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date: 26 November 2020

Negotiation and Bargainingfree

  • Wolfgang SteinelWolfgang SteinelLeiden University, Department of Psychology
  •  and Fieke HarinckFieke HarinckLeiden University, Department of Psychology

Summary

Bargaining and negotiation are the most constructive ways to handle conflict. Economic prosperity, order, harmony, and enduring social relationships are more likely to be reached by parties who decide to work together toward agreements that satisfy everyone’s interests than by parties who fight openly, dominate one another, break off contact, or take their dispute to an authority to resolve.

There are two major research paradigms: distributive and integrative negotiation. Distributive negotiation (“bargaining”) focuses on dividing scarce resources and is studied in social dilemma research. Integrative negotiation focuses on finding mutually beneficial agreements and is studied in decision-making negotiation tasks with multiple issues. Negotiation behavior can be categorized by five different styles: distributive negotiation is characterized by forcing, compromising, or yielding behavior in which each party gives and takes; integrative negotiation is characterized by problem-solving behavior in which parties search for mutually beneficial agreements. Avoiding is the fifth negotiation style, in which parties do not negotiate.

Cognitions (what people think about the negotiation) and emotions (how they feel about the negotiation and the other party) affect negotiation behavior and outcomes. Most cognitive biases hinder the attainment of integrative agreements. Emotions have intrapersonal and interpersonal effects, and can help or hinder the negotiation. Aspects of the social context, such as gender, power, cultural differences, and group constellations, affect negotiation behaviors and outcomes as well. Although gender differences in negotiation exist, they are generally small and are usually caused by stereotypical ideas about gender and negotiation. Power differences affect negotiation in such a way that the more powerful party usually has an advantage. Different cultural norms dictate how people will behave in a negotiation.

Aspects of the situational context of a negotiation are, for example, time, communication media, and conflict issues. Communication media differ in whether they contain visual and acoustic channels, and whether they permit synchronous communication. The richness of the communication channel can help unacquainted negotiators to reach a good agreement, yet it can lead negotiators with a negative relationship into a conflict spiral. Conflict issues can be roughly categorized in scarce resources (money, time, land) on the one hand, and norms and values on the other. Negotiation is more feasible when dividing scarce resources, and when norms and values are at play in the negotiation, people generally have a harder time to find agreements, since the usual give and take is no longer feasible. Areas of future research include communication, ethics, physiological or hormonal correlates, or personality factors in negotiations.

Bargaining and negotiation, the “back-and-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed” (Fisher, Ury, & Patton, 2012, p. xxv), are the most constructive ways to handle conflict. Economic prosperity, order, harmony, and enduring social relationships are more likely to be reached by parties who decide to work together toward agreements that satisfy everyone’s interests than by parties who fight openly, dominate one another, break off contact, or take their dispute to an authority to resolve (Lewicki, Saunders, & Barry, 2021).

Negotiation and bargaining are common terms for discussions aimed at reaching agreement in interdependent situations, that is, in situations where parties need each other in order to reach their goals. While both terms are often used interchangeably, Lewicki et al. (2021) distinguish between distributive bargaining and integrative negotiation. Distributive refers to situations where a fixed amount of a resource (e.g., money or time) is divided, so that one party’s gains are the other party’s losses. In such win–lose situations, like haggling over the price of a bicycle, bargainers usually take a competitive approach, trying to maximize their outcomes. Integrative refers to situations where the goals and objectives of both parties are not mutually exclusive or connected in a win–lose fashion. In such more complex situations that usually involve several issues (rather than the distribution of only one resource), interdependent parties try to find mutually acceptable solutions and may even search for win–win solutions, that is, they cooperate to create a better deal for both parties (Lewicki et al., 2021).

The distinction between bargaining and negotiation reflects the research tradition, where bargaining has largely been investigated from an economic perspective, focusing on the dilemma between immediate self-interest and benefit to a larger collective. Negotiation has mostly been investigated from the perspective of social psychology, organizational behavior, management, and communication science and has mainly focused on the effect on, and behavior and cognition of people in richer social situations.

Research Paradigms

Negotiation research has applied various paradigms. Game-theoretic approaches, such as the Prisoners’ Dilemma and related matrix games, in which simultaneous choices together influence two parties’ outcomes, explore how people handle the conflict between immediate self-interest and longer-term collective interests (see Van Lange, Joireman, Parks, & Van Dijk, 2013, for a review). A paradigm to investigate behavior in purely distributive settings is the Ultimatum Bargaining Game (Güth, Schmittberger, & Schwarze, 1982). It models the end phase of a negotiation: one player offers a division of a certain resource (e.g., €100 split 50–50), and the other player can either accept, in which case the offer is carried out, or reject, in which case both players get nothing. Studies in ultimatum bargaining have consistently shown that even in distributive one-shot interactions, bargainers not only try and maximize their own outcomes, but are also driven by other-regarding preference, can reject unfair offers (Güth & Kocher, 2014), are concerned about being and appearing fair (Van Dijk, De Cremer, & Handgraaf, 2004), and are affected by their own and a counterpart’s emotions (Lelieveld, Van Dijk, Van Beest, & Van Kleef, 2012).

While ultimatum bargaining is a context-free simulation of a distributive negotiation, integrative negotiation has predominantly been studied in richer contexts that simulate real-life decision-making. Research has largely relied on negotiation simulations to identify and analyze participants’ behaviors and measured economic outcomes (Thompson, 1990). Field studies on negotiation behavior have been conducted to a much smaller extent (Sharma, Bottom, & Elfenbein, 2013).

The remainder of this article will first describe the strategy and planning for negotiations, and the behavior and outcomes of negotiations. It will then cover research on factors that affect behavior and outcome in integrative negotiation, starting with intrapersonal factors, such as cognitions and emotions. Then aspects of the social context, such as gender, power, culture, and group constellations will be covered, before moving on to aspects of the situational context, such as time, communication media, and conflict issues, and concluding with some emerging lines of research.

