Consider the results of an (informal) study with a Harvard MBA class.  Students were paired off to play one of two roles in a complex negotiation (let's call them buyer and seller just to keep it simple).  Each was provided with confidential information about how they valued a range of potential options and also what their reservation value was.

Half of the buyers were, unbeknownst to the sellers, given the seller's confidential information.  Not only did they know exactly how much the sellers cared about each issue on the table, they also knew exactly what the seller's BATNA and reservation price was.

As the professor expected, the buyers in possession of confidential information did much better than the buyers without it -- but the sellers paired with those buyers also did better than the sellers whose secret information was actually secret!

The dominant factor, as it turned out, was not superior ability to claim value but to create it.  The pairings where the buyers had perfect information were much more effective at identifying value-creating tradeoffs. The overall result was that even though the advantaged buyers had a clear edge in value capture they were dividing a much larger pie, so their counterparts did well by comparison.

I've seen this same effect in real-world negotiations.  Opportunities to create value are easily missed because a reasonable (but false) assumption by one side isn't given voice and thus isn't corrected.  Great negotiators know that failing to find and realize value-creation opportunities is no different than throwing money in the paper shredder.

Sharing information should be strategic.  You should use it to build trust, to gain information in return and to help control the framing of the negotiation.  But don't hoard it.  In a healthy negotiation, sharing information can easily result in gains for both sides.