Bargaining in distribution channels

This study empirically assesses the impact two fundamental dimensions of distribution channels have on channel member bargaining behavior, namely, (1) the expected duration of the channel bargaining relationship and (2) the channel member dependence on the bargaining. The following findings were observed from a laboratory study using 160 business students: low dependence produced fewer bargaining sessions ending in agreement compared to high dependence among buyer-seller dyads. Low dependence bargainers made more extreme initial offers, conceded less, and used the pronoun we less than did high dependence bargainers. The sellers emerged better off than the buyers from the negotiations. Sellers achieved this advantage by making more extreme initial offers than buyers, conceding more than buyers, but emerging with the better deal.     

Simulated Negotiations in the Hiring of a Salesforce Manager: Tests of Two-Person Bargaining Solutions

This paper examines the ability to predict bargaining outcomes consistent with Nash, Kalai-Smorodinsky, and Gupta-Livne bargaining models as well as two heuristic solutions based on interpersonal (cardinal) comparisons of utility. Equal earning and equal loss solutions are developed from bargainers' multi-attribute utility functions. An experimental test of these bargaining solutions is conducted for simulated negotiations between a representative of sales force management and a representative of sales force employees over the hire of a regional sales manager. Results show that proportional (Kalai-Smorodinsky) solutions are generally more likely when bargaining is conducted in attribute space, and equal loss solutions are more likely in utility space.     

The impact of expectation of future negotiation interaction on bargaining processes and outcomes

This research conceptualizes and experimentally tests differences in pre-negotiation behavioral influences, negotiation processes, negotiation outcomes, and post-negotiation dispositions involving buyers and sellers negotiating under the expectation of future negotiation interaction (EFNI) versus no expectation of future interaction (Non-EFI). EFNI bargainers have lower aspiration levels, expect the negotiations will be friendlier, and predominantly use a problem-solving bargaining style compared to Non-EFI bargainers. Perforce, EFNI appears to have a strong moderating effect on satisfaction as Non-EFI bargainers' satisfaction is strongly predicated on their monetary outcomes (expectation-disconfirmation paradigm), while EFNI bargainers' satisfaction is not. Further, while EFNI negotiations take longer than Non-EFI negotiations, they also produce greater parity between buyers' and sellers' satisfaction, which leads to fewer bargainers being dissatisfied. Thus, compared to one-time negotiations, bargainers in EFNI contexts are more likely to be disposed to bargain again, to enter into negotiations with a harmonious disposition and seek solutions that benefit both parties.     

What matters in a price negotiation: Evidence from the U.S. auto retailing industry

While there is a great deal of theoretical and experimental literature on what factors affect bargaining outcomes, there is little empirical work based on data from real markets. In this paper we analyze negotiations for new cars, a $340 billion industry in the United States in 2010. Our results suggest that search costs, incomplete information, and bargaining disutility have an economically significant effect in real-world negotiations: we estimate that relative to an uninformed consumer, a consumer with basic information about the seller’s reservation price and his own outside options captures 15% of the average dealer margin from selling an automobile. We also find that a buyer’s search cost and bargaining disutility have significant effects on bargaining outcomes. Finally, our results show that while search is common, there remains a substantial group of consumers who do not engage in any of the search behaviors we measure. We hypothesize that these buyers are not aware of how easy and effective certain activities in improving negotiation outcomes can be.     

Initiating Negotiations: The Role of Machiavellianism, Risk Propensity, and Bargaining Power

Initiation is an often-overlooked yet essential stage of the negotiation process. This study examined the effects of two measures of personality—Machiavellianism and risk propensity—and relative bargaining power (as based on multiple situational factors) on three phases of the initiation process—engaging a counterpart, making a request, and optimizing the request. Using a multi-scenario approach, one hundred fifteen participants indicated their initiation preferences for three distinct negotiations. The results of repeated measures ANOVAs indicate that bargaining power influences an individual’s decision to initiate negotiations. In addition, those high in Machiavellianism choose to initiate negotiations even when relative bargaining power is low, whereas those high in risk propensity tend to optimize their requests. The implications of these findings for practitioners and future research are discussed.     

供应商与制造商间的议价博弈分析

本文以供应商与制造商间的合作关系为研究对象,利用轮流出价的议价博弈模型,分析了供应商与制造商间在谈判中的议价策略,为供应商和制造商在报价竞争中提供可操作的决策支持,确保供应商和制造商双方的利益,从而形成巩固的合作伙伴关系.     

Are EC-Japan-US Trade relations at the crossroads?

The Uruguay Round negotiations are currently passing through a critical phase after four years of strenuous bargaining. The ultimate success of the negotiations largely depends on the attitudes of the USA, the EC and Japan. What are the main contentious issues between these three and how are their trade relations likely to develop in future?     