Negotiation Preparation and Goals

The Goal of Negotiations

The goal of negotiations may be deal-making or dispute resolution. Before entering the actual negotiation, well-prepared negotiators define the goals they want to achieve and the key issues they need to address in order to achieve these goals (Lewicki et al., 2021). Deal-making (e.g., a student selling his bike) involves two or more parties who have some common goals (e.g., transferring ownership of the bike from the seller to the buyer) and some incompatible goals (receiving a high price vs. paying a low price), and try and negotiate an agreement that is better for both than the status quo (the seller keeping the bike) or any alternative agreements with third parties (e.g., selling the bike to someone else or buying a different bike). Negotiation with the aim of dispute resolution (e.g., a student complaining about the noise a flatmate makes) occurs when parties who are dependent on each other (e.g., because they share a flat) realize that they are blocking each other’s goal attainment (preparing for an exam vs. listening to punk rock) and negotiate what can be done to solve the problem.

Preparing for Negotiations

Negotiators are advised to define their alternatives, targets, and limits, and to prepare an opening offer (Lewicki et al., 2021). Figure 1 shows the key points in the example of a student selling his bike to another student. The target point is the point at which each negotiator aspires to reach a settlement. For example, the seller hopes to sell his bike for €280, and the buyer hopes to buy it for €190. By making opening offers beyond their targets, negotiators create leeway for concessions while pursuing their goal. In the bike example, the seller has prepared an opening offer (e.g., an asking price) of €320, while the buyer planned to start the negotiation by offering to pay €150. Well-prepared negotiators define their limits before entering a negotiation by setting a resistance point, that is, the price below which a settlement is not acceptable (Lewicki et al., 2021). If, for example, the seller would accept any price above €200 and the buyer is willing to pay up to €280, it is likely that they settle on a price somewhere in this range. This zone between the two parties’ resistance points is called zone of potential agreements (ZOPA; Lewicki et al., 2021).

Figure 1. Overview of Key Points in Negotiation Preparation (Example).

Well-prepared negotiators are aware of the alternative they have to reaching a deal in the upcoming negotiation, in particular of their best alternative to a negotiated agreement (BATNA; Fisher et al., 2012). As the quality of a negotiator’s BATNA defines their need to reach an agreement, and thus their dependency on their counterpart, attractive BATNAs increase a negotiator’s power.

Deal-making and dispute resolution differ in the way parties are dependent on each other: in deal-making, both parties can have independent alternatives that they can unilaterally decide to turn to instead of reaching a deal (the buyer may find a different seller, and the seller might find another potential buyer). Disputes that occur between parties who share a common fate, like flatmates, parents of a child, co-owners of a company, or different ethnic or religious groups living on the same territory, can only be solved by the parties working together. The alternative to not solving a dispute for both disputants therefore is conflict escalation (e.g., sabotaging the stereo installation), a victory for one (and a grudge for the other) or a stalemate in which neither party is willing to abandon their position. These alternatives usually do not last or they damage the relationship between the parties.

Negotiation Behavior and Outcomes

Negotiation is communication. Parties communicate either directly, or through agents, and exchange offers and counteroffers, usually alongside arguments, questions, proposals, cooperative statements, commitments, threats, and so on. How people behave in negotiations is influenced by their preferred negotiation style. The Dual Concern Model (Blake & Mouton, 1964; Pruitt & Carnevale, 1993; Rubin, Pruitt, & Kim, 1994) describes how two types of concerns jointly determine negotiation styles. These two concerns, which can both range in intensity from low (i.e., indifference) to high, are the concern about a party’s own outcome and the concern about the other’s outcome, as displayed in Figure 2. Importantly, the model does not postulate concern about a party’s own interests (also called concern for self or self-interest) and concern about the other’s outcomes (also called concern for other or cooperativeness) as opposite ends of one scale, but rather as two dimensions that can vary independently.

Figure 2. Dual-Concern Model.

Source: Blake and Mouton (1964).

Parties with a low concern for self and for other will probably be avoiding negotiations, leaving the other party without an agreement. Parties with a high concern for self and a low concern for other are likely to use forcing behaviors, while aiming to achieve the own goals by imposing a solution onto the other. Forcing (also called contending), like using threats or other forms of pressure, is detrimental to the relationship with the other party, and can lead parties into a conflict spiral, especially when they are similarly powerful (Rubin et al., 1994).

Parties with a low concern for self and a high concern for other are likely to engage in yielding. Yielding (also called accommodating), like making large concessions or accepting the other party’s demands, is often the strategy of parties who feel weaker than their counterpart or have a strong need for harmony. This can lead into a dynamic of exploitation. It is less effective when negotiating important issues, since yielding on important issues will leave the yielding party dissatisfied with the outcome. Parties with an intermediate concern about both parties’ outcomes are likely to use compromising, a “meet-in-the-middle” approach often considered a democratic and fair way of solving conflicts between mutually exclusive goals. Parties who compromise, however, might settle for a simple solution and overlook more creative solutions (Pruitt & Carnevale, 1993).

The negotiation styles displayed in Figure 2, on the diagonal from yielding via compromising to forcing, entail distributive behavior. Distributive behavior aims to distribute the value of a deal in a win–lose fashion—one’s losses are the other’s gains. These are the behavior that bargainers engage in during positional bargaining—each side takes a position, argues for it, and might make concessions in order to move toward a compromise (Fisher et al., 2012). The negotiation style problem-solving, which is located beyond this distributive diagonal, aims at reaching win–win agreements. Instead of focusing on their positions, parties with a high concern for self and for other may focus on their interests. Interests are the underlying causes or reasons why negotiators take a certain position (Fisher et al., 2012). Engaging in integrative problem-solving behavior, negotiators try to find solutions that integrate both parties’ interests and are thus better for both parties than a simple compromise would be (see the article “Conflict Management” for a more elaborate description of the dual concern model).

Differentiation before Integration

Negotiations often follow a differentiation-before-integration pattern in which negotiating parties start with distributive, forcing behavior, such as threatening the other party or fiercely arguing for their own interests. Only after realizing that this competitive behavior does not bring them any closer to an agreement, for example because the other party does the same, they tend to switch to more integrative negotiation and become willing to look for mutually satisfactory agreements (Harinck & De Dreu, 2004; Olekalns & Smith, 2005; Walton & McKersie, 1965). In lab studies, such switches from competitive to cooperative negotiation often occur after temporary impasses (Harinck & De Dreu, 2004)—moments in a negotiation in which parties take a time-out before having reached an agreement. In field studies, such switches have been described as “ripe moments” (Zartman, 1991) or “turning points” (Druckman, 2001; Druckman & Olekalns, 2011).

