Competition,Transparency, and Reciprocity: A Comparative Study of Auctions and Negotiations

The paper discusses experiments aimed at comparing multi-attribute reverse auctions and multi-bilateral negotiations for procuring goods with multiple attributes. Both exchange mechanisms involve a buyer purchasing from one of several sellers. Two types of negotiations are considered: verifiable and non-verifiable. They differ in the sellers’ knowledge of the current best offer on the table; in verifiable negotiations the best offer is automatically shown to every participant, which makes it similar to auctions. Online auctions and negotiation systems were used to study auction and negotiation processes, and the mechanisms’ efficiency. The results show that buyers did best using auctions, followed by non-verifiable and verifiable negotiations. We also looked into the differences between auctions and negotiations in terms of their duration, sellers’ and buyers’ involvement, and efficiency and conclude that the behavior of buyers and sellers cannot be explained solely on the grounds of traditional economics. It can, however, be explained on the grounds of social exchange theory and behavioral economics. In multi-bilateral negotiations competition and social behavior coexist. When transparency is introduced the social effect becomes stronger, weakening the impact of competition.     

Towards a Structured Design of Electronic Negotiations

Global communication networks and advances in information technology enable the design of information systems facilitating effective formulation and efficient resolution of negotiation problems. Increasingly, these systems guide negotiators in clarifying the relevant issues, provide media for offer formulation and exchange, and help in achieving an agreement. In practice, the task of analysing, modelling, designing and implementing electronic negotiation media demands a systematic, traceable and reproducible approach. An engineering approach to media specification and construction has these characteristics. In this paper, we provide a rationale for the engineering approach that allows pragmatic adoption of economic and social sciences perspectives on negotiated decisions for the purpose of supporting and undertaking electronic negotiations. Similarities and differences of different theories that underlie on-going studies of electronic negotiations are identified. This provides a basis for integration of different theories and approaches for the specific purpose of the design of effective electronic negotiations. Drawing on diverse streams of literature in different fields such as economics, management, computer, and behavioural sciences, we present an example of an integration of three significant streams of theoretical and applied research involving negotiations, traditional auctions and on-line auctions.     

An Experimental Investigation of Virtual Negotiations with Dynamic Plots

Advanced information and communications technologies provide the basis for virtual negotiations where competitors continuously alter their assignments in real-time in response to market changes. Dynamic plots, which depict the competitors' possible profits and hints for how to improve them, provide a way to support these types of negotiation settings. This research reports on an experimental assessment of dynamic plots for visual interactive negotiations. Dynamic plots are compared to an alternative dynamic method of real-time negotiation support using selected conflict situations to test five hypotheses. The results of the laboratory assessment provide evidence for the hypotheses that dynamic plots stimulate negotiations, provide effective support to reach efficient, system optimal, and equitable solutions, and are well received as negotiation tools in real-time settings.     

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.     

The Influence of Past Negotiations on Negotiation Counterpart Preferences

Choosing the right counterpart can have a significant impact on negotiation success. Unfortunately, little research has studied such negotiation counterpart decisions. Three studies examined the influence of past negotiations on preferences to negotiate again with a counterpart. Study 1 found that the more favorable a past negotiated agreement the stronger the preference to negotiate with the counterpart in the future. Moreover, this relation was mediated through liking of the counterpart. Study 2 manipulated the difficulty of achieving a favorable agreement in the negotiation and found a significant effect of this situational factor such that subsequent counterpart preferences were less favorable when the negotiation was difficult. Similar to Study 1, this effect was mediated through liking of the counterpart. Study 3 examined the possibility of debiasing negotiator preferences from the biasing influence of situational characteristics by providing relevant information about the negotiation situation. Replicating the results of Study 2, negotiation difficulty affected counterpart preferences before additional information was given or when irrelevant information was given. However, once negotiators received relevant information on the negotiation situation, the effect of negotiation difficulty disappeared. Theoretical and practical implications are discussed.     

