Negotiation Behavior Research Articles

Round offer prices in M&A transactions: costly negotiation and psychological preference

PurposeThe authors of this study aim to investigate possible explanations of the prevalence of price clustering in the final offer prices of mergers and acquisitions (M&A).Design/methodology/approachThe authors use final offer price in M&A deals to investigate the price clustering phenomena. The authors used regressions and logistic regressions to examine potential factors that might affect pricing strategy by looking into one-time acquirers and experienced serial acquirers.FindingsPrice clustering increases with negotiation uncertainties characterized as competitive bidding, number of bidders, challenged deals and duration. Moreover, the authors find persistent price clustering in experienced serial acquirers that are more experienced and better equipped with handling uncertainties, suggesting a preference of using round numbers regardless of levels of uncertainties. The authors' evidence shows that price clustering results from a combination of Harris' (1991) costly negotiation hypothesis where round prices may be used to lower search costs and psychological bias and preference.Originality/valueThe authors appear to be the first to investigate alternative theories that support M&A offer price clustering behavior, finding that both the costly negotiation and psychological bias and preference theories apply to M&A final price formation. Thus, the authors' major contribution, specific to the M&A process, is a clarification of physical and psychological factors associated with bidding and negotiation behavior. The authors are confident that the authors' study impacts conventional knowledge regarding M&A deal negotiation strategies, including bidding behavior, contract negotiation, financial analysis, management practices and risk management.

Buyer-seller negotiation in consumer markets: an intention congruence approach

PurposeThe purpose of this study is to understand how the degree of congruence between buyers’ and sellers’ intentions to negotiate impacts buyers’ postpurchase emotions and attitudes. In addition, the study examines whether buyers’ self-confidence and negotiation expertise can increase buyers’ perceptions of control and regret, as well as buyers’ postpurchase satisfaction and enjoyment with the purchase. Traditionally, marketplace exchanges have been classified as either fixed price or negotiated. The present research treats marketplace exchanges along a continuum of intention congruence to test the relationships between intention congruence and outcome variables of control, regret, satisfaction and enjoyment with the purchase.Design/methodology/approachThe authors studied the perceived difference between buyers' and sellers' intentions to negotiate and how the difference impacts buyers' postpurchase attitudinal and emotional outcomes. A mail survey of automobile buyers resulted in a sample of 291 respondents. An automobile is a significant and irreversible purchase for a buyer. Thus, automobile markets often host transactions that evoke dissonance and regret for buyers if things go awry. In addition, buyers and sellers vary considerably in their desire to negotiate, thus reflecting a range of intention congruence in negotiation. Therefore, a survey of automobile buyers was considered appropriate for testing the effects of intention congruence on buyers’ postpurchase outcomes.FindingsResults indicate that when buyers are willing to negotiate but sellers do not reciprocate equally, buyers feel less in control of a transaction. Contrarily, buyers experienced greater control and lesser regret when buyers’ perceptions of sellers’ intention to negotiate exceeded buyers’ own intentions to negotiate. Results also suggest that when buyers’ intentions to negotiate were congruent with buyers’ perception of sellers’ intention to negotiate, greater dyadic levels of negotiation marginally lowered buyers’ perceived regret. Overall, an intention-congruence perspective adds to the current understanding of negotiated exchanges and is a meaningful approach for improving postpurchase outcomes for buyers.Research limitations/implicationsThe study used only the consumers’ perspective of negotiation. Although this is supported by studies in power and dependence because the consumers’ perspective is valuable and valid, a true dyadic measurement of the negotiation process can only be obtained if the sellers’ view is also incorporated. This remains a key limitation of this study.Practical implicationsThe results suggest that sellers may be better off honoring buyers’ intentions to negotiate. Intention incongruence negatively impacted buyer satisfaction when buyers perceived sellers to be less eager to negotiate. However, where sellers seem more eager to negotiate, incongruity favored buyers and positively impacted buyers’ postpurchase outcomes. Thus, for sellers, it is worthwhile to consider adding policies that honor negotiation.Originality/valuePast research classifies marketplaces exchanges as either fixed price or negotiated. The present study uses intention congruence as a continuum between transaction partners. The intention congruence approach allows a closer examination of both the symmetry and strength of intentions to negotiate in a dyadic exchange. Given that markets are comprised of buyers and sellers who display considerable variability in intentions to negotiate, examining intention congruence allows for a more realistic study of negotiation behavior in business-to-consumer marketplaces.

