Determinants of bargaining behavior in a bilateral monopoly situation II: Opponent's concession rate and similarity

Abstract

This study investigates the process by which one member of an interpersonal system adjusts his expectations for the other's behavior on the basis of the other's concession rate and his perceived similarity. The process was explored in a bilateral monopoly situation where subjects, 52 eighth grade boys, assumed the role of buyer bargaining against sellers who were simulated according to a prearranged program. Strong effects were produced by both manipulations. As sellers became increasingly tough, buyers became increasingly soft. Increasing seller softness, on the other hand, resulted in no change in buyer softness. The former subjects expected larger seller concessions than they received; the latter predicted seller concessions accurately and conceded proportionately. Similar sellers elicited more buyer softness and more trials to agreement than dissimilar sellers. Internal data analyses revealed two types of bargainers in the high similarity condition: those who increased and those who decreased their level of softness in the final phase of bargaining. Additional evidence suggested that the latter subjects' behavior could be explained in terms of a disappointment in expectations caused by the nonreciprocating opponent and by their own previous high level of softness. The results are considered to have implications for a wider class of social situations involving both mutuality and opposition of interests.