Trade interdependence, the international financial institutions, and the recent evolution of sovereign-debt renegotiations

This paper analyzes the effect of a debtor country’s pattern of trade with commercial creditors’ home countries on the outcome of debt-rescheduling negotiations. The analysis reveals that a debtor country with more market power has greater leverage in a three-way debt-rescheduling negotiation that includes the debtor country, its creditors and the International Financial Institutions (IFIs). The paper also considers the effects of the IFI sovereign-debt policy on the bargaining power of the parties in debt-rescheduling negotiations. Two bargaining frameworks analyzed and compared in the paper represent the negotiation mechanism at different stages of the IFI sovereign-debt policy evolution.     

Design and Implementation of Business Objects for Automated Business Negotiations

In recent years, there has been increasing interest in the specification, generation and exchange of business objects in the context of electronic commerce. Common business objects have been defined for product catalogs, purchase orders and other business entities. However, no business objects have been defined and implemented for supporting automated business negotiations even though business negotiation is very much an integral part of business activities. In this work, we have designed and implemented a set of business negotiation objects for supporting the bargaining type of business negotiations. These objects define the operations and information contents needed for negotiation parties to express their requirements and constraints during a bargaining process. They correspond to a set of negotiation primitives, which is a superset of the negotiation-related primitives defined in two popular languages: ACL and COOL. The implementation of these objects is patterned after the business object documents in the XML format proposed by the Open Applications Group, thus conforming to the established standard. The incorporation of several types of constraint specifications in these business negotiation objects provides the negotiation parties and the negotiation servers that represent them much expressive power in specifying callforproposals and proposals. Two synchronization problems and their solutions associated with the withdrawal and modification of negotiation proposals are addressed and presented in this paper. The use of these business negotiation objects in a bilateral bargaining protocol is also presented. We have validated the utility of these objects in an integrated network environment, which consists of two replicated negotiation servers, two commercial products, and some other university research systems that form a supply chain.     

Multi-Party Negotiation When Agents Have Subjective Estimates of Bargaining Powers

This paper presents a method for generating Pareto-optimal solutions in multi-party negotiations. In this iterative method, decision makers (DMs) formulate proposals that yield a minimum payoff to their opponents. Each proposal belongs to the efficient frontier, DMs try to adjust to a common one. In this setting, each DM is supposed to have a given bargaining power. More precisely each DM is supposed to have a subjective estimate of the power of the different parties. We study the convergence of the method, and provide examples where there is no possible agreement resulting from it.     

A Classification of Bargaining Steps and their Impact on Negotiation Outcomes

In this paper, we develop a typology of bargaining steps for multi-issue negotiations, which is derived from possible changes in single issues. By considering all combinations of such changes, we create a consistent classification of steps. This classification forms the basis of an empirical analysis of the impact of different types of bargaining steps on various outcome dimensions of negotiations. We perform an exploratory analysis based on an ex-post analysis of existing negotiation data, which was collected over several years using an Internet-based negotiation support system. Empirical results indicate a strong positive impact of log-rolling strategies and a negative impact of “hard” tactics like insistence on the chances of reaching an agreement. Contrary to expectations, hard tactics do not improve the efficiency of agreements.     

How Does “3-D Negotiation” Move Beyond in a Dimension of a Win–Win–Win Approach for Integrated Bargaining Solution Analysis of Vertical Cooperative Advertising Campaigns?

The research aim of this study was to examine the possibility to investigate win–win–win Spais-Papakonstantinidis model in order to develop an integrated bargaining solution analysis for vertical advertising campaigns under the prism of the “3-D Negotiation.” First, the author provided some summary points of the critical case of Proctor & Gamble (P&G) and Wal-Mart. Second, the utility functions were extended based on author's previous works and the findings of the critical case study. The author considered a simplified situation where a brand manufacturer and an independent retailer are renegotiating, assuming that the negotiations occur in an incomplete and asymmetric information environment.     

Opening the Black Box: Power in Buyout Negotiations and the Moderating Role of Private Equity Specialization

The management buyout is an important exit strategy for small business owners. Negotiations of buyout deals have received little research attention to date. This is surprising given buyout negotiations' complexity giving rise to multiple issues that require consideration and often conflicting interests of deal parties. This paper examines perceived bargaining power in buyout negotiations between private equity (PE) firms and current owners who sell their business. We identify competition, expertise, and time pressure as key antecedents of PE firms’ perceived bargaining power and examine the moderating effect of PE firms' industry and size specialization in buyout negotiations. We use a sample of 176 respondents who each report on a particular buyout deal for a PE firm. The majority of respondents are seasoned PE professionals who held managing director or investment director positions.     