Sweet Little Lies: Social Context and the Use of Deception in Negotiation

Social context shapes negotiators’ actions, including their willingness to act unethically. We use a simulated negotiation to test how three dimensions of social context—dyadic gender composition, negotiation strategy, and trust—interact to influence one micro-ethical decision, the use of deception. Deception in all-male dyads was relatively unaffected by trust or the other negotiator’s strategy. In mixed-sex dyads, negotiators consistently increased their use of deception when three forms of trust (identity, benevolent, deterrent) were low and opponents used an accommodating strategy. However, in all-female dyads, negotiators appeared to use multiple and shifting reference points in deciding when to deceive the other party. In these dyads, the use of deception increased when a competitive strategy combined with low benevolence-based trust or an accommodating strategy combined with high identity-based trust. Deception in all-female dyads decreased when a competitive strategy was used in the context of low deterrence-based trust.     

The effects of argument preparation and timing of first offer on negotiators' cognitions and performance

We investigate how argument preparation (self-only, self/counter) and the timing of the first offer (immediate, delayed) combine to affect negotiation performance. Subjects participated in a dyadic negotiation concerning the out-of-court settlement of a lawsuit. Subjects prepared by generating a list of arguments in support of their case (self-only), or by generating a list of arguments in support of their caseaccompanied by a list of counterarguments that they might expect from their opponent (self/counter). In the Immediate Offer condition, subjects began the negotiation with an exchange of written settlement offers. In the Delayed Offer condition, subjects began the negotiation with a discussion of the qualitative negotiation issues. It was proposed that negotiators who prepared both their own and counterarguments would be more flexible and that this effect would be increased by delaying the first offer. The results indicate that the effects of these variables are more complex than originally proposed, and reveal significant interactions with the negotiator's role in the conflict.The first author was supported by the IBM Faculty Research Fund at the Graduate School of Business, the University of Chicago.     

Hot Versus Cool Behavioural Styles in Electronic Negotiations: The Impact of Communication Mode

In this paper, we study the effects of synchronous and asynchronous communication mode on electronic negotiations. By applying content analysis, we compare the negotiation processes of two e-negotiation simulations conducted in a synchronous and an asynchronous setting. Our results show significant differences in communication behaviour of subjects. Synchronous negotiation mode leads to less friendly, more affective, and more competitive negotiation behaviour. In the asynchronous communication mode, negotiators exchange more private and task-oriented information and are friendlier. These results suggest that negotiators in the asynchronous mode, who have more time to reflect, cool down and control emotions better while negotiators, who communicate synchronously engage more in emotional and competitive “hot” debates. In addition, negotiators in the asynchronous mode are more satisfied with the process and outcome of the negotiation. We conclude that de-individuation and escalating effects might be caused by communication mode rather than by the ability of the media to transmit social cues.     

Hidden influences in international negotiations: The interactive role of insecure cultural attachment,risk perception,and risk regulation for sellers versus buyers

This research examines the previously unstudied role of cultural attachment in international negotiations. Specifically focusing on the fearful attachment style, this article reveals the intricate interaction of cultural attachment, risk perception, and risk regulation on negotiators' ability to claim value in international negotiation. Supporting our theorizing based on cultural attachment and prospect theory, findings show that risk‐averse sellers with fearful attachment to their national culture perceive greater risk and in turn are more motivated to regulate risk through relationship‐building with their counterpart (Study 1). Moreover, these individuals achieve lower economic gains when they regulate relational risk by making fewer threats to walk away (Study 2). We discuss the implications and the importance of understanding one's attachment to own national culture as its interplay with role and risk mechanisms impacts effectiveness in international negotiations.     

