The effect of communication medium on negotiation performance

Concepts of media efficiency and media richness are employed to describe the impact of communication media on two key aspects of negotiation behavior—reducing uncertainty about the task, and managing equivocality about negotiator's bargaining orientation. A controlled experiment was conducted to examine how the use of either audio or text forms of verbal communication, and the presence or absence of visual communication, impacts negotiation performance in a bilateral monopoly task. Each member of a pair of negotiators received private instructions either to maximize joint profit (a cooperative bargaining orientation) or to maximize individual profit (an individualistic bargaining orientation). Negotiation performance was measured via the total amount of relative cooperativeness of verbal communication and joint profit. In the audio mode as opposed to the text mode, the total amount of verbal communication and joint profit was increased. In the presence of visual communication the relative cooperativeness and joint profit of pairs of individualistic negotiators was less than that of cooperative negotiators. In the absence of visual communication the relative cooperativeness and joint profit of pairs of individualistic negotiators was no less than that of cooperative negotiators. In sum the findings suggest that uncertainty regarding the logical structure of the task was reduced primarily via verbal communciation, while equivocality regarding the bargaining orientation of the other negotiator was reduced primarily via visual communication. The implications for group decision and negotiation research and practice are explored.     

基于五力模型的Groupon模式团购网站竞争战略研究

运用波特五力模型对Groupon模式团购网站的竞争环境进行分析,结果表明供应商的议价能力较弱、购买者的议价能力较强、潜在进入者的威胁较大、替代品的威胁较小,同行业内竞争者的竞争非常激烈。针对这种竞争态势,提出了保持和提升Groupon模式团购网站竞争力的三大竞争战略:成本领先战略、差异化战略、集中化战略。     

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.     

Disagreement points in trade negotiations

This paper analyzes trade negotiations between two large countries in the framework of an alternating-offer bargaining model with endogenous interim disagreement actions. Despite of the flexibility in disagreement tariff selection, the countries would keep the status quo tariffs in disagreement periods as far as the country which benefits from keeping the status quo tariffs compensates for the other country’s foregone gains from deviating in disagreement actions. Each equilibrium outcome converges to a corresponding Nash bargaining solution whose disagreement point reflects the status quo tariff rates as well as the threat of raising the tariff to the Nash tariff rate.     

Asset Allocation of Two‐Person Households under Different Longevity Expectations

This study examines asset allocations of near‐elderly couples when spouses have different longevity expectations. Since the risk‐adjusted return on equities increases with investment horizon, a spouse who expects longer retirement period has an incentive to hold riskier portfolio. Using data from the Health and Retirement Study, we show that portfolio riskiness increases with the subjective survival probability of the decision‐making spouse. As predicted by the bargaining model, portfolio outcomes are uncorrelated with the horizon of the spouse who has less bargaining power. Results also show that the extent expected horizon is incorporated into asset allocation depends on the decider's gender. The share of equities depends on the husband's expected horizon when he leads decision making but not on the wife's horizon when she has more power. These findings contradict the prediction that wife‐led households may hold more equities than do husband‐led households because of their longer lifespan.     

Not All Threats are Created Equal: How Implicitness and Timing Affect the Effectiveness of Threats in Negotiations

The effectiveness of threats in negotiations was examined by exploring two factors likely to affect it: implicitness, or the extent to which the threat mentions what action the perpetrator would take if the target does not comply; and timing, or the time when the threat is stated. Participants were given a negotiation scenario that differed only by the nature of the threat made by their counterpart. The design was a 2 (implicit vs. explicit threat) × 2 (early vs. late threat) factorial design with a control condition (no threat). The study showed that early-implicit and late-explicit threats were both more likely to elicit concessions than early-explicit and late-implicit threats. The two more effective threats were also the ones that made the perpetrator seem less aggressive. Further, perceived credibility mediated the positive effect that late-explicit threats had over late-implicit threats in eliciting concessions. These results support the claim that whether making the threats sanction implicit is effective depends on its timing, as the nature of bargaining moves and perceptions varies over time (Pruitt 1981). They suggest that the way in which a threat is stated may dramatically influence its effect on the target.     

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.     

The Role of Independent Expert Reports in Australian M&A Market

This paper examines the role of independent expert reports in Australian M&A market. Using a comprehensive sample of 2888 transactions between 1991 and 2013, I find that a “neither fair nor reasonable” opinion forces the acquirer to increase the offer premium by 5%, ceteris paribus. The finding remains robust after controlling for the target's bargaining power measured by the residual values of initial premiums that are not explained by observable firm‐deal characteristics. The target that has a weak bargaining position tends to receive less effect of an unfavorable report. In addition, a “fair and reasonable” opinion increases the probability of success, while the unfavorable report does not affect the transaction outcome. I identify the causal effect of expert opinions by differences‐in‐differences analysis using the Duke case decision.     