Outcomes of Negotiations

Outcomes of negotiations are either an impasse when no agreement is reached or an agreement that can be either distributive (win–lose) or integrative (win–win). Outcomes can be measured as objective or economic outcomes—such as money or points—and as subjective outcomes—such as satisfaction with the outcome or process and willingness to interact in the future (Curhan, Elfenbein, & Kilduff, 2009). Distributive agreements are those that divide some fixed resources between parties in a win–lose way—one party’s gains are the other party’s losses. An example would be a situation in which a buyer and seller are negotiating only about the price of a bike. Win–lose does not necessarily imply victory of one party over the other—a simple compromise (50–50) where parties meet in the middle of their initial demands is an example of a distributive agreement as well. Distributive negotiation styles are likely to lead to impasses when parties match their forcing behavior, or to distributive agreements when one party yields to the forcing of the other or when both decide to compromise and “meet in the middle.”

Integrative agreements are those that divide an expanded set of resources and thereby increase the benefit for both negotiators. Contrary to distributive bargaining, which is dominated by value-claiming strategies, integrative negotiation offers the possibility to create value, that is, to find solutions that improve the outcomes to both parties (Lewicki et al., 2021). A key activity in integrative negotiation is to generate alternative solutions to the problem at hand. One way to generate alternative solutions is by adding resources and negotiating about more than initially planned, thereby making a deal more attractive to both parties. Figuratively, negotiators expand the pie before they divide it. For example, the seller of a bicycle might add a good bicycle lock that he does not need any more, thereby making a better deal selling his bike and lock, while the buyer gets a good lock for his new bike and in total pays less than he would have paid if he had to buy a new lock in a shop.

Another way to generate alternative solutions is by discussing multiple issues rather than single issues, and by determining which issues are more and less important. For example, the seller of the bicycle might be a returning exchange student who cannot take the bike to his home country, but he needs to use it until the final days of his stay. By negotiating the price and delivery date, buyer and seller may integrate the seller’s preference for a late delivery with the buyer’s preference for a lower price. Integrative negotiation styles can lead to integrative agreements; if negotiators trust each other, exchange information, and gain an accurate understanding of their preferences and priorities, they might detect common interests (Rubin et al., 1994) and mutually beneficial trade-offs across topics that vary in importance (Ritov & Moran, 2008), so-called logrolling (Thompson & Hastie, 1990). Parties can also reach integrative agreements through an implicit way of exchanging information, for example by proposing multiple equivalent simultaneous offers (MESOs; Leonardelli, Gu, McRuer, Medvec, & Galinsky, 2019) and letting the other side choose which offers they prefer. For example, knowing that a rental bike would cost €50 a week, the seller may propose two equally attractive offers—selling the bike immediately for €300, or selling it in one week for €250. The prospective buyer, provided he has little urgency, might choose the latter option, thereby creating value from the different priorities that the two parties have.

An important ability of negotiators is perspective-taking, the cognitive capacity to consider the world from another individual’s viewpoint (Galinsky & Mussweiler, 2001; Trötschel, Hüffmeier, Loschelder, Schwartz, & Gollwitzer, 2011). Perspective-taking helps negotiators detect logrolling opportunities and thereby exploit the integrative potential of a negotiation situation (Trötschel et al., 2011).

Cognitions

Cognitions (how people think about a situation) influence negotiation behaviors and outcomes. Cognitions have been the focus of the behavioral decision perspective on negotiations that was dominant in the 1980s and 1990s (for an overview, see Bazerman, Curhan, Moore, & Valley, 2000). Two of the most prominent biases are fixed-pie perceptions and anchoring.

Fixed-Pie Perception

A fixed-pie perception is the common assumption that the interests of the parties are diametrically opposed such that “my gain is your loss” (Thompson & Hastie, 1990). This idea is related to the view that negotiation is a purely distributive contest in dividing a fixed amount of resources in which the winner claims a larger share than the loser. When both parties have a fixed-pie perception, they are unlikely to notice that their priorities may differ and might overlook profitable opportunities for a mutually beneficial exchange of concessions (logrolling; as described in the section “Outcomes of Negotiations”).

Anchoring

Anchoring is the tendency to rely on a first number when making a judgment. For example, the interested buyer might offer a higher price if, immediately before negotiating the price of the second-hand bike, he saw an ad for a bike costing €1,500, than if he saw a bike offered for €100. The offer made for the second-hand bike is thus influenced (anchored) by prior information. This bias is related to the first-offer effect. In negotiations, the first offer functions as an anchor point at which the negotiation starts and a negotiation agreement is often in favor of the first party that proposes a concrete number (Galinsky & Mussweiler, 2001; Loschelder, Trötschel, Swaab, Friese, & Galinsky, 2016).

Emotions

Emotions (how people feel about a situation) and the expression thereof have a profound influence on negotiation processes and outcomes. The effects of emotions on the negotiation process can be intrapersonal—a person’s mood or emotion influences his or her own behavior. These effects can also be interpersonal—one person who expresses his or her emotions affects another person’s behavior (Van Kleef, Van Dijk, Steinel, Harinck, & Van Beest, 2008).

Intrapersonal Effects of Emotions

The intrapersonal effects of emotions are straightforward. Negotiators who are in a bad mood, or who feel angry or disappointed, are more likely to engage in forcing behavior and less likely to accommodate the other party. On the other hand, negotiators who are in a good mood or feel happy are more likely to be lenient negotiation partners who are willing to make a deal (Allred, Mallozzi, Matsui, & Raia, 1997; Friedman et al., 2004; Kopelman, Rosette, & Thompson, 2006; Van Kleef & De Dreu, 2010; Van Kleef, De Dreu, & Manstead, 2004).

Interpersonal Effects of Emotions

The interpersonal effects of emotions in negotiations are summarized by the Emotions-As-Social-Information Model (Van Kleef, 2009), which proposes that a negotiator’s emotions affect the behavior of their counterparts via two distinct processes. Emotions trigger inferential processes and affective reactions in the targets of those emotions. The inferential process means that emotions give information about the aspirations of a party—an angry reaction of a counterpart on a proposal signals that the counterpart has set ambitious limits. As a result, an angry reaction by party A often triggers a yielding response by party B, in order to satisfy party A and reach an agreement (Sinaceur & Tiedens, 2006; Van Kleef et al., 2004). A happy reaction by party A, on the other hand, might indicate the proposal is near target point of party A, and party B may conclude that no further concessions are required in order to reach an agreement.