Media Effects on the Formation of Negotiator Satisfaction: The Example of Face-to-Face and Text Based Electronically Mediated Negotiations

Recently, scholars have highlighted the importance of subjective negotiation outcomes such as negotiator satisfaction for future negotiations and the relationship between negotiators. This study considers the major antecedents of satisfaction formation in negotiation and analyses how the communication medium, i.e. the face-to-face (FTF) and the text based electronically mediated (TBEM) mode, influence satisfaction formation. Drawing on grounding in communication (Clark and Brennan in Perspectives on socially shared cognition. American Psychological Asociation, Washington DC, pp 127–149, 1991), hypotheses are developed and tested in an experimental gaming simulation in which graduate students negotiated in n = 52 dyads. The empirical analysis supports the notion that the communication medium has a mediated and a moderating effect on negotiator satisfaction. Aspirations, individual profit and positive relational messages mediate the medium’s effect on satisfaction. Furthermore, the impact of contentious behaviour and positive relational messages on negotiator satisfaction is stronger in TBEM than in FTF negotiations. This study also contributes to the wider negotiation literature by employing a context-rich gaming simulation for experimental purposes.     

自然人流动谈判的进程及影响因素分析

2000年WTO新一轮服务贸易谈判开启,自然人流动谈判是该轮谈判的焦点之一。自然人流动谈判历经提交提案、双边要价-出价、复边谈判、服务信号会议,尚未最终完结。WTO自然人流动谈判受到诸多因素的影响。自然人流动的更快速发展、发展中国家的更积极推动、利益相关者的更多关注对谈判起着有力的促进作用。而多哈回合一揽子承诺的谈判原则、自然人流动壁垒繁多复杂、发达国家与发展中国家间的利益冲突与观点分歧较大地阻碍了自然人流动谈判的进程。这些因素决定了自然人流动谈判成为WTO谈判的焦点,但其过程必定是曲折而缓慢的。     

Meta-level Coordination for Solving Distributed Negotiation Chains in Semi-cooperative Multi-agent Systems

A negotiation chain is formed when multiple related negotiations are spread over multiple agents. In order to appropriately order and structure the negotiations occurring in the chain so as to optimize the expected utility, we present an extension to a single-agent concurrent negotiation framework. This work is aimed at semi-cooperative multi-agent systems, where each agent has its own goals and works to maximize its local utility; however, the performance of each individual agent is tightly related to other agents’ cooperation and the system’s overall performance. We introduce a pre-negotiation phase that allows agents to transfer meta-level information. Using this information, the agent can improve the accuracy of its local model about how other agents would react to the negotiations. This more accurate model helps the agent in choosing a better negotiation solution for a distributed negotiation chain problem. The agent can also use this information to allocate appropriate time for each negotiation, hence to find a good ordering of all related negotiations. The experimental data show that these mechanisms improve the agents’ and the system’s overall performance significantly.     

Negotiation beliefs: Comparing Americans and the Chinese

We address the micro foundations of international business research by examining negotiation beliefs as a parsimonious guide for international business negotiators. We conceptualise the construct of ‘negotiation beliefs’ as a negotiator’s cognition about the nature of negotiation and effective negotiation strategies. We integrate the negotiation literature and empirically investigate the differences and similarities in the negotiation beliefs of Americans and the Chinese. Across two studies, we conduct a conceptual analysis of negotiation beliefs and develop measures for the culturally similar and culturally different factors of the negotiation beliefs of Chinese and American negotiators. We find that negotiation beliefs can predict negotiation outcomes. Our findings indicate that Americans and the Chinese share negotiation beliefs about cooperation and competition. They also understand negotiation using culturally different factors, namely hierarchy and relationship for the Chinese and economic interest and confrontation for the Americans. We further discuss the theoretical and practical implications for international negotiations, particularly regarding disputes between the US and China.     

The Relationship of Cognitive Effort,Information Acquisition Preferences and Risk to Simulated Auditor–Client Negotiation Outcomes

