Third Party Power: Some Negative Effects of Positive Incentives

Abstract

The present study simulated an organizational dispute to examine the effects of reward and coercive third party power on negotiator concessions and negotiator perceptions of the third party. The results indicated that the possibility of third party rewards inhibited negotiator concessions, and the possibility of third party punishments facilitated concessions. This effect was enhanced by negotiator limit. When negotiators had high limits, they made the fewest concessions if the third party could compensate; when negotiators had low limits, they made the greatest concessions if the third party could press. Taken together, the results suggest that negotiators sometimes use concession making as a strategy to affect third party behavior. When negotiators want third parties to provide compensation, as when they have high limits, they reduce their concession making as a way of eliciting the compensation; when they want to avoid third party behavior that is punitive, and they have low limits and room to make concessions, they hasten their concessions to reach agreement quickly and thereby stem the third party's involvement.