Oligopoly Bargaining: Effects of Agreement Pressure and Opponent Strategies

Previous research on oligopoly bargaining has shown soft strategies to be superior to tough strategies and has suggested that this effect may be moderated by agreement pressure. However, previous research is difficult to interpret because the effects of strategy changes and subsequent strategies have not been adequately tested. Female students from introductory psychology classes were assigned the role of buyers and bargained with initially soft or tough and subsequently soft or tough programmed (seller) strategies under low or high agreement pressure. Subjects had the opportunity to bargain with the strategy (seller) of their choice and to change sellers at any time. As hypothesized, soft seller strategies were found to be superior to tough strategies. In addition, the superiority of soft seller strategies was increased by low agreement pressure.     

Black-Hat/White-Hat Strategy in Bilateral Negotiation

The black-hat/white-hat strategy is a sequential process involving two people who work as a team in a negotiation against an adversary. The first person in the sequence, the black hat, takes a competitive stance toward the adversary; the second in the sequence, the white hat, takes a more cooperative stance. The presumed effect is success in eliciting concessions from the adversary and reaching agreement. The experiment reported here simulated a buyer–seller negotiation to assess the effects of the temporal ordering of the black-hat and white-hat strategies. Subjects, as buyers, negotiated twice with computer-simulated sellers who were either cooperative or competitive in the first negotiation and cooperative or competitive in the second. The results suggested that strategy shifts can play an important role in negotiation: when a new strategy was presented (either more cooperative or more competitive), there was increased concession-making by subjects and reduction of distance between offers. The black-hat/white-hat strategy was most likely to reduce distance and reach agreements. The black-hat/black-hat strategy was least successful by these measures. Evidence of contrast effects was obtained in perceptions of opponent cooperativeness: the black-hat/white-hat strategy produced the greatest perceived cooperativeness. The black-hat/white-hat strategy benefited from two processes: 1. concessions of the white-hat in the second negotiation in reducing distance from agreement, and 2. greater perceived cooperativeness due to the contrast effect. Several indexes of collective efficiency indicated that a black-hat/white-hat aggregate of strategies was more efficient than any other combination of strategies.     

Do opposites attract? Assimilation and differentiation as relationship-building strategies

In addressing the call for the application of learning from other domains to the sales context, our work integrates the optimal distinctiveness theory with the study of buyer–seller relationships. We conceptualize two main buyer–seller relationship-building strategies – a value-added differentiation strategy and a compatibility-based assimilation strategy – and present an integrative theoretical framework explaining how these two strategies can be leveraged in the business and personal domains to meet customer needs and improve sales performance. Using the theory, we reconcile conflicting findings on the use of similarities and differences between salespeople and customers in buyer–seller relationships. Our theoretical framework helps salespeople address the dynamic nature of dyadic relationships strategically in a way that promotes customer satisfaction, improves the firm’s performance, and nurtures its competitive advantage.     

Joint Effects of Assigned Goals and Training on Negotiator Performance

This study examined the joint effects of assigned goals and training on negotiator performance. Undergraduate business students participated in two sessions of a competitive market simulation and were assigned to one of three levels of goals: do-your-best, specific/emy, or specific/difficult. In the training condition, an introductory lecture on bargaining strategies was presented between the two market sessions; subjects in the control conditions did not attend the lecture. In the first market session, specificldifficult goals improved mean profit per agreement but at the expense of number of agreements negotiated and total profit. In the market session after training, negotiators who were assigned specific goals (whether difficult or easy) negotiated agreements of higher joint value, thereby enhancing both mean personal profit per agreement and total profit. There were no differences between the two market sessions in the control group. The implications of these findings and future research directions are discussed.     

