The current US president, Trump, has been talking about his “great negotiation” skills over and over again; and the strategy that he talks the most frequently is being uncertain and upredictable. There have been many people talking about negotiation skills, and one strategy is to mislead their opponents on the negotiation table and even provide wrong information. However, being dishonest I think is the worst strategy on the negotiation table in the long term.
Once the strategy of being dishonest is used, others will acknowledge that this player is a dishonest player and in the future, other opponents would filter or even ignore the information provided and the information asymmetry will become even worse. According to economics, when the situation of information asymmetry becomes worse, the aggregate benefits will be lower. Therefore, when making information more transparent, it is more likely to make mutual benefits greater. Of course, this strategy does not necessarily generate higher private benefits than providing misleading information; however, it is more likely to provide stable and higher benefit over the long run, especially when the credibility is generally realised by the entire market, the cost of negotiation will become lower and the two parties of the negotiation will become easier.
To conclude, being honest can lower the systematic cost for negotiation and also increase the aggregate benefits.
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