Union negotiations,product market cooperation,and profits

Within the context of a unionized duopoly with decentralized Right‐to‐Manage wage negotiations, this paper investigates how different measures of product market cooperation impact firms' profitability. In the presence of exogenous production costs, a classical result in industrial economics is that conjectural derivatives (CD) and conjectural elasticities (CE) lead to similar results, and CE reproduce exactly the same output decision level (and, therefore, profits) of the coefficient of cooperation (CC). These results show that wage bargaining alters those relations; in particular, the equivalence of the CE and CC no longer holds true.     

Bargaining and Search: An Experimental Study

We study experimentally two versions of a model buyer and a seller bargain over the price of a good; however, the buyer can choose to leave the negotiation table to search for other alternatives. Under one version, if the buyer chooses to search for a better price, the opportunity to purchase the good at the stated price is gone. Under the second version, the seller guarantees the same price if the buyer chooses to return immediately after a search (presumably because a better price could not be found). In both cases, the buyer has a fairly good idea about what to expect from the search, but because the search is costly, he has to weigh the potential benefits of the search against its cost. It turns out (theoretically) that adding search to a simple bargaining mechanism eliminates some unsatisfactory features of bargaining theory.Our experiment reveals that the model can account for some (but not all) of the behavioral regularities. In line with recent developments in behavioral decision theory and game theory, which assume bounded rationality and preferences over the relative division of a surplus, we find that subjects follow simple rules of thumb and distributional norms in choosing strategies, which are reflected in the behavioral consistencies observed in this study.     

Subcontracting bargaining power and the trade policy

In this paper, we consider that the split of surplus from a subcontracting deal depends on the relative bargaining powers of domestic and foreign firms. The finding shows that a domestic optimal export policy is a tax (subsidy) if the bargaining power of the domestic firm is sufficiently small (large). We also demonstrate that a domestic firm’s higher bargaining power increases (may decrease) domestic profit if the export policy is exogenous (endogenous). In the presence of an outsider option, the domestic optimal export policy will be threatened by the outsider option if the domestic firm’s bargaining power is sufficiently small, and thus a large bargaining power increases the optimal export tax. At the same time, the foreign firm may still subcontract to the domestic firm even if the domestic firm has a higher total marginal cost of the intermediate good than the outsider option.     

The Effects of Uncertain Divestiture as Regulatory Threat

It has been argued that the threat of regulatory intervention affects firm behavior. We investigate the pricing decision of the dominant firm under regulatory threat, considering the probability of intervention as a function of the price. Our focus is on the case where the potential divestiture of the firm serves as a threat of regulatory intervention. It is shown that under certain conditions associated with the marginal expected penalty, the mere threat of divesting a certain portion of the firm’s manufacturing plants leads to a lower price than the actual divestiture of that same portion. Numerical examples illustrate that with relatively small-scale divestiture, the firm’s price under the threat may be lower than that under the actual divestiture, within a relatively broad range of regulator’s attitudes toward intervention.     

事务所行业专长、客户谈判能力与审计费用

文章以我国上市公司为对例,实证研究了事务所行业专长和客户谈判能力对审计费用的影响,研究结果表明:在总体上,我国审计收费与事务所行业专业化水平显著正相关,与客户谈判能力显著负相关,行业专业化水平愈高的事务所,审计收费溢价愈多;谈判能力愈强的企业,折价愈多;相对而言,有行业专长的事务所和国际"四大"的专业化收费溢价更多;但在客户谈判能力较高时,事务所的专业化溢价水平较低;客户谈判能力的折价效应仅在"非四大"审计时存在,"四大"审计时不存在;在无行业专长的"非四大"审计时存在,有行业专长的"非四大"审计时不存在;在企业的谈判能力强时存在,企业的谈判能力弱时不存在。     

Wage bargaining and multinational firms

We set up a general equilibrium model with heterogeneous firms to study the interaction between wage bargaining and foreign direct investment. Thereby, we highlight the incentives of firms to invest abroad in order to improve their bargaining position vis-á-vis local unions and we show how changes in the bargaining power of unions affect the share of multinational firms in an open economy. In addition, taking into account this relationship between wage bargaining and foreign direct investment, our analysis provides novel insights on how labor income and the unemployment rate adjust to economic integration and how changes in the bargaining power of unions affect these two labor market variables.     