Emotions might also trigger an affective reaction in the receiver; an expression of anger of party A is likely to engender an angry reaction by party B in return, whereas a more happy reaction will trigger a happier response. In general, the interpersonal effect of anger is exemplified by the finding that negotiators who express anger will get a yielding response from their counterpart, but only when the other party is willing and able to take the emotions of the angry party into account (Sinaceur & Tiedens, 2006; Van Kleef et al., 2004). On the other hand, an expression of happiness is met with a more competitive or less yielding response. Expressing anger in negotiations can backfire, however (Van Kleef et al., 2008). Anger directed at the person, rather than at a proposal, is likely to lead to retaliation rather than concessions (Steinel, Van Kleef, & Harinck, 2008), and the same effect occurs for angry expressions in value-laden conflict (Harinck & Van Kleef, 2012); people may overtly concede to a counterpart who expresses anger, but they might subsequently retaliate covertly (Wang, Northcraft, & Van Kleef, 2012). Similarly, expressing anger helps powerful negotiators who may receive a conciliatory response, but harms powerless parties, who are more likely to receive an angry, non-conciliatory response (Overbeck, Neale, & Govan, 2010; Van Dijk, Van Kleef, Steinel, & Van Beest, 2008). Also, fake expressions of anger aimed at trying to get the other party to concede are more likely to lead to intransigence rather than to conciliatory behavior in the receiving party, due to reduced trust (Campagna, Mislin, Kong, & Bottom, 2016; Côté, Hideg, & Van Kleef, 2013).

The cognitions and emotions of negotiation parties show that negotiators are humans; they think, make mistakes, and feel. In fact, for many people negotiations can be quite stressful due to either their thoughts or their feelings about the negotiation. The next section, “Gender,” will address situational characteristics that influence negotiation processes, behaviors, and outcomes, focusing on three major situational factors—the gender composition of the negotiating dyad, the power positions of the dyad members, and the cultural environment in which negotiations take place.

Gender

Gender differences can arise in negotiation, showing a general advantage for male negotiators over female negotiators. These differences tend to disappear, however, when negotiators are more experienced, when the range of potential agreements is known, or when they negotiate for someone else (Mazei et al., 2015). Gender differences in negotiation can largely be explained by stereotypical thinking. The stereotypical ideas of an effective negotiator—strong, dominant, assertive, and rational—tend to align with stereotypical male characteristics, whereas the stereotypical ideas about an ineffective negotiator—weak, submissive, accommodating, and emotional—tend to align with stereotypical female characteristics, suggesting that male negotiators are more effective than female negotiators (Bowles, 2012; Kray & Thompson, 2005).

These stereotypical ideas can play a role in negotiations when negotiators use them to figure out how to behave and when they want to predict how the other party is likely to behave (Bowles, 2012; Mazei et al., 2015). In general, male negotiators are expected to be competitive, whereas female negotiators are expected to be more cooperative. For example, people are likely to make lower offers to women than to men and expect women to be more easily satisfied with the offers they receive (Ayres & Siegelman, 1995; Kray, Locke, & Van Zant, 2012; Solnick & Schweitzer, 1999).

Stereotype Threat

Stereotype threat is an important cause for the lower negotiation outcomes achieved by female than by male negotiators (Kray, Galinsky, & Thompson, 2002; Kray, Thompson, & Galinsky, 2001). People experience a stereotype threat when they feel their performance is evaluated on a task in a domain for which they are aware of negative stereotypes about their group’s abilities (Derks, Scheepers, Van Laar, & Ellemers, 2011). For example, female participants who are evaluated on a math test or in a negotiation might experience stereotype threat, due to the stereotypical belief that women are bad at math or in negotiation. Under conditions in which the stereotype threat is neutralized by presenting the negotiation as a learning tool rather than as an assessment tool, or when female characteristics are linked to negotiation success, gender differences diminish or disappear (Kray et al., 2001, 2002). Gender differences also disappear when people negotiate on behalf of another person or party (Amanatullah & Morris, 2010). In that situation, the female stereotypes of caring for others and the negotiation aim align, and male and female negotiators perform equally well.

Stereotype Reactance

Several remedies mitigate this potential disadvantage for female negotiators. First, awareness of stereotype threat can reduce its effects by stereotype reactance. In a study using typical math tests, gender differences disappeared when the test was presented as a problem-solving task rather than a math test, and also when participants received additional information explaining how stereotype threat can interfere with women’s performance on a math test (Johns, Schmader, & Martens, 2005). As such, informing female negotiators that a negotiation might trigger a stereotype threat that might interfere with their performance can help neutralize the stereotype threat and its effects.

Backlash

Backlash is the negative reaction that female negotiators face when they engage in gender-incongruent competitive negotiation behavior (Kulik & Olekalns, 2012). Women can prevent expectancy violations and thus minimize the likelihood of backlash by giving external attributions for competitive behaviors (anticipatory excuses or justifications, such as “my mentor advised me to . . .” or “my association has released a salary survey, and my salary seems to be below average . . .”) or by stressing gender-normative behavior, like using inclusive language (“I am sure we can find a mutually satisfactory agreement”), or influence tactics that indicate warmth and caring (“can you help me to . . .”; Kulik & Olekalns, 2012).

Finally, gender differences tend to diminish when clear instructions to negotiate signal that behaving competitively is not counter-normative. At the individual level, for instance, gender differences disappear when people need to negotiate on behalf of others, a case in point when negotiating is something that a person is supposed to do (Bowles, Babcock, & McGinn, 2005). At a higher level, organizations could, for example, be more transparent about what can or cannot be negotiated, the so-called zones of negotiability (Kulik & Olekalns, 2012), specifying what terms of employment are open for discussion (Bowles, 2012). The bottom line seems to be that normalizing negotiations and negotiating behavior will diminish gender differences.

Power

A general definition of power is the ability to control one’s own and others’ resources and outcomes (Keltner, Gruenfeld, & Anderson, 2003). In negotiation, power is negatively related to dependency: the more powerful party needs the negotiation to a lesser extent than the less powerful party in order to achieve certain outcomes or to satisfy certain needs. Based upon this idea, power in negotiation research is most often operationalized by giving parties a good or a bad BATNA (Giebels, De Dreu, & Van de Vliert, 2000; Magee, Galinsky, & Gruenfeld, 2007; Mannix & Neale, 1993; Wong & Howard, 2017, as described in the section “Negotiation Preparation and Goals”). A good BATNA can be a good alternative offer by another party (Magee et al., 2007), the existence of an alternative negotiation party (Giebels et al., 2000), or the existence of several alternative negotiation parties (Mannix & Neale, 1993). A good BATNA leads to more power in the negotiation; negotiators with a good BATNA are less dependent on the negotiation because they can opt for the alternative to reach a beneficial outcome. Other manipulations of power are role instructions (e.g., boss vs. employee; De Dreu & Van Kleef, 2004), a power priming writing task (Magee et al., 2007), or knowledge about the BATNA (Wong & Howard, 2017).

