When Rumors Run Wild in Business Negotiation

New research shows how unfounded information can sabotage our negotiation skills.

By on / Negotiation Skills


Imagine that you are preparing to make an offer to an outside candidate for a position in your organization and engage in a negotiation over the details. A couple of days before your next meeting with him, a colleague mentions to you that she has heard some unsubstantiated rumors that the candidate can be quite difficult to work with.

Will you: A) ignore this information completely because it’s just a rumor, B) do some research to find out if the rumor is likely true, C) ask the candidate about the rumor directly, or D) believe the rumor and start looking for other candidates?

Build powerful negotiation skills and become a better dealmaker and leader. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.

Most of us would like to think that we would not choose (D)—simply accepting the rumor as fact and make decisions accordingly. A study by Dev K. Dalal (University of Connecticut), Dalia L. Diab (Xavier University), and R. Scott Tindale (Loyola University, Chicago) published in the International Journal of Selection and Assessment suggests that this is exactly what we would do—sabotaging our carefully honed negotiation skills in the process. To engage in truly integrative bargaining, where parties make value-creating tradeoffs, we need to improve how we look at rumors and rely on better negotiation strategies.

In an experiment conducted online, the researchers asked 400 currently and recently employed adults to imagine that they worked as a hiring manager who was considering a candidate, Aaron, for a middle-management position. The participants were asked to read a memo from the company’s head of HR that included information about Aaron and an evaluation form.

A section of the memo titled “Additional Notes” included positive information about Aaron, purportedly from a past client of his (specifically mentioning his kindness, diligence, and honesty) or negative information about him from the client (mentioning that he was rude and lacked attention to detail), depending on the condition. This information (positive or negative) was either presented as an unconfirmed rumor from an unidentified source or as fact, also depending on the condition.

The participants then were asked to rate Aaron according to his reliability, dedication and his likelihood of success. They were also asked whether they believed he should be hired.

The participants indicated that they were less likely to use information presented as a rumor in their decisions. And those who were presented with information in the form of a rumor indicated overall that they did not believe it. Nonetheless, participants failed to discount rumors from their decision making. Their judgments were affected primarily by whether the information about Aaron was positive or negative and not by whether it was presented as rumor or fact.

The somewhat alarming results suggest that a hidden factor could be working against us in our next job negotiation: potentially false information obtained by hiring managers. In their study, Dalal and colleagues note that rumors tend to run rampant in important situations where credible information is limited, such as a hiring negotiation. Hiring managers rarely take advantage of reliable information sources about candidates when forming their decisions, such as personal references, research shows. However, they are increasingly turning to the Internet and social media, where rumors propagate easily.

The results of the Dalal study are backed up by past research on source amnesia, or the tendency for people to have difficulty remembering where they acquired particular knowledge. We might easily remember vivid details of a given rumor, such as a characterization of someone as arrogant and lazy, yet forget the more mundane details of how we acquired the information.

This source amnesia can cause us to forget whether a statement is true. For example, a 2010 Time magazine poll revealed that 24% of Americans erroneously believe that President Barack Obama is a Muslim. Some of these people probably understood that this rumor was not true when they first heard it. Over time, however, the source of the statement may have faded away, turning the misinformation into a presumed fact.

Cumulatively, these negotiation concepts suggests three lessons to help you improve your negotiation skills, both for the typical job negotiation and beyond:

Focus on the positive. If you believe false rumors are being spread about you in your industry, directly rebutting them in a negotiation could backfire by making them more salient in your counterpart’s mind. For your message to take hold, focus more on spreading the truth than on disavowing the lie.
Remember the source. When you hear a rumor that’s pertinent to a negotiation you’re conducting, take note of the source. If it’s unverified, do the research required to determine if it’s true. If you know the rumor to be false, try to actively remember where you heard it so that you will recall not only the rumor but also the source’s unreliability after some time has passed.

Do the required legwork. In your next negotiation, don’t be a lazy researcher who relies only on Internet searches to find and verify data. Instead, keep your negotiation skills sharp and do the legwork required to make informed decisions, which may mean picking up the phone, conducting your own analyses, or seeking out published data.

Related Negotiation Skills Article: Emotional Intelligence as a Negotiating Skill and Negotiation Tactic

Build powerful negotiation skills and become a better dealmaker and leader. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.

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