Backward stealing and forward manipulation in the WTO

Motivated by the structure of WTO negotiations, we analyze a bargaining environment in which negotiations proceed bilaterally and sequentially under the most-favored-nation (MFN) principle. We identify backward-stealing and forward-manipulation problems that arise when governments bargain under the MFN principle in a sequential fashion. We show that these problems impede governments from achieving the multilateral efficiency frontier unless further rules of negotiation are imposed. We identify the WTO nullification-or-impairment and renegotiation provisions and its reciprocity norm as rules that are capable of providing solutions to these problems. In this way, we suggest that WTO rules can facilitate the negotiation of efficient multilateral trade agreements in a world in which the addition of new and economically significant countries to the world trading system is an ongoing process.     

Negotiating with the Chinese: Are They More Likely to Use Unethical Strategies?

It is always a challenge to deal with ethical dilemmas in negotiations and it is even more difficult when the other party is from a different culture. Understanding the differences between what is ethically appropriate and what is not in an international context has thus become important for a better understanding of different negotiation practices across the globe. This study explores the likelihood of Chinese negotiators’ using unethical strategies in negotiations by examining Chinese managerial employees’ perceived appropriateness of five categories of ethically questionable strategies. The results show that, in comparison with their counterparts from the USA, Chinese managers are more likely to consider it appropriate to use ethically questionable negotiation strategies in all five categories except the traditional bargaining strategies. In addition, contrary to the West where women tend to maintain higher ethical standards, no gender difference is found in China in the perceived appropriateness of using these strategies in all but one category. Implications for negotiation practitioners and international managers that often participate in international negotiations with the Chinese are then discussed, along with potential future research directions.     

Cost-based pricing: Behavioral aspects of price decisions for capital goods

Some empirical research is reported upon the question, whether the type of cost calculation has a significant influence on suppliers' price decisions in capital goods markets. Experimental findings indicate that highly aggregated cost information (full cost accounting) effects ceteris paribus higher offering prices than disaggregated cost information (complete transparency of cost structure). A complex causal model of price decisions in this field is developed which is capable of giving further insights into the empirical effects of psychological variables in the price decision process.     

Dimensions of International Negotiation: A Test of Iklé's Typology

Results from statistical analyses of 30 cases of international negotiations supported Iklé's typology of negotiating objectives. The cases, sampled from the collection of Pew Case Studies in International Affairs, were distinguished in terms of five objectives: innovation, redistribution, extension, normalization, and side effects. In addition, a sixth objective was identified: negotiations concerning the creation of multilateral regimes. These cases focused on issues that surfaced on the international agenda during the 1980s. Each type had a relatively distinct profile based on such aspects of negotiation as the number of parties and issues, bargaining strategies, media exposure, stability of the process, and types of outcomes. The methodology contributes to the state-of-the art in comparative analysis and the results have implications for the development of middle-range theories of negotiation. They also contribute to practice, by enabling negotiators to evaluate future cases in terms of knowledge about past cases.     

Negotiating Effectively: Justice in International Environmental Negotiations

Are negotiators who rely on justice principles in the process of bargaining and drafting agreements more—or rather less—effective than others? This article examines whether adherence to principles of procedural and distributive justice in negotiations contributes to more effective results, with a focus on international environmental negotiations. Effectiveness is defined in terms of the extent of agreement (among parties and on issues), time to reach agreement, and comprehensiveness of the agreement. A set of hypotheses is evaluated on a selection of bilateral and multilateral cases of environmental negotiations, using statistical methods. The analyses reveal that adherence to principles of procedural justice contributes to more effective results in multilateral environmental negotiations. These principles are found to hinder effectiveness in the bilateral cases. On the other hand, adherence to principles of distributive justice is only moderately related to effectiveness in both the bilateral and multilateral cases.     

Concessions Dynamics in Electronic Negotiations: A Cross-Lagged Regression Analysis

We analyze concession patterns in electronic negotiations using a modified version of the Actor–Partner Interdependence Model (APIM). Our extension of the APIM takes into account that concessions in negotiations can only be evaluated in terms of utilities of the receiving side. We show that actor and partner effects in that model can directly be related to central concepts of negotiation theory such as cooperative versus distributive bargaining tactics and reciprocity. Based on this connection, we formulate hypotheses on the differences of actor and partner effects between successful and failed negotiations. We test these hypotheses on two existing data sets. Results show consistent and strong actor effects, while partner effects are only present in specific settings.     

The Montreal Taxonomy for Electronic Negotiations

Research in the domain of electronic negotiations is a rather new and very interdisciplinary field, which gains more and more attention due to the industry hype and momentum regarding electronic commerce and electronic markets. Negotiations in a narrow sense (not taking into account simple forms such as hit and take) have been identified as an advantageous coordination mechanism for the interaction of buyers and sellers in electronic markets that transcend the selling of commodities or uniform goods. Hence, support for negotiations may become a critical success factor for electronic markets, especially regarding the recent failures of many industrial ventures. This paper presents the Montreal Taxonomy, which allows not only for the exact characterisation and comparison of a broad variety of electronic negotiation designs and systems, ranging from auctions to bilateral bargaining tables, but could also lead towards a more structured approach for the design of electronic negotiations.