Optimizing Counteroffers: How Timing and Magnitude Shape Sale Prices and Impasses in 26 Million Asynchronous Online Negotiations

Buyers often face a vexing decision regarding when and how ambitiously to counter a seller’s first offer. Drawing on over 26 million real-world, asynchronous, electronically mediated negotiations (Study 1) and a controlled experiment (Study 2), we examined how the timing (early vs. late) and magnitude (ambitious vs. accommodating) of buyers’ counteroffers affect negotiation outcomes—specifically, final sale price and impasse risk. In Study 1, more ambitious counteroffers were associated with lower (i.e., more favorable) final prices for buyers, yet also increased the risk of impasse. Notably, we also uncovered a novel timing effect: late counteroffers led to more favorable final prices and reduced impasse risk. Study 2 (N = 213) provided causal evidence in a controlled experiment, demonstrating that both ambitious (vs. accommodating) and late (vs. early) counteroffers benefit buyers in asynchronous, electronically-mediated negotiations. Taken together, these findings underscore the importance of counteroffer timing and assertiveness in an increasingly common yet understudied context in negotiation research.