Bargaining Tactics Research Articles

Negotiating in Distributive Bargaining Scenarios: The Effect of Sharing One’s Alternative

ABSTRACT This study examined negotiation outcomes following a distributive bargaining task where individuals communicated in dyads for the purchase of a hypothetical product. We used an experimental manipulation to examine the impact of sharing one’s alternative on bargainers’ final negotiated price both directly and indirectly through their partners’ one-sided negotiation tactics. After negotiating, participants in 92 dyads reported their results and provided information about their communication behaviors while bargaining. Using a dyadic mediation model, results revealed that when Buyers shared their alternatives with Sellers, they settled for higher prices compared to when Buyers did not. This outcome was the function of a direct effect of sharing on the final price, and an indirect effect through Sellers’ use of one-sided bargaining tactics.

How Has Takeover Competition Changed Over Time?

Since the boom in takeovers in the 1980s, research in both law and financial economics has debated the role of takeover impediments such as poison pills, staggered boards, and state antitakeover laws. Have these impediments entrenched target management to the detriment of shareholders? Or have they increased the bargaining power of target boards of directors and left shareholders, if not better off, then at least unharmed?In their study published recently in the Journal of Corporate Finance, the authors provide new answers to these questions with a detailed analysis of takeover competition during the period 1981 through 2014. Using a random sample of 388 completed and withdrawn deals from this 34‐year period, the authors begin by confirming the already well‐documented increase in the use of takeover impediments over time. They then report evidence that takeover competition has not declined during this period.First of all, takeover premiums—the average percentage over market paid by acquirers to consummate transactions—have remained steady over time. Second, and the most striking of the authors' findings, is that the corporate auction process has “gone underground” since the 1980s. Although we now see fewer hostile attempts and publicly reported takeover bidding contests, the amount of competition for targets has remained largely unchanged when one takes account of “private” as well as public auctions—that is, contests that, as the authors discovered, included unidentified bidders.The authors view such a fundamental change in the takeover auction process as a response to the widespread growth of takeover impediments. In this sense, as Bill Schwert commented years ago, “hostile takeovers are less about shirking target management than about the bargaining tactics of targets and bidders.” Or as the authors put it, “the greater bargaining power provided by state laws and other takeover impediments has changed the manner in which takeover auctions are conducted,” but without greatly affecting the goal of economic efficiency that such transactions are designed to help bring about.

The Case for a Trial Fee: What Money Can Buy in Criminal Process

Money motivates and regulates criminal process. Conscious of adjudication costs, prosecutors incentivize guilty pleas with the prospect of a “trial penalty”—harsher post-trial sentences. Budgetary considerations motivate revenue-generating enforcement policies and asset forfeitures by law enforcement. States also charge defendants directly for nearly every criminal justice expense through mandatory fees, which can burden decisions to exercise rights. Additionally, defendants can pay for optional advantages. Right-to-counsel doctrine protects the right to pay for more and better legal assistance than the state is obligated to provide. Paying bail yields pretrial liberty. Diversion programs, for a fee, can supplant ordinary prosecution. Some defendants can choose their sentence—a fine or jail. But these opportunities are not available to all; their costs need not match one’s ability to pay. To examine roles and rules of money in criminal process, this paper considers the case for an optional criminal trial fee. Defendants who pay it would directly cover public litigation costs, which would leave the state indifferent, as a budgetary matter, between trials and guilty pleas. In return, defendants would get a penalty-free trial limited to the terms of a proffered plea bargain. The fee proves a useful device because its rationale and effects accord with entrenched precedents and policies, not least in how it extends the justice system’s differential treatment based on wealth. Yet the trial fee also promises positive effects. It would reduce prosecutors’ most-criticized bargaining tactics—excessively harsh trial penalties—without undermining bargaining’s important secondary functions, enlisting informants to cooperate and rewarding defendants who accept responsibility for their crimes. And even a modest increase in fee-financed trials would yield other benefits, such as citizen participation in applying criminal law and supervising government officials, and more data about “the shadow of trial” in which bargaining takes place

Debt, dignity, and defiance: why Greece went to the brink

Early in 2015, the new Greek government, led by the left-wing SYRIZA party, refused to complete the second bailout program and insisted on further debt relief. This defiant stance entails a puzzle for rational-choice explanations that focus on expected economic utility: when SYRIZA came to power, the Greek economy had resumed modest growth, while its foreign creditors had extended debt maturities and hinted at the possibility of more debt restructuring in the future. Hence, there seemed no immediate need to force the issue. Furthermore, it appeared very likely that the incoming administration's demands would be rejected by some of the creditors, each of whom wielded effective veto power. In fact, weeks before the final showdown, George Tsebelis, a leading expert in the field of EU governance, had correctly predicted that Athens was set for a dramatic climb-down. This article argues that the Greek government's bargaining tactics were neither a rational answer to the country's economic predicament nor a necessary response to domestic constraints. Instead, moral emotions and status sentiments played a decisive role. The administration's overconfident defiance was strongly influenced by anger at Greece's alleged humiliation at the hand of its creditors.