HTA6 Balancing National Financial Stability with Commercial Expectations of Return on R&D Investment: A Review of Price Discounts for the Reimbursement of Oncology Drugs in Brazil

With Brazil becoming a key reference country in Latin America, pricing discussions at the country level have regional implications. Bargaining behavior in pricing and negotiations for oncology products in Brazil is leading to more price discounts and subsequent sub-optimal revenue goals for manufacturers. This study aims to investigate the common price discounts applied to innovative oncology drugs in Brazil.

Who is cooperative in negotiations? The impact of political skill on cooperation, reputation and outcomes

PurposeThe purpose of this study is to predict cooperation in negotiation through the lens of individual differences. Specifically, this paper examines how a social competence variable called “political skill” relates to cooperation and subsequent effects on negotiation process, outcomes and negotiator reputation. The authors demonstrate how political skill fits in the evolving literature focusing on individual differences in negotiation by comparing political skill to a wide range of other individual difference measures.Design/methodology/approachThis study was conducted by assessing individual difference measures at the beginning of graduate-level negotiation courses and tracking negotiation behaviors and outcomes over several months. This approach was chosen to minimize the potential for short, time-limited interactions to mask existing relationships. It also allowed the authors to include multiple negotiation interactions, which takes a broader view of negotiation performance, and assess negotiator reputation by allowing it to emerge over time.FindingsThe results of this study show that political skill, self-rated at the beginning of this study, is significantly related to a negotiator’s overall use of cooperative behavior as rated by peers. Political skill also showed a significant relationship with reputation for cooperativeness and aggregate outcomes in negotiations. These results control for other individual difference measures such as personality, implicit negotiation beliefs, social value orientation and negotiation self-efficacy.Originality/valueUsing a method that allows the effects of an individual difference to materialize over time, this study empirically establishes the connection between political skill and negotiation reputation, process and outcomes. The methodological contributions of this study explore the relations between self-rated individual difference variables, peer-rated cooperative behaviors and objective coded negotiation outcomes in evaluating political skill in negotiation.

Effects of alcohol problem discrepancy on relationship adjustment: The moderating role of conflict negotiation among couples with alcohol use disorder and intimate partner violence.

Alcohol use disorder (AUD) has well-known negative effects on romantic relationship functioning, including the occurrence of intimate partner violence (IPV). A separate literature focused on community couples indicates that relationship functioning is more likely to suffer when partners report greater discrepancies in alcohol consumption. It is important to expand this literature to couples with AUD and to examine the role of impactful AUD domains in dyadic functioning. Furthermore, few studies have examined adaptive, treatment-malleable factors that could potentially offset the negative impact of alcohol discrepancies on relationship functioning. This study examined the association between couples' alcohol problem discrepancies and relationship adjustment, as well as the moderating effect of self-reported adaptive conflict negotiation behaviors. Participants were 100 couples (N = 200 individual participants) with intimate partner violence wherein at least one partner met diagnostic criteria for AUD. Actor-Partner Interdependence Models indicated that greater alcohol problem discrepancy was associated with lower dyadic adjustment. Moderation analyses revealed that the highest level of relationship adjustment was observed among couples with lower alcohol problem discrepancy and greater negotiation behaviors, while relationship adjustment was similar for couples with larger alcohol problem discrepancy, regardless of negotiation behaviors. Although further study is needed to clarify under what specific conditions adaptive negotiation behaviors are most helpful, they appear to be beneficial for some couples in this sample. We found no evidence that negotiation behaviors may be harmful among these high-risk couples.

Pay Suppression in Social Impact Contexts: How Framing Work Around the Greater Good Inhibits Job Candidate Compensation Demands

Past research suggests that when organizations communicate the benefits of their work for human welfare—that is, use a social impact framing for work—job candidates are willing to accept lower wages because they expect the work to be personally meaningful. We argue that this explanation overlooks a less socially desirable mechanism by which social impact framing leads to lower compensation demands: the perception among job candidates that requesting higher pay will breach organizational expectations to value work for its intrinsic (rather than extrinsic) rewards, or constitute a motivational norm violation. We find evidence for our theory across five studies: a qualitative study (Study 1), a hiring experiment with undergraduate students (Study 2), an online labor market field experiment (Study 3), a vignette-based simulation (Study 4), and a stimulus sampling study using multiple occupations (Study 5). Exploratory analyses find that the negative effects are unique to monetary (versus nonmonetary) job rewards. Together, results uncover a novel mechanism by which emphasizing work for the greater good leads job candidates to accept lower wages—one that reflects candidates self-censoring on pay from concerns about violating organizational norms rather than solely from a willingness to trade higher pay for potentially meaningful work. Our research contributes to understandings of how social responsibility messaging impacts workers’ perceptions of organizations and negotiation behavior. It also holds implications for emerging scholarship on managers’ implicit theories of employee work motivation. Funding: I. Hussain thanks the Dean’s Research Excellence Grant at the McCombs School of Business at the University of Texas Austin for generous financial support. The research also benefitted from Tier 1 Academic Research Funds awarded to M. Pitesa [Grant C207/MSS19B011] and M. Schaerer [Grant C207/MSS22B011] by the Ministry of Education, Singapore, and the Research & Development Fund of INSEAD. Supplemental Material: The online supplement is available at https://doi.org/10.1287/orsc.2023.1675 .