Ample research shows that equal power between negotiation parties—with both parties having comparable BATNAs—generally leads to more integrative agreements than unequal power between negotiation parties (Giebels et al., 2000; Mannix & Neale, 1993; Wong & Howard, 2017). Other research, however, shows that parties who differ in power achieve better collective outcomes (Pinkley, Neale, & Bennett, 1994; Wei & Luo, 2012). Depending on circumstances, both power equality and power differences can be harmful. Power equality decreases performance if it leads to power struggles (Greer & Van Kleef, 2010), while power differences decrease performance when power disparity is not aligned with task competence (Tarakci, Greer, & Groenen, 2016), or when individualistically motivated power holders exploit weaker counterparts (Giebels et al., 2000; Van Tol & Steinel, 2020). Furthermore, it seems that it is not the asymmetrical BATNA situation per se, but the knowledge about BATNA asymmetry that drives the lower joint outcomes in unequal power situations. By knowing the power advantage, the more the powerful negotiator tends to focus on value claiming, which leads to more judgment errors about the other party, impeding their information sharing and in the end resulting in lower joint outcomes (Wong & Howard, 2017). These findings are supported by earlier research showing that the party who feels or is most powerful in the negotiation, is also more likely to engage in or initiate negotiations, make the first offer (leading to more favorable outcomes for that party), and claim a larger share of the outcomes (Magee et al., 2007; Pinkley et al., 1994).

Interestingly, having no BATNA seems to be more beneficial than having a weak BATNA, because weak BATNAs may function as anchors, influencing negotiators to make less ambitious first offers than those negotiators who have no BATNA at all, who in turn are not influenced by this kind of low anchor and feel more free to make a relatively high first offer (Schaerer, Swaab, & Galinsky, 2015).

Culture

Culture is the unique character of a social group (Brett, 2000), including cultural values about what is important and cultural norms about how to behave (Aslani et al., 2016; Brett, 2000, 2018; Lytle, Brett, Barsness, Tinsley, & Janssens, 1995). Negotiation research concerning culture can be distinguished as intracultural negotiation research or intercultural negotiation research (Gelfand & Brett, 2004; Gunia, Brett, & Gelfand, 2016; Liu, Friedman, Barry, Gelfand, & Zhang, 2012). Intracultural research focuses on negotiations between parties from the same culture, and compares negotiations within one culture to negotiations within another culture—a comparison of French–French negotiations versus U.S.–U.S. negotiations, for example. Intercultural negotiation research focuses on negotiations between parties from different cultures, such as French–U.S. negotiations. Although culture can be defined as the unique character of a social group, most negotiation research concerning culture focuses on different nationalities rather than on specific social groups within or between nations.

Studies on the effects of culture on negotiation allow general assumptions on how specific cultural backgrounds affect negotiators’ behavior. However, not everybody adheres to their cultural characteristics to the same extent, and variations within cultures are large, therefore predictions about individual negotiators require caution (Brett, 2000).

Cultural differences in how people exchange information and how they deal with power are relevant for negotiation processes and outcomes (Hofstede, 2011; Torelli & Shavitt, 2010). Most intra- and intercultural negotiation research focuses on differences concerning information exchange and/or influence and power tactics (Adair et al., 2004; Brett & Okumura, 1998). Information can be shared directly by giving or asking information about preferences and priorities, as in the United States, or indirectly, by proposals and counterproposals, as in Asian countries. The reactions to proposals and the proposals themselves can also give information about a party’s preferences and priorities (Brett, 2000; Gunia et al., 2016). Both types of information sharing can lead to integrative outcomes.

Research has mainly compared Western (mostly Northern American negotiators) to East Asian cultures (e.g., Chinese or Japanese negotiators; Adair et al., 2004; Brett & Okumura, 1998; Tinsley, 1998; Tinsley & Pillutla, 1998). These cultures differ on several dimensions, with the United States being more individualist, low context, and egalitarian, and East Asian cultures generally being more collectivistic, high context, and hierarchical (Adair et al., 2004). These cultural differences have several consequences. For example, negotiators from low-context cultures in which communication is explicit and direct are more likely to use direct rather than indirect information sharing. Also, parties from more egalitarian cultures might pay less attention to power or status differences between the negotiating parties than counterparts from more hierarchical societies. Higher-status negotiators from these societies may interpret this as a lack of respect and react by using their power or competitive strategies.

From the 2010s, the cultural logic approach (Leung & Cohen, 2011) has been introduced into the field of negotiations (Aslani et al., 2016; Brett, 2018; Gunia et al., 2016; Shafa, Harinck, Ellemers, & Beersma, 2015). This approach distinguishes three different cultures: dignity, honor, and face cultures. In dignity cultures every person has an equal amount of inherent worth that does not depend on the opinions of others. Most Western societies are dignity cultures. In honor cultures, on the other hand, a person’s worth depends on the extent to which the person adheres to the honor code in that person’s own eyes and in the eyes of others. Honor cultures exist in the Middle East and in the southern United States. And finally, in face cultures there are stable hierarchies and people have face as long as they fulfill their duties and obligations accompanying their position in the hierarchy. Face cultures are found in East Asia (Leung & Cohen, 2011). The first results using this categorization show that, in intracultural negotiations, parties in dignity cultures use more (direct) information sharing and less competitive influencing behaviors compared to honor and face cultures. Also, dignity cultures are more likely to reach win–win agreements, and to reach a more equal division of outcomes between the parties compared to honor and face cultures (Aslani et al., 2016).

