Can you be confident that the confident negotiator is trustworthy or should you take that person’s statements with a grain of salt? Well, if you’re in negotiations, you should take everything the other party has to say, and counter-offer, with a grain of salt.  As President Reagan is famous for saying, trust but verify.  Psychology and negotiations are hard to separate. Studies have shown the more confident a person’s statement sounds, the more likely the listener will trust it.  This is good or bad, depending on which end of the statement you’re on.

According to a blog on, a study at Washington State University involved predictions of outcomes of college football games.  Study subjects, by a three to one margin, put more trust in those who made those predictions using strong language indicating firm confidence in those predictions, over those using less strong language but whose actual record of past correct predictions was better.

Another example is Jim Cramer, a former Wall Street executive who hosts a program on CNBC, Mad Money, in which he gives financial advice.  On the show, Cramer looks, acts and sounds like a Wall Street executive who’s put in too many hours fueled with too much coffee.  Cramer is a man of strong opinions, which he punctuates with an arsenal of sound effects.  There’s no mystery as to where he stands on a stock or an investment.  He tells viewers they need to sell this stock, or to buy that stock, rarely with any sign of doubt. He has enough followers to maintain his TV show and buy his books.

That doesn’t mean he knows what he’s talking about.  For example, a week before the investment bank Bear Stearns went into bankruptcy, he called fears about its financial shape as “silly.” One study by a group of doctoral students at Northwestern University’s Kellogg School of Business found that Cramer’s stock picks are good ideas initially, but they generally quickly lose their value.

If you are on one end of the negotiation, in which the other party shows confidence by using strong language in some kind of future outcome or describes something in absolute terms, don’t fall into the trap that many of us are predisposed to fall.  Get assurances in writing.  Get documents and evidence that substantiate those positions or opinions.  Include language in an agreement that will protect you in case the other party’s apparent confidence doesn’t survive the light of day. For example, if you’re involved in a business negotiation, and the other business insists they’re on a rock solid financial foundation, or they’ve got an upcoming product or service that will dominate their market, thank them for their opinion.  Then get as many documented facts and figures as you can to protect yourself.

When negotiating, always tell the truth and be honest.  Negotiating in bad faith can land you in court if an agreement goes sour because of untruths.  It can also do serious damage to your reputation.  But, if there are issues involved in the negotiations in which you can honestly, and in good faith, use language showing your strong confidence in your statement, it may sway the other side.

When you negotiate, be as confident as you can in your positions, and be skeptical of the other party’s confidence.  True, justified confidence is a good thing.  Misplaced confidence can be very bad.