Rent-seeking and surplus destruction in unanimity bargaining

In non-cooperative bargaining games in the tradition of Rubinstein, the proposer's bargaining power stems from the prospect of a delay in case of disagreement. Since players are impatient, this delay is costly for everyone. We consider a unanimity bargaining game in which the proposer can strategically choose the length of this delay. We assume that the size of the surplus depends endogenously on the chosen length of the prospective delay. Intuitively, the proposer faces the following trade-off: The more he exploits his proposer power, the smaller is the surplus that can be divided. One interpretation is that aggressive bargaining tactics hurt the fruitful cooperation among players, and thus the surplus. We characterize stationary equilibrium strategies and payoffs, and obtain sharp predictions on the extent of surplus destruction, the size of the social loss, and the surplus allocation.

The four horsemen of power at the bargaining table

PurposeThis paper aims to identify and discuss four major sources of power in negotiations.FindingsThe four sources of power are alternatives, information, status and social capital. Each of these sources of power can enhance a negotiator’s likelihood of obtaining their ideal outcome because power allows negotiators to be more confident and proactive, and it shields them from the bargaining tactics of their opponents.Practical implicationsThe paper discusses how negotiators can utilize each source of power to improve their negotiation outcomes.Originality/valueThe paper provides a parsimonious definition of power in negotiations, identifies the four major sources of negotiator powers and highlights two pathways by which power affects negotiation outcomes.

How Has the Corporate Takeover Market Changed Over Time?

Since the boom in takeovers in the 1980s, research in both law and financial economics has debated the role of takeover impediments such as poison pills, staggered boards, and state antitakeover laws. Have these impediments entrenched target management to the detriment of shareholders? Or have they increased the bargaining power of target boards of directors and left shareholders, if not better off, then at least unharmed?. In their study published recently in the Journal of Corporate Finance, the authors provide new answers to these questions with a detailed analysis of takeover competition during the period 1981 through 2014. Using a random sample of 388 completed and withdrawn deals from this 34‐year period, the authors begin by confirming the already well‐documented increase in the use of takeover impediments over time. They then report evidence that takeover competition has not declined during this period. First of all, takeover premiums—the average percentage over market paid by acquirers to consummate transactions—have remained steady over time. Second, and the most striking of the authors' findings, is that the corporate auction process has “gone underground” since the 1980s. Although we now see fewer hostile attempts and publicly reported takeover bidding contests, the amount of competition for targets has remained largely unchanged when one takes account of “private” as well as public auctions—that is, contests that, as the authors discovered, included unidentified bidders. The authors view such a fundamental change in the takeover auction process as a response to the widespread growth of takeover impediments. In this sense, as Bill Schwert commented years ago, “hostile takeovers are less about shirking target management than about the bargaining tactics of targets and bidders.” Or as the authors put it, “the greater bargaining power provided by state laws and other takeover impediments has changed the manner in which takeover auctions are conducted,” but without greatly affecting the goal of economic efficiency that such transactions are designed to help bring about.

School Administrators’ and Teachers’ Opinions about Influencing Each Other

<p style="text-align:justify">In this study, it were aimed to determine how the secondary school administrators and teachers influence each other. The data was collected from 18 school administrators and 20 teachers. The sample of the study consisted of secondary school administrators and teachers working at Ankara, Kiriklale, Kirsehir, Konya, Mugla, Izmir, Mus, Bursa, Izmit, Istanbul city centers, Turkey. The data in the study were collected through semi-structured interviews. Semi-structured interview forms including six questions were developed for based on the sub-objectives Kipnis ve Schmidt’s classification, which are set as a) friendliness, b) reason, c) bargain, d) coalitions, e) assertiveness, f) higher authority and g) sanction. According to the results of the study, while teachers use friendliness, reasoning and bargaining tactics to influence their managers. They use coalitions tactics at least. On the other hand, while school administrators use friendliness, bargaining and coalition tactics and they use assertiveness tactic at least.</p>

Values as Barriers to Compromise? Ideology, Transnational Coalitions, and Distributive Bargaining in Negotiations over the Third Greek Bailout

What factors explain the brinkmanship and threats of Greece’s distributive tactics over the third bailout package in 2015? Examining negotiations between Greece and its creditors duringsyriza’s (Coalition of the Radical Left) tenure in power, I argue that the Greek government’s strong ideological fervor turned the bailout negotiations into an ideologically based dispute, which involved “sacred” value biases and uncompromising posturing. Unable to form cooperative transnational coalitions, Athens increasingly turned to distributive bargaining tactics that antagonized creditors and escalated the conflict. The article highlights how values act as barriers in bailouts and has implications for the study of intergovernmental negotiations in the European Union.