Figure 3 displays a model of intercultural negotiation (Brett, 2000). It posits that cultural values influence parties’ interests, preferences, and priorities. As such, different cultural values can determine the integrative potential in the negotiation and whether and where profitable trade-offs are possible. On the other hand, cultural norms influence parties’ negotiation behaviors and strategies, so combinations of different cultures can lead to specific interactional patterns. Both the existence of different preferences and priorities and the interaction pattern influence the final outcomes of the intercultural negotiation. Cultural intelligence, defined as a person’s capability to successfully adapt to new cultural settings, has been shown to increase a negotiator’s effectiveness in intercultural negotiations (Imai & Gelfand, 2010).

Figure 3. How Culture Affects Negotiation.

Source: Brett (2000).

Negotiations within and between Groups

Much of the empirical laboratory research into negotiation processes and outcome has investigated a basic situation in which two parties, both representing their own interests, negotiate with each other. Some studies have investigated situations that are more socially complex, for example with the conflict being between groups rather than individuals (i.e., intergroup negotiation), sometimes with individuals representing their constituent group (i.e., representative negotiation) or with several negotiators representing each side (i.e., team negotiation), or with negotiations involving more than two parties (i.e., multiparty negotiation). Some 21st-century studies have shed light on the increased social and procedural complexities in these negotiation settings.

Intergroup Negotiations

Intergroup negotiations are typically conducted by representatives (Walton & McKersie, 1965)—negotiators who represent the group, pursuing not just their own personal interests but also the interests of their constituents. Representatives often negotiate more competitively than people who negotiate on their own behalf, as they tend to think that their constituency favors a competitive approach (Benton & Druckman, 1974). The extent to which representatives stick to the group norm (or what they think the groups wants) depends on their need to secure group membership. Representatives who occupy marginal positions in attractive groups seek to demonstrate their belongingness to the group, and they therefore behave more competitively toward an opposing player than representatives who hold central positions in their group (Van Kleef, Steinel, Van Knippenberg, Hogg, & Moffitt, 2007). Similarly, representatives with an insecure position in their group follow the group norm more strictly—the more so the higher their dispositional need to belong to the group (Steinel et al., 2010). Group norms, however, are not always clear. Constituencies may consist of different individuals—some are hawks, preferring a competitive stance toward the opposing group, while others are doves, favoring cooperation with the opponents. The attention-grabbing power of hawkish messages renders even a minority of hawks in a constituency more influential than doves (Aaldering & De Dreu, 2012; Steinel, De Dreu, Ouwehand, & Ramirez-Marin, 2008). Another way for constituencies to influence group negotiations is by selecting their representative, a choice that groups make depending on the purpose of the negotiation. When negotiations are identity-related (e.g., about moral issues), groups favor representatives who represent their group norms, or are more extreme than their own group, and as distant as possible from the opposing group. When negotiation are instrumental (i.e., when attaining a favorable outcome is central), however, groups prefer negotiators who deviate from the group norms in a way that brings them closer to the norms that the opposing group holds (Teixeira, Demoulin, & Yzerbyt, 2010).

Multiparty Negotiations

Multiparty negotiations differ from interactions between two negotiators in several respects. As every party brings goals, interests, and strategies to the negotiation table, group negotiations are more demanding on information-processing capacities (Beersma & De Dreu, 2002). Furthermore, team negotiations differ from dyadic negotiations, because they occur in a social environment similar to group decision-making, characterized by increased social complexity. Group dynamics depend largely on the goals that individual group members pursue—does everyone try to maximize their individual outcomes, or does the group strive to maximize collective outcomes? Groups which pursue a common goal reach more integrative agreements because they trust each other more and exchange more information than teams of people who pursue their individual goals (Weingart, Bennett, & Brett, 1993). Finally, the increased number of negotiators results in procedural and strategic complexity. A way to deal with these complexities is by installing decision rules that specify how to transform individual judgments into a group judgment. Under unanimity rule, every group member can use their veto power to make sure that their interests are recognized in an agreement. Under majority rule, however, team members whose interests are aligned can form a coalition and neglect the needs of minority members with opposed preferences, which is particularly likely and harmful to the collective outcome when group members pursue their individual goals rather than pursuing a collective goal (Beersma & De Dreu, 2002).

Team Negotiation

Team negotiation becomes increasingly complex when team members have different preferences and priorities on some of the conflict issues. Subgroup formation can occur and reduce the groups’ ability to implement beneficial trade-offs, if groups in team negotiations are not unitary teams where all members share the same preferences, but instead some team members have preferences that align better with the preferences of (some members of) the opposing group (Halevy, 2008). Subgroup conflict can also have positive effects, as it challenges fixed-pie perceptions and thus increases team members’ motivation to form an accurate understanding of the situation (Halevy, 2008).

Motivated Information Processing

Social Motives

Several of the studies mentioned in the section “Multiparty Negotiations” relate to one of the strongest determinants of negotiation processes and outcome—social motives (e.g., Beersma & De Dreu, 2002, De Dreu, Nijstad, & Van Knippenberg, 2008; Weingart et al., 1993). Social motives are preferences for certain distributions of value between oneself and others, which can be rooted in a person’s character (social value orientations; Van Lange, Otten, De Bruin, & Joireman, 1997) or engendered externally. A bonus system based on individual performance, for example, would give rise to individualistic motivation, while a bonus system that rewards the collective performance of a work team would spur more prosocial motivation. Pro-self negotiators aim to maximize their individual outcomes and tend to see negotiations as competitive interactions in which power and individual success are important. Prosocial negotiators, on the other hand, strive for equality and high collective gains, and tend to see negotiation as a cooperative endeavor in which fairness and morality are central (De Dreu et al., 2008).

Epistemic Motivation

The Motivated Information-Processing in Groups Model (De Dreu et al., 2008) states that win–win agreements are more likely when negotiators are prosocially motivated, because this leads to more trust, information exchange, and problem-solving behavior. Importantly, apart from a prosocial motivation, integrative agreements also require a high epistemic motivation, that is, the desire to form an accurate understanding of the situation. Negotiators with a high epistemic motivation make use of the information they exchange and find options to create value, for example by exchanging mutually beneficial concessions. Negotiators with a low epistemic motivation make suboptimal compromises instead. Epistemic motivation is fostered, for example, when negotiators are process accountable—the need to explain or justify their behavior motivates them to think carefully. Epistemic motivation is reduced, for example, when time pressure makes people prefer rules of thumb and other mental shortcuts over a careful appraisal of the available information.

