First, I distinguish two different sorts of time pressure. The first type of time pressure is a final deadline, which results from a fixed time limit beyond which agreement is no longer possible. Inflexible schedules like terms of political office, budgetary calendars, or timed explosives can impose final deadlines on negotiations. The second type, shrinking pie time pressure, grows from penalties negotiators pay for continued negotiation. The costs of delay include the opportunity costs of the negotiators time, but it may also include costs of bargaining agents such as attorneys or forgone income such as in strikes and work stoppages.
Most negotiations have some form of shrinking pie time pressure.
In two controlled laboratory experiments for which data collection has been completed, I find that shrinking pie time pressure tends to be a liability, and revelation to the opponent only increases this liability. Final deadlines, on the other hand, can be beneficial. I find that revelation of a final deadline benefits the pressured party. Furthermore, short final deadlines can ameliorate the negative consequences of heavy shrinking pie time penalties. The key insight necessary to understand these results is the fact that one negotiator's final deadline is the other's final deadline, as long as the other cannot continue negotiating alone.