Concessions Dynamics in Electronic Negotiations: A Cross-Lagged Regression Analysis

We analyze concession patterns in electronic negotiations using a modified version of the Actor–Partner Interdependence Model (APIM). Our extension of the APIM takes into account that concessions in negotiations can only be evaluated in terms of utilities of the receiving side. We show that actor and partner effects in that model can directly be related to central concepts of negotiation theory such as cooperative versus distributive bargaining tactics and reciprocity. Based on this connection, we formulate hypotheses on the differences of actor and partner effects between successful and failed negotiations. We test these hypotheses on two existing data sets. Results show consistent and strong actor effects, while partner effects are only present in specific settings.

Ignorance is not Bliss: Why States Should Adopt California's Independent Counsel Requirement for the Enforceability of Prenuptial Agreements

Prenuptial agreements are gaining popularity among Americans as an effective means of financial protection in the event of death or divorce. It is widely accepted that prenuptial agreements merit additional procedural and substantive fairness requirements. However, states have very different requirements for enforcement, and courts often enforce agreements despite the use of unfair bargaining tactics. Requiring the advice of independent counsel ensures that the parties to a prenuptial agreement are aware of the terms of the agreement and demonstrates to the court that it was executed voluntarily. While independent counsel is often one factor that courts consider when examining procedural fairness, it is not a dispositive factor in the majority of states. In order to promote enforceability, create more predictable outcomes, and achieve greater equality in the bargaining process, this Note proposes that states adopt California's statutory provision, or a similar standard, which requires that the party against whom enforcement is sought obtained independent legal counsel prior to the execution of the agreement. In order to preserve the freedom of contract, the statute includes a waiver provision, which allows a party to waive the right to independent counsel as long as that party is fully informed, typically by the other party's lawyer, of the basic terms and effect of the agreement and the rights and obligations he or she is giving up by signing it. Key Points for the Family Court Community Prenuptial agreements differ from ordinary commercial contracts because the parties do not deal at arm's length with each other. States have varying procedural and substantive fairness standards for prenuptial agreements, but many do not provide sufficient protection for vulnerable parties. California requires independent counsel, or waiver, to find that a prenuptial agreement has been voluntarily executed. By adopting an independent counsel requirement like California's, states can ensure informed consent and bargaining equality, while promoting enforceability and predictability.

Collective Bargaining and the Gender Pay Gap in the Printing Industry

This paper considers the effect of collective bargaining on the gender pay gap in the printing industry. This sector was subject to multi‐employer bargaining for around 90 years, until 2010. The article analyses gendered collective bargaining processes through the mechanism of symbolic power, that is, the power of interpretation and definition, and utilizes Walton and McKersie's seminal work on bargaining behaviour to understand the processes that have prevented the closing of the pay gap. It finds that symbolic power operates within the sub‐processes of attitudinal structuring and intra‐organizational bargaining to de‐legitimize women's role in equal pay bargaining, alongside distributive bargaining tactics that preclude equal pay bargaining, thereby creating the impression that women are irrelevant to bargaining processes and ensuring relative invisibility for issues of importance to equality bargaining.

Collaborative Divorce Unknown, Unwanted, or Unneeded? The Underwhelming Advance of a Promising Solution in Marriage Dissolution