Growing Apart: China and India at the Kigali Amendment to the Montreal Protocol

Abstract Developing countries are growing apart on environmental issues. International environmental negotiations are no longer characterized merely by the North–South conflict. Rising powers have come to divide the Global South and redefine the Common-But-Differentiated Responsibilities principle. This article explains the divergence of China and India at the Kigali Amendment to the Montreal Protocol, one of the first global environmental agreements to differentiate obligations between developing countries. China and India, the world’s two largest hydrofluorocarbon producers, ended decades of collaboration and split the rest of the developing world behind them. I argue that developmental strategy and political institutions shape the preferences and influences of industrial, governmental, and social stakeholders, thereby explaining their negotiation behavior and outcome. This article explains why China moved faster and further than India on negotiations for hydrofluorocarbon regulation. It has important implications for the two rising powers’ implementation of the Kigali Amendment and for their position formulations on other environmental issues.

INDIGENOUS CONFLICT MANAGEMENT: FACTORS CONTRIBUTING TO THE EFFECTIVENESS OF THE STRATEGIES. A SYSTEMATIC REVIEW

There are several possible ways to respond to conflict situations as a managerial intervention to solve it. The current understanding of such conflict management strategies was framed without adequately considering indigenous practices. Therefore, the objective of this systematic review was to explore the contributors and determinants of the effectiveness of indigenous conflict management strategies. The findings indicated that factors such as shared dialogue, empowering indigenous structures, symbolic ritual procedures, flexibility, ease, friendliness, compassion, less costless, timeliness, transparency, inclusiveness, adequate interests representation, power sharing, and diversity recognition contributed positively to its effectiveness. Nonetheless, poor language choice and communication barriers, lack of legal empowerment, corrupt behavior of negotiators, and negative attitudes became hindrances to its value. This review identified that indigenous conflict management strategies have valuable managerial application potential in the field of conflict interventions. However, the review was limited to only positive and negative contributors to indigenous conflict management strategies. Keywords: Conflict, Conflict management, Effectiveness, Indigenous strategies, Systematic review

In the eye of the beholder: A configurational exploration of perceived deceptive supplier behavior in negotiations

AbstractDeceptive behavior in negotiations has been found to be widespread and to have harmful consequences. This study shifts the current research direction on deceptive negotiation behavior by adopting a target's perspective on deception and by using a configurational theorizing approach. Prior studies in supply chain management (SCM) and in other disciplines have studied deceptive negotiation behavior—as one specific form of opportunism—based on correlational approaches. In doing so, they have focused almost exclusively on the actor's (i.e., deceiver's) perspective—for example, investigating actors' motivations for using deception. As a result, a profound understanding of deceptive negotiation behavior from a target's perspective is lacking. In three studies, this research investigates what factors, on both the firm and individual levels, combine to lead purchasing managers (i.e., targets) to perceive supplier deception. The configurational analysis uncovers considerably more combinations of firm‐level and individual‐level factors that lead to perceptions of high supplier deception than combinations that lead to perceptions of low supplier deception. Thus, the contribution is twofold: First, the studies shift the perspective from the deception source to the deception target. Second, they uncover the causally complex nature of perceived deception in negotiations. Managerial implications include that purchasing managers, in their efforts to detect supplier deception, should move beyond paying attention to isolated factors, such as body language, and instead should focus on different combinations of power balances, negotiation stakes, and negotiator proficiencies.