Time Pressure

Time pressure can be beneficial and detrimental to negotiation performance. On the one hand, time pressure impairs negotiators’ decision-making, because it reduces epistemic motivation and leads to shallow information processing (De Dreu et al., 2008). Time pressure may also lead to impasses, when negotiators have insufficient time to craft mutually acceptable or even beneficial agreements. On the other hand, time pressure may also motivate negotiators to reach a deal quickly, increase their willingness to make concessions, help overcome positional bargaining, and increase negotiation efficiency (Moore, 2004).

Time pressure can be the result of time costs or of deadlines. Time costs are the costs of delaying an agreement, for example legal costs in a dispute or loss of income before a joint venture is agreed upon. Having higher time costs than one’s opponent (e.g., having a more expensive lawyer than the other party) is a weakness in negotiations, as the party with high time costs is more dependent on settling the conflict quickly, while the party with low time costs can afford to extend the negotiations and wait for the counterpart to concede.

Many negotiators misunderstand the implication of unilateral deadlines on the power balance between negotiators and see deadlines as a weakness, too: negotiators who have a deadline that their opponent is not aware of tend to keep this deadline secret, being afraid that they would otherwise reveal their weakness. Negotiators who learn about a counterpart’s deadline often try and stall the negotiation in an attempt to receive concessions. Unlike time costs, however, the deadline that one party has is a mutual constraint to both parties—if no deal is made before the deadline, both parties fall back on their BATNA. If both negotiators understand that a deadline is a mutual constraint, the time pressure resulting from the deadline can be beneficial, as negotiators need to work efficiently toward a deal (Moore, 2004).

Communication Media

As negotiating through e-mail or videoconferencing is becoming more and more common, the question of how communication media, and in particular the richness and synchrony of communication channels, affect negotiation processes and outcomes is key. The communication orientation model (Swaab, Galinsky, Medvec, & Diermeier, 2012) posits that the benefit of richer channels (i.e., those that offer sight and sound, as compared to only text, and synchronicity of communication rather than a delayed back-and-forth messaging) depends on the negotiators’ orientation to cooperate or not, such that richer channels increase the achievement of high-quality outcomes for negotiators with a neutral orientation. The richness of channels matters less for negotiators with a cooperative orientation. For negotiators with a non-cooperative orientation richer communication channels can even be detrimental.

An important side note to our knowledge of the effects of communication media in negotiation, however, is that technology has been changing rapidly since 2010—with the invention of forward-facing cameras on smartphones and applications like Skype, negotiators nowadays are much more familiar with videoconferencing than the participants of earlier studies, on which most of our knowledge is based. It is reasonable to assume that the utility of any communication medium depends on the familiarity and comfort of the user (Parlamis & Geiger, 2015).

Conflict Issues

An important moderator of negotiation processes and conflict management is the conflict issue—what the conflict is about. Research on conflict issues generally distinguishes between resource-based conflict and value-based conflict (Druckman, Broome, & Korper, 1988; Druckman, Rozelle, & Zechmeister, 1977; Harinck & Ellemers, 2014; Harinck, De Dreu, & Van Vianen, 2000; Stoeckli & Tanner, 2014; Wade-Benzoni et al., 2002). Resource-based conflict concerns conflict about scarce resources such as time, money, or territory. Value-based conflict concerns conflict about norms, values, and personal opinions, such as political preferences or rules of behavioral conduct—what is morally good or bad, and what is (un)acceptable behavior? Although other types of conflict can be distinguished, such as power struggles, status conflict, or informational conflict (who is right concerning a factual issue?), most conflict issue research has focused on the two large categories of resource-based and value-based conflict.

Conflict issue matters for negotiators’ behaviors, cognitions, emotions, and perceptions, and for the outcomes negotiators achieve. For negotiation behaviors and outcomes, it is shown that value-based conflicts are harder to solve via negotiation and often lead to less than optimal agreements than resource-based conflicts (Harinck & De Dreu, 2004; Harinck et al., 2000; Pruitt & Carnevale, 1993; Wade-Benzoni et al., 2002). While scarce resources can be divided by the give and take of traditional negotiation, people hesitate to give in on one topic in order to gain on another topic when the conflict concerns values. For example, pro-environmentalists are not going to agree on oil drilling in Alaska in exchange for a boycott on oil drilling in a Navajo reserve. Those “taboo trade-offs”—trading off values either against other values, or for money, such as selling a child—raise moral outrage, and are considered unacceptable (Tetlock, Kristel, Elson, Green, & Lerner, 2000).

In several studies, negotiations between participants assuming the role of attorneys were framed as value-based conflict (determining a penalty that serves justice) or resource-based conflict (determining a penalty that serves the personal position of the attorney). In resource-based conflicts, as compared to value-based conflicts, more trade-offs between topics (logrolling; as described in the section “Outcomes of Negotiations”) occurred and led to better negotiation agreements, including win–win agreements (Harinck & De Dreu, 2004; Harinck et al., 2000). Different types of conflict have been found to affect the degree of negotiators’ satisfaction with integrative agreements. In resource-based conflict, negotiators were more satisfied with win–win agreements obtained by trade-offs than with objectively worse 50–50 compromises. In value conflicts, however, negotiators were more satisfied with the 50–50 compromises than with the win–win agreements that entailed trade-offs. In value-based negotiation, people seem to prefer compromise agreements in which both parties have to give in rather than an objectively better agreement that would include a value trade-off (Stoeckli & Tanner, 2014).

The conflict patterns differ between resource- and value-based negotiations as well. In resource-based negotiations, parties often start with a strong fixed-pie perception (Thompson & Hastie, 1990) and a concomitant competitive stance. After a while, when they realize that they might need to negotiate with the other party in order to reach any agreement at all, they become more flexible and less competitive and start making concessions. In value-based negotiations on the other hand, people initially expect other people to share their ideas. Once they realize the other party does not, they expect opposition and perceive less common ground than people in resource-based negotiations (Harinck & De Dreu, 2004; Harinck et al., 2000), which results in a less cooperative approach. It matters whether negotiation situations are framed as resource- or value-based conflicts, because negotiators perceive less common ground between themselves and the other party, and consider agreements less likely in the value-based conflicts compared to the (same-topic) resource conflicts. Moreover, personal involvement and feelings of being threatened are stronger in value-based than resource-based conflicts (Kouzakova, Ellemers, Harinck, & Scheepers, 2012; Kouzakova, Harinck, Ellemers, & Scheepers, 2014).