The effects of mutual concern on joint welfare

Previous studies attempting to assess the impact of concern for an opponent bargainer's welfare (orientation) upon the integrativeness of the agreements reached have produced differing conclusions. The design of an earlier experiment by Kelley and Schenitzki was replicated using a different negotiation method and task. Participants took the role of either the buyer or the seller in a two-party negotiation. Bargainers received instructions emphasizing either a Team Orientation (i.e., concern for mutual profit) or an Individualistic Orientation (i.e., concern for only one's own profit) and bargained under either a Free Communication or a Restricted Communication condition. The Team Orientation produced more integrative agreements (i.e., higher joint outcomes) than the Individualistic Orientation, regardless of the communication condition. Process data suggested that distinct processes may promote the development of integrative solutions in the two communication conditions.     

买卖交易中谈判者角色影响谈判结果的机制

现实生活中的谈判通常发生在特定的社会情境中, 谈判者也总在扮演着某种角色。本研究探索了买卖交易谈判中谈判者角色影响谈判结果的作用机制。研究提出了一个关于谈判者角色诱发框架效应的理论模型, 然后通过两个模拟谈判实验对这一模型进行验证。实验1表明, 买家知觉到的馅饼大于卖家知觉到的馅饼, 且谈判者知觉到的馅饼在谈判者角色与谈判者绩效间起部分中介作用。实验2发现, 即使保留买家与卖家的角色标签, 如果剥离了金钱作为交易介质这一重要特征, 两个谈判角色知觉到的馅饼也没有差异。研究揭示了谈判者角色影响谈判结果的作用机制, 对谈判者如何利用情境因素取得更好的谈判结果具有实践意义。     

Anchoring in Simulated Competitive Market Negotiation

The competitive market simulation (Bazerman, Magliozzi, & Neale, 1985) was used to explore anchoring effects in negotiation. Two possible anchoring effects were examined in the present study. One effect involved the profit schedule format; although individual profit schedules for buyers and sellers were normatively equivalent, in most previous studies the buyer's schedule was presented in decreasing order, whereas the seller's schedule was increasing. Anchoring on the first number in the profit list would contribute to the buyer's advantage, often found in this research. The effect of schedule format was tested here by running a separate simulation with inverted formats. As predicted, the relative advantage of buyers over sellers reversed with the change in profit schedule format. The second anchoring effect involved the initial offers. In running the simulated market, initial offers were recorded as well the initiator's assigned role. Initial offer values, for both the initiator and the non-initiator significantly affected final profit. The impact of schedule format on final agreement appeared mostly due to its effect on initial offers. Finally, the role of experience was examined. As in Bazermanet al.(1985), joint profit increased with learning. The increase stemmed from improved value of the initial offer from the perspective of the non-initiator. The results provided no indication of a decline in format schedule effect or in the major impact of initial offers, as negotiators gain experience. The implications of results concerning the role of anchoring in negotiation are discussed.     

Face threat sensitivity in negotiation: Roadblock to agreement and joint gain

Negotiation scholars and practitioners have long noted the impact of face, or social image, concerns on negotiation outcomes. When face is threatened, negotiators are less likely to reach agreement and to create joint gain. In this paper, we explore individual differences in face threat sensitivity (FTS), and how a negotiator's role moderates the relationship of his or her FTS to negotiation outcomes. Study 1 describes a measure of FTS. Study 2 finds that buyers and sellers are less likely to reach an agreement that is in both parties' interests when the seller has high FTS. Study 3 finds that job candidates and recruiters negotiate an employment contract with less joint gain when the candidate has high FTS, and that this relationship is mediated by increased competitiveness on the part of the high FTS candidates. The results support Deutsch's (1961) application of face theory ( Goffman, 1967) to negotiation.     

Linking Service Climate and Disconfirmation of Expectations as Predictors of Customer Satisfaction: A Cross‐Level Study1

Research addressing customer satisfaction has not been conducted within an integrated framework. Two approaches have been developed separately with different levels of construct and analysis: organizational behavior and consumer behavior. Our research study provides an initial step in developing integrative strategies with the joint consideration of service climate and disconfirmation of expectations. We link these 2 concepts to customer satisfaction with services, using a cross‐level approach. Data from 105 work units and 1,033 customers confirmed the existence of a dual corridor of relationships, with independent and significant links from disconfirmation and service climate to customer satisfaction. Implications for practice and future research are discussed.     