The traditional model of modern divorce in America involves a lengthy, often toxic, and frequently painful procedure. Divorces drag on for months or years, leaving the parties emotionally and financially drained and, as is too often the case in legal battles, the only people who truly win are the attorneys. The final judgment often marks the effective end of the divorcing parties’ contacts with each other, leaving little to no recourse for future negotiation, making it important to use the most aggressive bargaining tactics possible. Adversarial proceedings compel each side to play their cards close to their chests, as any ground tentatively yielded is likely to be lost forever. Parties’ secrets and shortcomings are publicly trumpeted in the courtroom, sometimes in embarrassing detail. Put simply, divorce can be brutal. In addition to its harsh and unforgiving nature, traditional divorce finds the divorcees in a pitiable state: spouses often have little awareness of what the process will entail, both procedurally and psychologically, before they enter into it. This unfamiliarity can breed fearfulness about the future, leading to a fight or flight mentality, where the parties experience a kind of tunnel vision where they forget the big picture and, focusing on minutiae, make mistakes that can harm their families or themselves. When focused on financial matters, for example, a divorcing spouse might leave off important decisions regarding children, or vice versa. In contrast, a battle-weary spouse might focus too little on important matters and, in an attempt to just be done with the divorce, concede too much to the other side. Plainly, traditional divorce is a minefield. But must it always be so? A sizeable cohort of family law attorneys protest to the contrary, having embraced a new divorce process, called collaborative divorce, that shuns the gladiatorial practices of traditional divorce and aims for a more amicable and equitable parting, one that leaves the door open for healthy future relationships between divorcing parties and their families.Surprisingly, collaborative divorce is still something of a fringe element in family law. Why has it failed to make larger inroads into the mainstream? Some suspect that close-minded, self-interested professionals in the divorce business oppose collaborative divorce. Others claim that collaborative divorce is simply not as good as its proponents purport it to be. Still others seem to have recognized, perhaps only tacitly, that to embrace collaborative divorce might even undermine the necessity of involving attorneys in divorce proceedings.This Article examines these claims in four Parts. Part I defines collaborative divorce and examines its history and growth. Part II describes certain advantages and disadvantages attending collaborative divorce, contrasting these advantages and disadvantages with those of traditional divorce and mediated divorce. Part III explores collaborative divorce’s slow growth and posits certain reasons why it might never meet traditional divorce’s popularity. Part IV proposes reasons why collaborative divorce might, if encouraged, benefit society, and sets forth additional steps that legislatures, courts, and judges could take that would increase public access to collaborative divorce.

Group Reactions to Dishonesty

This paper compares groups and individuals in terms of their willingness to incur financial costs in order to punish dishonest behavior. Study 1 shows that the use of dishonest bargaining tactics i...

Unions and Collective Bargaining in 2011

In 2011, Australian unions successfully extended collective bargaining in some quarters while, in others, they engaged in lengthy industrial campaigns. At the heart of a number of these campaigns lay the issue of job security and controls over staffing. The challenge to managerial prerogative prompted some unforeseen actions, including lockouts, by employers, the most dramatic example being seen at Qantas. Unexpectedly, this also included an employer preference for arbitration not previously seen under the Fair Work Act 2009. Union activity to increase union density remained a challenge, with the Australian Council of Trade Unions shifting to a campaigning focus in an attempt to identify salient issues confronting members. Relations with the federal government were overall fairly positive, in particular, with some advances made in the area of occupational health and safety. This was in contrast to relations with a number of state governments as a result of their bargaining tactics and strategies.

Wind Development of Oaxaca, Mexico's Isthmus of Tehuantepec: Energy Efficient or Human Rights Deficient?

Mexico’s current law and policy regarding development of renewable energy sources is incompatible with the legal rights of its indigenous population. Specifically, a conflict exists in Mexico’s Isthmus of Tehuantepec, a region that is both plentiful with wind power and the longtime home of many indigenous persons of the state of Oaxaca. The desire to harness the available wind energy has resulted in negative ramifications for the original inhabitants of the Isthmus, as Mexico’s expansive energy policy conflicts with the rights of indigenous landholders in Oaxaca. These interests need not be competing. Utilizing the available wind energy through the construction of wind farms can be accomplished in a manner that accommodates the interests of potential wind developers and indigenous people. Regarding Mexico’s energy legislation, more specific provisions regarding enforcement and potential sanctions are necessary to adequately protect the needs of the indigenous people. This would complement Mexico’s substantial legislation regarding the rights of indigenous people. Reducing the use of unfair bargaining tactics, assuring that contractual negotiations are conducted in the appropriate language, expanding the indigenous participation in the economic benefits of wind development, and ensuring that the negative environmental ramifications are mitigated are all manners in which wind development in the Isthmus may be achieved successfully.