Negotiating a Stable Government: An Application of Bargaining Theory to a Coalition Formation Model

In this paper, we apply bargaining theory to a certain model of coalition formation. The notions of a feasible government and a stable government are central in the model considered. By a government, we mean a pair consisting of a majority coalition and a policy supported by this coalition. The aim of this paper is to establish which stable government should be created if more than one stable government exists or, in case there is no stable one, which feasible government should be formed if more than one feasible government exists. Several bargaining procedures leading to the choice of one stable (or feasible) government are proposed. We define bargaining games in which only parties belonging to at least one stable (or feasible) government bargain over the creation of a government. We consider different bargaining costs. We investigate subgame perfect equilibria of the bargaining games defined. It turns out that the prospects of a party depend on the procedure applied, and on the bargaining costs assumed. We also apply the coalition formation model to the Polish Parliament after the 2001 elections and apply the different bargaining games for the creation of a government to this example.     

Contracting in dynamic games

We study the bargaining problem in the dynamic framework. The classical way of solving a dynamic bargaining problem is to transform the extensive form game into the normal form and then apply the theory of bargaining well developed for normal form games. This means that the parties sign a binding contract in the beginning of the game which defines their actions for the full duration of the game. In this article, we consider the setting where the players monitor the contract as the game evolves. The main purpose of the article is to study conditions under which the players do not have a rationale to renegotiate a new contract at any intermediate time period; i.e., the contract is time consistent. Time consistency restricts the set of bargaining solutions in dynamic games. We will show that time consistency of the contract is guaranteed if the bargaining solution satisfies the controversial independence-of-irrelevant-alternatives property.     

Endogenous political organization and the value of trade agreements

In a bargaining model of endogenous protection, I introduce fixed costs of political-organization that need to be incurred by capitalists prior to actual lobbying. Unlike Maggi and Rodriguez-Clare [J. Pol. Econ. 106(3) (1998) 575] intersectoral capital mobility is disallowed. Nevertheless, I am still able to obtain their main result that a government with low bargaining power vis-à-vis the import-competing lobby precommits to a free-trade agreement. Further, with high fixed organizational costs, the government prefers to stay out of such agreements. Its maximum bargaining power consistent with signing a trade agreement has an inverse-V-shaped relationship with respect to the size of fixed costs.     

不完全契约下的劳动剩余控制权安排研究

员工与雇主之间的劳动关系具有平等与隶属的双重性,劳动争议的发生本质上是＂平等＂与＂隶属＂的争议,表现为劳动过程中对劳动剩余控制权的谈判与争夺。在不完全契约条件下,对剩余控制权分配的机制安排取决于劳资双方的谈判实力,应当设计有利于提升劳动者相对谈判实力的机制来实现社会和谐与经济的可持续发展。     

The good,the bad,and the ugly: Technology transfer competence,rent-seeking,and bargaining power

In this paper, we explore the relationships between subsidiary technology transfer competence, bargaining power and rent-seeking. In the multinational corporation, technology transfer competence is generally perceived as something desirable. We connect this bright side of subsidiary-level processes to a potentially uglier and darker side of the organization, namely that subsidiaries gain bargaining power that is exercised for bad ends, i.e., rent-seeking. Using an empirical analysis that comprises intrafirm technology transfers, this paper finds that technology transfer competence leads to greater subsidiary bargaining power that in turn increases rent-seeking behavior; but this competence does not directly affect rent-seeking. We suggest that bargaining power offers a key explanation for rent-seeking. This paper advances the understanding of subsidiary sources of power within the multinational corporation and the organizational determinants of rent-seeking, which is relevant to theory development as well as to managers.     

Understanding Participation

The word 'participation' is taken to refer to a situation in which employees have some sort of share in the businesses which employ them. On this basis a classificatory scheme is produced which distinguishes between different forms of participation as well as the sources and motives behind those different forms. Participation as a whole is then distinguished from bargaining between management and labour. In bargaining, separate and opposing interests are accepted. In participation, there is an attempt to produce an over-arching common interest. More importantly, bargaining operates outside those organizational arrangements definitive of a business which grant a strictly subordinate role to labour with respect to management structures and property entitlements. In contrast, participation is a modification of those arrangements up to, but not beyond, a position of equality for labour. It is this which gives participation its essentially reformist character and exposes it to attack from both those seeking a more than participatory share to labour and those for whom even a participating share is excessive.