Constructing preference from experience: the endowment effect reflected in external information search

People often attach a higher value to an object when they own it (i.e., as seller) compared with when they do not own it (i.e., as buyer)--a phenomenon known as the endowment effect. According to recent cognitive process accounts of the endowment effect, the effect is due to differences between sellers and buyers in information search. Whereas previous investigations have focused on search order and internal search processes (i.e., in memory), we used a sampling paradigm to examine differences in search termination in external search. We asked participants to indicate selling and buying prices for monetary lotteries in a within-subject design. In an experience condition, participants had to learn about the possible outcomes and probabilities of the lotteries by experiential sampling. As hypothesized, sellers tended to terminate search after sampling high outcomes, whereas buyers tended to terminate search after sampling low outcomes. These differences in stopping behavior translated into samples of the lotteries that were differentially distorted for sellers and buyers; the amount of the distortion was predictive of the resulting size of the endowment effect. In addition, for sellers search was more extended when high outcomes were rare compared with when low outcomes were rare. Our results add to the increasing evidence that the endowment effect is due, in part, to differences in predecisional information search.     

A Choice of Alternative Strategies in Oligopoly Bargaining

Research in bilateral bargaining has shown reciprocal and tough strategies to be superior to soft strategies in producing favorable bargaining outcomes. However, previous research has not examined the effectiveness of opponent strategies in oligopoly bargaining. It was hypothesized that in oligopoly bargaining a soft reciprocal strategy would produce better outcomes than either tough reciprocal or tough strategies. Female students from introductory psychology classes bargained utilizing three programmed strategies. Subjects were afforded the opportunity to bargain with the strategy of their choice and to change opponents (strategies) as they wished. Results indicated that subjects (1) bargained more often with the soft reciprocity strategy than with either the tough reciprocity or tough strategy, (2) made more concessions to the soft reciprocity strategy, (3) reached more agreements with the soft reciprocity strategy. Furthermore, although the soft reciprocity strategy earned the lowest profit per agreement, it also earned the largest total profit by virtue of the greater number of agreements.     

The Balance of Power: Effects of Role and Market Forces on Negotiated Outcomes1

Role and market forces provide two sources of power that affect negotiated outcomes. To test their effects, 48 subjects participated in one of two negotiation markets that favored either buyers or sellers. Profit was influenced by both power sources: Buyers outperformed sellers, and negotiators in a favorable market outperformed negotiators in an unfavorable market. This effect was shown to be additive, indicating that the effects of the two sources of power were independent of one another. Whereas negotiators advantaged by market forces showed increases in profit over time, profits for negotiators disadvantaged by the market remained stable. Joint profit rose throughout both markets. However, this did not reflect increasing integrativeness in the markets; rather, the increase could be attributed to increases in high power negotiator profits. Markets became more distributive over time, and both the effectiveness and efficiency of bargaining decreased, particularly in the market favoring buyers.     

Integrative bargaining in a competitive market

The behavioral decision theory literature was used to identify the determinants of negotiation success in an integrative bargaining, free-market exercise. This study provides a novel methodology for studying negotiation. Specifically, buyers and sellers were allowed to engage in negotiations with as many competitors as possible in a fixed time period. The results suggest that integrative bargaining behavior increases and the market converges toward a Nash equilibrium as negotiators gain experience. In addition, the results suggest that (1) positively framed negotiators (“What will be my net profit from the transaction?”) complete more transactions than negatively framed negotiators (“What will be my expenses on this transaction?”), (2) negotiators who are given moderately difficult profit constraints in order to be allowed to complete a transaction achieve more profitable transactions than negotiators without such constraints, and (3) both framing and the existence of constraints affect the total profitability of the negotiator.     