International negotiation prototypes: The impact of culture

This paper explores the relationship between culture and negotiation, identifying clusters of negotiation patterns and assessing whether the negotiator’s culture affect the probability of adopting one model over the others. We use latent class analysis on a sample of 2099 observations of negotiation behaviors in 69 countries, to identify negotiation clusters and we obtain three negotiation prototypes. One prototype is oriented to personal relationships, the expression of emotions, and a flexible agenda for a polychronic procedure. Another is formal, facts-focused, and monochronic, maximizing economic value but disregarding personal relationships. The third prototype is harder to interpret and might indicate contexts where different negotiation behaviors coexist. Culture, defined taking into account multiple sources, is a significant predictor of negotiation prototypes (beyond other socio-economic factors). Our results highlight the importance of behaviors along the relational-transactional dimension for international negotiations, as well as the advantages of using mixed qualitative-quantitative methods in negotiation research.

Influence of Benevolence and Credibility on Conduct of Integrative Negotiation Behaviours

This paper aims to determine the influence of benevolence and credibility on cooperative negotiation in the B2B markets between manufacturers and distributors using the dyadic methodology. The Principal Component Analysis (PCA) emphasizes the bi-dimensionality of trust, credibility, and benevolence by surveying 253 manufacturers and 53 distributors. Analyzing the perceptions of Producers and Retailers revealed the existence of a “perceptual convergence” between them. Moreover, the results from the dyadic analysis of the representative sample of the study showed a significant and positive impact of credibility on integrative and cooperative negotiation behavior. However, it also revealed an insignificant relation between cause and effect between benevolence and integrative and cooperative negotiation behavior. After using regression, benevolence as a dimension of trust positively impacts the integrative and cooperative negotiation behavior estimates reject. This research created a retailer and manufacturer integrative and cooperative negotiation behavior model for the B2B markets, adding to the greater knowledge of Marketing and Management. The proposed model shall aid manufacturers and retailers in effective integrative business negotiation. Retailers, who are more powerful than producers, benefit more from utilizing negotiation as a tool to exercise a better influence over producers/suppliers and, thus, reach better results. Nevertheless, the findings revealed that Trust impacts positively and directly integrative negotiation. Hence, it suggests building integrative and cooperative negotiations between producers and retailers depending on the degree of trust between them. Finally, the findings can be considered an evident aid for managers to accomplish effective negotiations better. It is worth mentioning that the results of the PCA of producers’ and retailers’ perceptions designate the insignificant relationship between benevolence and integrative negotiation.

Unethical negotiator behavior during negotiation process

Unethical negotiator behavior during negotiation process

I’m Only Human? The Role of Racial Stereotypes, Humanness, and Satisfaction in Transactions with Anthropomorphic Sales Bots

This research examines whether consumers ascribe racial stereotypes to artificially intelligent (AI; nonhuman) agents and whether these stereotypes impact ratings of satisfaction, perceptions of competence and humanness, and outcomes of negotiated transactions. Drawing on the stereotype content model, expectation violation theory, and the humanness-value-loyalty framework, we investigate how consumers apply racial stereotype judgments in interactions with artificially intelligent agents in a controlled negotiation experiment. Results reveal that although Black people, in general, are more likely to be stereotyped as less competent than Asian or White people, the opposite is true for Black AI bots. Furthermore, perceptions of competence and humanness of Black AI bots supersede those of Asian and White AI bots, leading to increased ratings of overall satisfaction, and some evidence of more favorable negotiation behaviors. Implications for AI applications in marketing are discussed.

Structural networks and dyadic negotiations in tourism destination ecosystems

PurposeThis study aims to investigate how and to what extent structural network properties affect dyadic negotiation behavior in tourism destination ecosystems. Specifically, this study addresses negotiation behavior in terms of problem-solving and contending, because these two key strategies reflect the integrative and distributive aspects of dyadic interactions.Design/methodology/approachThis study relies on network data and dyadic survey data from nine mountain tourism destinations in Southeastern Norway. The structural network properties the authors research are triadic closure – the extent to which a dyad has common ties to other actors – and structural equivalence – the similarities in networking patterns that capture firms’ competition for similar resources. In addition, the authors also study a possible effect of relationship duration on negotiation behavior.FindingsTriadic closure and relationship duration have positive effects on problem-solving, and structural equivalence tends to decrease problem-solving, although the effect is inconsistent; none of these three independent variables was found to affect contending negotiation behavior.Research limitations/implicationsThis study shows that a dyad’s structural network embeddedness has implications for negotiation behavior. Further research is encouraged to develop this theoretical perspective.Originality/valueThis study is a pioneering investigation of how structural network properties affect dyadic negotiation behavior in ongoing coproducing relationships in real-world destination ecosystems.

