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Giving a candidate the impression that there are many other (serious) candidates for a position has some clear benefits for an employer:

  • It gives the employer a better position when negotiating salary and other benefits.

  • It increases the pressure on the successful candidate to accept the job offer.

Therefore, if during the recruiting process I am given to understand that I am the only serious candidate for the job, this is likely to be true. While I would usually assume assume no bad intentions, I may make strategical decisions based on this information. Therefore it is valuable for me to know whether my assessment that there is no reason to bluff about this (leading to my disadvantage) is true. Note that I am asking for potential, general motivations, and I am well aware that I have to be the judge whether they apply to my particular situation.

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    Most probably your possible employer is just being honest. He could also be trying to make you feel more important, but I doubt that. I consider this is somewhat opinion based and hard to know why your employee is doing that.
    – DarkCygnus ♦
    Jul 27, 2017 at 16:48
  • @GrayCygnus: I do not expect you to read my potential employer’s mind. I am asking for potential motivations in general and I am well aware that I have to be the judge whether I consider them relevant for my particular situation.
    – Wrzlprmft
    Jul 27, 2017 at 16:56
  • I'm inclined to agree that they're probably being honest. That said, if we're going to assume they're lying as an exercise, it could be that they think you're a great technical fit and your expected salary quotes are way too low, so they want do what they can (short of offering you more money) to encourage you to stay. Of course, if they ARE being honest and your quotes ARE NOT too low, and you try to push for more money due to reasoning like this, you may end up blowing a really good job offer in the process.
    – Steve-O
    Jul 28, 2017 at 13:55

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Interviews are already stressful.

Knowing (for certain) that you're competing with many others for the same position can increase the amount of stress ten-fold and lead to significantly worse performance during the interview.

In theory they could also be lying to you to see whether you'd try to take advantage of knowing this, but this seems highly unlikely (unless perhaps negotiating is an extremely important part of the job).

Most of these pros and cons are theoretical though:

  • One would generally assume (and hopefully have accepted that) there are other candidates, so it shouldn't affect your stress level much one way or the other
  • You just can't know for sure whether they're considering extending the offer to any other candidate instead, even if they are interviewing many others
  • There is generally some, but not an extreme, amount of pressure to (quickly?) accept the job offer, no matter how many other candidates there are
  • Few people strictly (or even vaguely) adhere to the optimal negotiating strategies - sometimes people are just honest and/or they think telling you won't really make a difference
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It could mean:

You're the only credible candidate so far and we'd like to take a bit more time before deciding in order to find a few other credible alternatives to compare you with.

But usually, it means you really are the only credible person they've interviewed and they're excited:

You've got the job. But pretty please, much as we love you, please don't spoil it with outsized salary expectations.

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