The auditor–client relationship is a legally-mandated relationship in which one party, the auditor, is hired and paid by the auditee (client) to inform third party stakeholders as to whether the client firm’s financial statements are presented in conformity with national financial accounting standards. When these statements do not meet the criteria for acceptable financial statements, a negotiation situation may arise in which the auditor is presumed to act in the best interests of shareholders and creditors who have no independent knowledge of the auditor’s findings. The client management may then feel forced to defend its numbers. The result is a negotiation between the auditor and client (e.g., Salterio in Account Financ 52:233–286, 2012; Brown and Wright in Account Horiz 22(1):91–109, 2008). This study examines cognitive factors and risk preference factors that may impact the negotiation both in the setting of each side’s negotiation position and on the outcomes of that negotiation using simulated auditor–client negotiations. Questionnaire and simulated auditor–client negotiations were used to generate the data, with MBA and MS in Accounting students playing the role of client CEOs and auditor partners. We further explore the use of a tool, Structural Equation Modeling, to test the data, in the process highlighting its usefulness in auditor–client negotiation research. We find that the cognitive characteristic of need for cognition is significantly and positively related to achievement of the negotiator’s desired income objectives and reported willingness to argue strongly for his/her position. Actively open-minded thinking, a second cognitive variable studied, was not significantly related to success in the negotiations, nor to a reported willingness to argue strongly for his/her position. Finally, we find that perceived aggressive tactics by the other party to the negotiation had a negative impact on the counterpart negotiator’s success in the negotiation, and satisfaction with it. As expected, risk assessment-related variables were not related to outcomes of interest.     

Religious belief and international business negotiations: Does faith influence negotiator behaviour?

Religious observance is widespread and continues to influence managerial behaviour in many parts of the world. However, its role in international business negotiations has not received much scholarly attention. This study explores some of the key ways in which religious belief shapes negotiation behaviour. Focusing specifically on the Islamic context, and drawing on interviews with 27 religiously observant Muslim managers in Malaysia, the study found that commitment to a common religion among negotiators positively influenced certain components of the negotiation process through, for example, the use of religious/emotional appeal, which emphasised their ‘spiritual camaraderie’. In some instances, however, we observed something of a paradox, whereby differing religious beliefs among negotiating counterparts were claimed to actually enhance, rather than hinder, negotiations.     

Cultural variation in response to strategic emotions in negotiations

This research examined how culture influences the effectiveness of the strategic displays of emotions in negotiations. We predicted that in cross-cultural negotiation settings, East Asian negotiators who highly regarded cultural values that are consistent with communicating respect as humility and deference would be more likely to accept an offer from an opposing party who displayed positive as opposed to negative emotion. With a sample of East Asian MBA students, the results of Study 1 confirmed this prediction. Study 2 results replicated this finding with a sample of Hong Kong executive managers and also found they were less likely to accept an offer from a negotiator displaying negative emotion than Israeli executive managers who did not hold humility and deference in such high regard. Implications for strategic display of emotions in cross-cultural settings are discussed.     

Blinded by Power: Untangling Mixed Results Regarding Power and Efficiency in Negotiation

Negotiators are often advised to seek information about their counterparts’ power. However, we know little about how such information affects negotiators’ behaviours and outcomes. Study 1 considered dyadic negotiations in which negotiators have symmetric or asymmetric best alternatives to the negotiated agreement (BATNAs). It also examined the impacts of (a)symmetry and knowledge of a counterpart’s BATNA on agreement efficiency (indexed by joint gains), and how knowledge alters negotiators’ realised power (indexed by percentage of resource claimed) in BATNA-asymmetric negotiations. Studies 2 and 3 focussed on BATNA-asymmetric negotiations. Study 2 tested the mechanism by which knowledge affects efficiency. Study 3 considered the impacts of knowledge on equity concerns, perceived power and information exchange about preferences. The findings indicate the following: knowledge of BATNA asymmetries (rather than the existence of BATNA asymmetries) adversely affects agreement efficiency; this knowledge increases strong negotiators’ focus on value claiming, judgement errors about counterparts’ preferences, perceived power and realised power, but impedes their information-sharing behaviour about preferences. Their focus on value claiming mediates the relationship between knowledge and judgement errors, whereas judgement errors mediate the relationship between their focus on value claiming and agreement efficiency. Furthermore, knowledge of BATNA asymmetries leads to contrasting perceptions of fairness. Strong negotiators with knowledge believe that a fair agreement should reflect their power advantage; weak negotiators generally tend to judge fairness based on equality. Counterintuitively, knowing one’s own strengths can lead to ‘winning’ a meagre prize and neglecting the opportunity for value creation by trading-off on negotiated issues.