Why Many Americans Avoid Negotiating Even When It Clearly Costs Them Money

Negotiation is often presented as a smart financial skill, something that helps people save money, earn higher salaries, or secure better deals. Yet new research shows that most Americans actively avoid negotiating, even when doing so would benefit them financially. In some cases, people are even willing to pay extra money just to avoid the negotiation process altogether.

This insight comes from a new academic study led by David Hunsaker, a clinical associate professor of management at the Indiana University Kelley School of Business Indianapolis, in collaboration with Hong Zhang of Leuphana University and Alice J. Lee of Cornell University. Their research, published in Negotiation and Conflict Management Research in 2025, takes a deep and data-driven look at how often people avoid negotiation, why they do it, and what it ultimately costs them.

Negotiation Avoidance Is the Norm, Not the Exception

One of the most striking findings from the research is just how common negotiation avoidance is. Across five large-scale experimental studies, researchers found that 95% of participants avoided negotiating at least some of the time. More specifically, people chose not to negotiate up to 51% of the time, even when they had a clear opportunity to do so.

This means avoiding negotiation is not unusual behavior or limited to people who dislike conflict. Instead, it is a widespread and predictable pattern across individuals and situations. Whether it is buying a car, negotiating a salary, or discussing prices for goods and services, many people simply opt out.

People Use Mental Thresholds to Decide Whether Negotiation Is “Worth It”

The researchers identified a key psychological concept driving this behavior called the Threshold for Negotiation Initiation (TFNI). This refers to the minimum amount of savings a person feels they must achieve before they are willing to negotiate.

What makes this particularly interesting is how people calculate this threshold. Rather than thinking in absolute dollar terms, people evaluate negotiation value based on percentage savings. For example, saving $500 may feel worthwhile on a $2,000 purchase but not on a $20,000 one, even though the dollar amount is the same.

On average, participants reported that they would only consider negotiating if the potential savings were between 21% and 36% of the total price. Anything below that range was often dismissed as not worth the effort, discomfort, or perceived risk of negotiating.

This finding highlights that negotiation decisions are driven less by logic and more by how people mentally frame value.

Many People Are Willing to Pay Extra to Avoid Negotiating

Another major concept introduced in the study is Willingness to Pay to Avoid Negotiation (WTP-AN). This measures how much additional money people are willing to spend just to skip the negotiation process entirely.

The results show that more than half of consumers are willing to pay higher prices if it means they do not have to negotiate. This helps explain why “no-haggle pricing” has become such a powerful selling point in industries like car sales.

According to the researchers, companies can often raise prices by 5% to 11%, and a majority of customers will still accept the deal simply because it removes the discomfort and uncertainty of negotiation. In other words, people are trading money for emotional comfort.

A Real-World Observation Sparked the Research

Interestingly, the idea for this research did not begin in a lab. It started during a negotiation conference in Israel, where bargaining is culturally expected, especially in markets. Despite being negotiation experts, Hunsaker and his colleagues noticed that none of them negotiated while shopping.

That moment led them to ask a simple but powerful question: If even trained negotiators avoid negotiating when given the chance, what does that say about everyday consumers?

From there, the research expanded into a systematic investigation of negotiation avoidance, combining behavioral experiments, surveys, and economic analysis.

Why People Avoid Negotiating in the First Place

The study suggests several reasons why negotiation avoidance is so common:

Emotional discomfort: Many people associate negotiation with conflict, awkwardness, or fear of rejection.
Uncertainty about outcomes: People often do not know whether negotiating will succeed, making the effort feel risky.
Social norms: If negotiating is not clearly expected in a situation, people are less likely to initiate it.
Mental effort: Negotiation requires preparation, confidence, and time, all of which feel costly.

These factors combine to create a strong internal resistance, even when the financial benefits are obvious.

Can Negotiation Avoidance Be Reduced?

The researchers also tested whether certain interventions could encourage people to negotiate more often. Two approaches were examined:

Utility comparisons, such as comparing the financial benefit of negotiating to one’s hourly wage.
Social norm prompts, where participants were told that negotiating is common and socially accepted.

The results were mixed. Utility comparisons had limited impact, but social norm messaging showed some success. When people believed that negotiation was normal behavior, they were more likely to engage.

This suggests that changing perceptions around negotiation may be more effective than focusing on numbers alone.

Why This Research Matters for Careers and Consumers

Negotiation avoidance has serious implications beyond everyday purchases. In professional settings, avoiding negotiation can affect salary growth, promotions, job offers, and long-term career earnings. Small missed opportunities can compound over time, leading to significant financial differences.

Hunsaker emphasizes that while negotiation aversion is real, negotiation skills still matter at critical moments in life. Becoming aware of these psychological tendencies is the first step toward overcoming them.

Practical Negotiation Advice from the Research

While the study is focused on understanding behavior rather than teaching techniques, Hunsaker shared several practical insights:

Preparation matters most: Understanding your alternatives and leverage before negotiating increases confidence.
Leave room for concessions: Starting with a higher initial offer creates flexibility and satisfaction for both sides.
Focus on relationships, not winning: Successful negotiation is about trust and long-term outcomes, not short-term victories.

These principles align with decades of negotiation research and reinforce the idea that negotiation does not have to be aggressive or adversarial.

A Broader Look at Negotiation Behavior

Outside this study, negotiation avoidance has been linked to cultural expectations, workplace norms, and even early socialization. Some people are taught that negotiating is rude or risky, while others grow up in environments where bargaining is routine.

The rise of fixed pricing, online shopping, and automated transactions may also be reinforcing negotiation avoidance by making non-negotiated interactions the default.

Final Thoughts

This research makes one thing clear: avoiding negotiation is a common human behavior, not a personal flaw. However, understanding why we avoid it—and what it costs us—can help individuals make more informed decisions.

Negotiation may feel uncomfortable, but as this study shows, the price of avoiding it is often higher than we realize.

Research paper:
https://doi.org/10.34891/yv27-1416