With All My Worldly Goods I Thee Endow, or Maybe Not: A Reevaluation of the Uniform Premarital Agreement Act after Three Decades

The Uniform Premarital Agreement Act was adopted relatively soon after the acceptance of the idea in the U.S. that premarital agreements contemplating the economic consequences of divorce could be enforced. During the past three decades about half of all U.S. states have adopted it. The overriding goal of the drafters appears to have been to create a set of rules that made it very difficult to challenge the enforceability of the agreement if the parties divorce. It sets forth very loose requirements pertaining to rules governing bargaining tactics, and severely limits any inquiry into the substantive unfairness of the agreement. The right to both equitable distribution and spousal support may be restricted or waived. Since the UPAA was adopted, other states and countries have promulgated quite different rules regarding how a divorce court should determine whether to enforce an agreement contemplating a possible divorce. These rules differ in many significant respects from the policy judgments reflected in the UPAA. A committee has been created to consider whether to modify the UPAA. This article compares the UPAA to rules now being applied in other countries and states that have not adopted the UPAA, and suggests some significant modifications to the UPAA. The proposed modified UPAA would still give parties substantial contractual freedom, but would improve the fairness of the bargaining process, disallow last-minute negotiation, and allow courts to review whether the agreement is unconscionable at divorce. In addition, the right to spousal support could not be affected if the parties have a common biological or adoptive child.

<i>¿Qué Es Racismo?</i>: Awareness of Racism and Discrimination in Ecuador

In the national consciousness, Ecuador is a mestizo nation. However, it is also an ethnically diverse nation with sizable minorities of indigenous and Afrodescended peoples. In national surveys, there is also a considerable minority who self-identify as blanco (white). Although there is strong evidence of continuing discrimination and prejudice toward both indigenous and Afro-descended peoples, there is little public discussion or political action addressing such issues. The emergence of a powerful and resilient indigenous movement in the late 1980s gained international interest and acclaim in the 1990s, in part because of the peaceful mobilization efforts and effective bargaining tactics of the movement. However, indigenous leaders usually have not engaged in a discourse of racismo and/or discriminación. There has been much less social movement solidarity and activism among Afro-Ecuadorians, but their leaders commonly employ a discourse of racismo and discriminación. In August and September 2004, a survey of more than eight thousand adult Ecuadorians was conducted in regard to racism and related topics. In this research, we use several measures from this survey that focus on awareness of and sensitivity to issues of racism, prejudice, and discrimination. Self-identification of respondents enables us to contrast the responses of whites, mestizos, Indians, and Afro-Ecuadorians to the measures. Other independent variables of interest are level of education, the region in which the respondent resides, and whether the respondent lives in an urban or rural area. Regression results show differences among the ethnic groups in levels of awareness of racism, but more powerful predictors are level of education and rural residence.

Moral Emotions and Unethical Bargaining: The Differential Effects of Empathy and Perspective Taking in Deterring Deceitful Negotiation

Two correlational studies tested whether personality differences in empathy and perspective taking differentially relate to disapproval of unethical negotiation strategies, such as lies and bribes. Across both studies, empathy, but not perspective taking, discouraged attacking opponents’ networks, misrepresentation, inappropriate information gathering, and feigning emotions to manipulate opponents. These results suggest that unethical bargaining is more likely to be deterred by empathy than by perspective taking. Study 2 also tested whether individual differences in guilt proneness and shame proneness inhibited the endorsement of unethical bargaining tactics. Guilt proneness predicted disapproval of false promises and misrepresentation. Empathy did not predict disapproval of false promises when guilt proneness was included in the analysis. The comparatively private nature of the sin of false promises suggests that private ethical breaches are more likely to be deterred by anticipated guilt, while ethical breaches with clear interpersonal consequences are more likely to be deterred by empathy.

Formidability and the logic of human anger

Eleven predictions derived from the recalibrational theory of anger were tested. This theory proposes that anger is produced by a neurocognitive program engineered by natural selection to use bargaining tactics to resolve conflicts of interest in favor of the angry individual. The program is designed to orchestrate two interpersonal negotiating tactics (conditionally inflicting costs or conditionally withholding benefits) to incentivize the target of the anger to place greater weight on the welfare of the angry individual. Individuals with enhanced abilities to inflict costs (e.g., stronger individuals) or to confer benefits (e.g., attractive individuals) have a better bargaining position in conflicts; hence, it was predicted that such individuals will be more prone to anger, prevail more in conflicts of interest, and consider themselves entitled to better treatment. These predictions were confirmed. Consistent with an evolutionary analysis, the effect of strength on anger was greater for men and the effect of attractiveness on anger was greater for women. Also as predicted, stronger men had a greater history of fighting than weaker men, and more strongly endorsed the efficacy of force to resolve conflicts--both in interpersonal and international conflicts. The fact that stronger men favored greater use of military force in international conflicts provides evidence that the internal logic of the anger program reflects the ancestral payoffs characteristic of a small-scale social world rather than rational assessments of modern payoffs in large populations.