Current Developments

Research in negotiation and bargaining is thriving not only in (social) psychology, but also in management and communication science and (experimental) economics, and is becoming interdisciplinary. Globalization and digitalization have connected people all over the world more than ever before. In order to handle conflict, solve urgent global problems (like climate change or migration), and create collaboration and business opportunities, our connected world requires an understanding of conflict within and across different cultures.

Interaction among Gender, Power, and Culture

More research into dignity, honor, and face cultures and into the interaction among power, gender, and culture is needed. Commendably, in the 2000s, more and more research investigating the interaction between gender, power, and culture has been conducted. Evidence has accumulated that gender differences can be power differences in disguise (Galinsky, 2018), power differences may play out very differently depending on the culture in which the negotiation takes place, and gender roles (including acceptable and unacceptable behaviors) may differ across cultures. There are some studies investigating combinations of power and gender (Hong & Van der Wijst, 2013; Nelson, Bronstein, Shacham, & Ben-Ari, 2015), power and culture (Kopelman, Hardin, Myers, & Tost, 2016), or gender and culture (Elgoibar, Munduate, Medina, & Euwema, 2014), but a more elaborate and systematic investigation of these combinations in intra- and intercultural negotiation research is needed in our currently increasingly diversifying societies, in which men and women from all over the world need to work, and thus negotiate, with each other.

Communication Processes

Other emerging topics of research relate to communication processes during conflict and negotiation, including silences (Jared Curhan, Yeri Cho, Teng Zhang, & Yu Yang, in Hart et al., 2019), or asking questions in negotiations, in particular the willingness to ask sensitive questions (Einav Hart & Eric VanEpps, in Hart et al., 2019) or the effect of deflecting direct questions. Deflecting a direct question that a person does not want to answer (“What did you earn in your latest job?”) with a counter-question (“Would you like to offer me a job then?”) has been found to be better for interpersonal and economic outcomes than refusing to answer the question or giving an evasive answer (Bitterly & Schweitzer, 2020). The use of humor in negotiations is also under investigation. Humor can decrease the credibility of a person’s statements or disclosures, which has implications as to when a person should or should not use humor in negotiations (Bitterly & Schweitzer, 2019).

Ethics and Deception

Ethical questions that arise in negotiation are mostly related to truth-telling and deception (Lewicki et al., 2021; Robinson, Lewicki & Donahue, 2000). Deception is the topic of a growing body of research. Earlier studies focused on the antecedents of deception and found that negotiators are more likely to deceive when stakes are high (Tenbrunsel, 1998), when they know that the other negotiator lacks information (Croson, Boles, & Murnighan, 2003), when they aim to maximize their individual rather than the collective gains (O’Connor & Carnevale, 1997), when they expect their counterpart to be competitive rather than cooperative (Steinel & De Dreu, 2004), or when the counterpart is a stranger rather than a friend (Schweitzer & Croson, 1999) or angry rather than happy (Van Dijk et al., 2008). Research focus is shifting toward processes and consequences of various types of deception, such as informational or emotional deception, and, depending on whether the deception is detected, its consequences for the deceiver, the target, and third parties (Gaspar, Methasani, & Schweitzer, 2019).

Neurobiological Processes

Neurobiological processes are also increasingly becoming a focus of research. Negotiation behavior and outcomes are influenced by hormones such as oxytocin (e.g., De Dreu et al., 2010) or cortisol (e.g., Akinola, Fridman, Mor, Morris, & Crum, 2016; De Dreu & Gross, 2019; Harinck, Kouzakova, Ellemers, & Scheepers, 2018). Increased cortisol levels can be beneficial for outcomes in salary negotiation, but only when people experience their higher levels of arousal (due to higher levels of cortisol) as beneficial; otherwise, they are detrimental (Akinola et al., 2016). Other research has focused on brain activity (e.g., Weiland, Hewig, Hecht, Mussel, & Miltner, 2012) and other physiological activity such as pupil dilatation (De Dreu & Gross, 2019). Until now, most of this research has been done in relatively content-free experimental game settings (De Dreu & Gross, 2019), but gradually similar measurements are getting introduced in more naturalistic negotiation experiments (Akinola et al., 2016; Harinck et al., 2018).

Personality

Personality effects are making a comeback on the research agenda. As experiments have revealed little or no effects of various aspects of personality on negotiation behavior, “many authors have reached the conclusion that simple individual differences offer limited potential for predicting negotiation outcomes” (Bazerman et al., 2000, p. 281). In 2013, this widely held irrelevance consensus was challenged by a meta-analysis that revealed that personality traits did predict various negotiation outcome measures (Sharma et al., 2013). For example, cognitive ability predicts negotiation outcomes, and extraversion and agreeableness predict subjective outcomes. The effects of personality factors on negotiation behavior and outcomes are stronger in field settings than in laboratory experiments, as in the latter case behavioral options are restricted due to the strong demand characteristics of the situation and a focus on short-term economic outcomes in interactions between unacquainted experimental participants. Personality is more likely to affect behavior in negotiation situations that are not affected by the clearly defined norms common to laboratory studies, suggesting that the irrelevance consensus was a result of limited data (Sharma et al., 2013). More research into negotiation in naturalistic settings will help us understand how personality and situational factors interact to predict negotiation and bargaining behavior. Brett’s (2000) model, presented in Figure 3, with the terms “culture” replaced by “personality,” could serve as guiding framework for this re-emerging line of research.

Negotiation and bargaining are thriving research areas. The increasing globalization and concomitant societal developments steer research into new directions of culture and gender, while at the same time technological developments enable researchers to investigate negotiation behavior and communication in more advanced and sophisticated ways. The findings and advice that result from this research will help people across the world to deal effectively with their differences and enable them to create solutions and agreements that are profitable for all parties involved.

Further Reading

  • Galinsky, A. D., & Schweitzer, M. (2015). Friend and foe: When to cooperate, when to compete, and how to succeed at both. New York, NY: Penguin Random House.
  • Gelfand, M. J. (2018). Rule makers, rule breakers: How tight and loose cultures wire our world. New York, NY: Scribner.
  • Malhotra, D. (2016). Negotiating the impossible: How to break deadlocks and resolve ugly conflicts (without money or muscle). Oakland, CA: Berrett-Koehler.
  • Van Kleef, G. A. (2016). The interpersonal dynamics of emotion: Toward an integrative theory of emotions as social information. Cambridge, UK: Cambridge University Press.

References