Beyond commitment: entrenchment in the buyer–seller exchange

A specific empirical finding in the buyer–seller literature – initially discovered by Moorman, Zaltman, and Deshpande and subsequently replicated by Grayson and Ambler – still suffers from incomplete explanation. In business-to-business marketing, why do some long-term buyers appear to trust their providers a great deal but not use the service provided? This research endeavours to more fully explain this ‘dark side’ of relationship selling by integrating work on the economic theory of entrenchment with Dwyer, Schurr, and Oh's seminal buyer–seller framework. The result is a modified conceptual model of the buyer–seller exchange in which potential seller entrenchment follows Dwyer et al.'s courting and commitment stages. Motivated by Dwyer et al.'s urging to examine their model using a negotiation lens, this research then borrows two contrasting orientations from the negotiation literature and offers propositions regarding how buyers and sellers interact at each stage of the exchange. In addition to enriching understanding of how buyers and sellers negotiate in the courting and commitment stages, this research is the first to offer insight into how both sides might negotiate when faced with seller entrenchment.     

禀赋效应对产品更换决策的影响

以禀赋效应理论为研究基础, 通过两个情景实验对产品更换过程中买卖双方的决策心理进行了研究。实验1表明, 在以旧换新活动中新产品的买方对旧产品的价格有高估的倾向, 对新产品的价格有低估的倾向; 相反, 新产品的卖方对旧产品的价格有低估的倾向, 而对于新产品的价格有高估的倾向, 这说明产品更换决策中存在着双重的禀赋效应。实验2表明, 新产品的买方对旧产品的属性评价显著高于新产品的卖方, 对新产品的属性评价显著低于新产品的卖方, 说明属性评价也存在禀赋效应的特征。双重禀赋效应的存在从消费者行为的角度解释了为什么消费者会出现创新抵制行为。     

Bargaining Behavior in a Transfer Pricing Experiment

The purpose of this study was to determine the effects of market threat capacity, external incentives, and time horizons on bargaining behavior in a transfer price simulation. Each subject played the role of a divisional manager. Market threat capacity was the option held by one negotiator to sell or buy his or her product in an external market. Incentives were based either entirely on a division′s profit or on both the divisional profits and the firmwide profits. Time horizon was manipulated at two levels—a single round of bargaining or a multiple round setting, the length of which was not specified to the subjects. Uncertainty regarding threat capacity reduced the frequency of cooperative bargaining. Contrary to expectations, subjects paid according to divisional profits cooperated more frequently than subjects paid on a joint basis of division and firm profits. Subjects did not become more cooperative over three rounds of negotiating, but the rate of cooperative behavior was affected by whether subjects expected to negotiate multiple or single rounds with the same person. The results indicate the importance of a multiple negotiation time horizon, threat capacity, and incentives on negotiation behavior.     

Personal Selling and Sales Management Abstracts

The purpose of this study is to develop and test a customer defection model describing an organizational buyer’s propensity to stop purchasing from a supplier within a multisource buyer–seller relationship. A total of 168 employees who worked in purchasing using multiple suppliers in procurement were used for this study. Findings provide strategies for the salesperson to utilize in order to reduce the customer’s perception of available alternatives (e.g., increase trust in the salesperson) and defection (e.g., increase customer satisfaction and commitment). Findings also show that the relationship between satisfaction and commitment is fully mediated by trust within a multisource relationship.     

Culture in the context of intercultural negotiation.

This study explores culture's effect on behaviors and outcomes in intercultural negotiation and examines how those effects are moderated by role. Eighty U.S. and international students took part in a previously developed negotiation task (Pruitt, 1981) and completed Hui and Triandis's (1986) individualism‐collectivism (INDCOL) scale. Negotiation interactions were coded for information sharing, offers, and distributive tactics. Findings show that a negotiation dyad's collectivism is positively associated with higher joint profit. The effects of culture on both communication behaviors and joint outcomes, however, differ by role of the negotiator. In particular, seller collectivism has larger and more consistent effects on communication behavior and joint profit than buyer collectivism. Results support a ‘culture in context’ perspective of negotiation that takes into account negotiator qualities, contextual and structural features of the negotiation, and mediating processes in addition to cultural values.