Systematic Literature Review of Strategic Behavior in Negotiation

Negotiation is a frequent phenomenon in everyday life. Whenever a person needs another person to solve their problems, their intertwining goals and preferences should be adjusted through negotiation. From this recurrent demand of dealing with negotiation, we constantly seek ways to improve it. One of the ways is by learning and assessing strategic behavior in negotiation. Starting from this objective, we systematically reviewed 1,490 articles to build a comprehensive outlook on negotiation behavior research progress. We use five systems of observation level to categorize the articles included in this study that are: (1) intrapersonal system, (2) interpersonal system, (3) group system, (4) organizational system, and (5) virtual system. The result showed us that the research landscape has progressed toward the development of automated negotiating agents besides observing human negotiators exclusively. We also see the emerging interplay between systems of observation level

Compromise-Building in the Spotlight of the Media? Individual and Situational Influences on the Self-Mediatization of Parliamentary Negotiations

Political actors in negotiations often face the challenge of contradictory logics of discreet compromise-building on the one hand and generating media publicity to enhance transparency and gain public support on the other. This paper examines how members of parliament (MPs) handle this dilemma within intra-coalition parliamentary negotiations that are essential for legislative decision-making. By referring to the mediatization approach, the concept of self-mediatization of political negotiation systems is introduced to theoretically capture politicians’ self-initiated media publications regarding negotiations and associated changes in their negotiation behavior. It is hypothesized that the self-mediatization of negotiations is influenced by negotiators’ general tendency to seek media attention as well as situational pressures and incentives. The hypotheses were tested with a factorial survey among German state-level MPs ( n = 258) using experimental vignettes. Results show that both individual and situational factors affect parliamentarians’ tendency to publicly communicate about negotiations and consequently negotiate in a more news-media-logic-compatible, that is, more conflictual, manner. However, since the surveyed MPs on average show a high willingness to agree with their coalition partner on the explicit secrecy of negotiations, independent of the influencing parameters examined, self-mediatization does not seem to be an existential threat to the intra-coalition compromise-building capacity of parliamentary negotiation systems.

Power of nonverbal behavior in online business negotiations: understanding trust, honesty, satisfaction, and beyond

ABSTRACT Digital teamwork has become prevalent and is ever since becoming part of the human work- and life-style, globally. But in comparison with face-to-face setting, virtual teams face multifold challenges. To date, scarce empirical research has examined whether team-breaking challenges are associated with limited access to peer nonverbal signals. This study examines whether access to body signals is associated with effective teamwork, and whether limited access provokes key team challenges. We also examine what social-psychological team concepts can be detected from peers’ consciously or unconsciously displayed visual cues that cannot be as effectively gained without visual access. 14 dyadic teams of MBA students were examined in an online business negotiation task to reach an authentic commercial deal. Half of the teams negotiated only through voice and text, while the other half had camera access as well. Using an exploratory mixed methods analysis, we identified 12 unique team factors based on nonverbal data. We also found that teams with camera access could build mutual trust more rapidly, detect peer honesty better, and realize agreements on suggestions more accurately. Surprisingly, we also found instances where camera access became stressful and participants reported it as an additional burden. Conclusions and implications are reported at the end.

Your Reputation Precedes You: Ceasefires and Cooperative Credibility During Civil Conflict

How does the state’s behavior in negotiations with one non-state group influence the behavior of other non-state actors? We argue that the dynamics of different conflicts within the same country are interdependent, and that a state develops a reputation through its interactions with each conflict party. This reputation provides a valuable source of information that other groups use to judge the state’s cooperative intentions. When a state develops a reputation for cooperation, this increases the likelihood of (indirect) reciprocation from other groups. More specifically, we argue that when states enter into (and honor) a ceasefire with one rebel group, they demonstrate a credible reputation for cooperation. A credible reputation for cooperation, we posit, increases the likelihood that other conflict parties enter into ceasefires with the state, or that they de-escalate their military activities. We test our claims using the new civil conflict ceasefire dataset and find support for our argument.

For A Better Understanding of Opposing Negotiator Behavior

This paper has two objectives. We start by trying to identify the intercultural factors that can influence international business negotiation. Second, we work to improve how organizations, both public and private, perceive their behavior. In order to do this, a qualitative exploratory study employing the individual interview method was conducted on a sample of Tunisian and French negotiators. "Nvivo 7" software, which is known to improve data analysis when a considerable corpus of information needs to be coded and classified into thematic categories, was used to process the collected data.

For A Better Understanding of Opposing Negotiator Behavior

For A Better Understanding of Opposing Negotiator Behavior