Negotiation Behavior and Outcomes: Empirical Evidence and Theoretical Issues
Negotiation Behavior and Outcomes: Empirical Evidence and Theoretical Issues
Negotiation Behavior and Outcomes: Empirical Evidence and Theoretical Issues
This article examines the ability of the individual differences, motivational, and cognitive ap-
proaches of negotiation to account for empirical research on dyadic negotiation. Investigators have
typically focused on objective, economic measures of performance. However, social-psychological
measures are important because negotiators often do not have the information necessary to make
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
accurate judgments of the bargaining situation. Negotiators' judgments are biased, and biases are
This document is copyrighted by the American Psychological Association or one of its allied publishers.
associated with inefficient performance. Personality and individual differences appear to play a
minimal role in determining bargaining behavior; their impact may be dampened by several
factors, such as homogeneity of subject samples, situational constraints, and self-selection pro-
cesses. Motivational and cognitive models provide compelling accounts of negotiation behavior. A
psychological theory of negotiation should begin at the level of the individual negotiator and
should integrate features of motivational and cognitive models.
Negotiation is a pervasive and important form of social inter- Morgenstern, 1947) and prescribe how people should behave in
action. Negotiation is necessary whenever conflict erupts and competitive situations (Cross, 1965; Harsanyi, 1956; Nash,
there are no fixed or established rules or procedures to resolve 1950,1953). Normative models have largely been the province
conflict and whenever people want to search for agreement of economists and game theorists (cf. Cross, 1965; Harsanyi,
without resorting to aggression or open fighting (Lewicki & 1956; Nash, 1950). As Raiffa (1982) stated, "Game theorists. . .
Litterer, 1985). Negotiation occurs in business and academic examine what ultrasmart, impeccably rational, superpeople
environments and in informal social interactions such as decid- should do in competitive, interactive situations. They are not
ing with a friend or spouse where to dine or vacation. Clearly, interested in the way erring folks like you and me actually be-
negotiation is essential for anyone who must interact with other have, but in how we should behave if we were smarter, thought
people to accomplish their objectives. harder, were more consistent, were all knowing" (p. 21). Nor-
There is broad interest in the study of negotiation behavior. mative models have advanced the understanding of conflict
This interest is evident in the interdisciplinary history of the behavior by providing compelling analyses of optimal or ratio-
study of negotiation in the fields of psychology, economics, nal behavior in competitive situations.
industrial relations, organization behavior, sociology, and law. In addition to prescribing how negotiators should behave,
The theoretical goal is to predict the processes and outcomes of some economic models were also intended to describe the ac-
negotiation. The practical or applied goal is to help people nego- tual behavior of negotiators (Nash, 1950). However, empirical
tiate more effectively (Bazerman, 1986; Raiffa, 1982). The fun- observation indicates that normative models do not adequately
damental and enduring questions raised by the growing body of describe the behavior of most people in bargaining situations
research on negotiation behavior include the following: What
(Neale & Bazerman, 1985a; Northcraft & Neale, in press;
factors lead to negotiation success or failure? Which theoretical
Thompson & Hastie, in press). Specifically, bargainers do not
perspective provides the best account of negotiation behavior?
behave according to principles of normative bargaining models
What empirical findings must a theoretical approach to negoti-
and, in fact, systematically violate key principles (Bazerman &
ation explain? The purpose of this article is to address these
Neale, 1983). Primarily as a response to the inadequacy of nor-
theoretical and empirical issues.
mative models to account for empirical observation, purely de-
A variety of theoretical analyses of negotiation behavior have
scriptive theories of negotiation behavior have developed. De-
been developed. An important theoretical distinction is that
scriptive theories have been largely the province of psycholo-
between normative and descriptive approaches (Neale &
gists and organization theorists (cf. Bazerman & Carroll, 1987;
Northcraft, in press; Raiffa, 1982). Normative models are
Kelley, 1966; Pruitt & Rubin, 1986). Descriptive theories exam-
based on axioms of individual rationality (cf. von Neumann &
ine the influence of individual characteristics, motivations,
and cognitive processes on judgment, behavior, and outcomes
in negotiation. The focus of this article is on descriptive ac-
I thank Max Bazerman and Reid Hastie for helpful comments on
drafts of this article. counts of negotiation behavior.
Correspondence concerning this article should be addressed to Because of the large volume of research on negotiation behav-
Leigh Thompson, Department of Psychology, University of Wash- ior in many disciplines, it was necessary to restrict the scope of
ington, Seattle, Washington 98195, or by bitnet to Ithomp- this review in four ways. First, I examined negotiation or ex-
son@max .acs.washington.edu. plicit bargaining (Chertkoff & Esser, 1976; Cross, 1965; Siegel &
515
516 LEIGH THOMPSON
Fouraker, 1960). This definition excluded research on matrix (Walton & McKersie, 1965). Two people bargaining over the
games such as the Prisoner's Dilemma (for reviews, see North- price of a used car for which the seller wants more money and
craft & Neale, in press; Pruitt & Kimmel, 1977; Smith, 1987). the buyer wants to pay as little as possible is an example of a
Pure negotiation situations differ from social dilemmas in distributive negotiation. Pure coordination situations exist
terms of the communication between parties, the parties' abil- when parties' interests are perfectly compatible; increasing one
ity to make provisional offers, the veto power that each party party's utility also increases the other party's utility. A negotia-
has on any outcome other than the disagreement outcome, and tion over an orange in which one person desires only the peel
each party's knowledge of the other's payoffs, interests, and and the other desires only the juice is an example (Follett,
structure of the task (Bartos, 1972; Chertkoff & Esser, 1976; 1940). In empirical investigations, researchers typically do not
Rapoport, 1968; Siegel & Fouraker, 1960). Second, the focus examine bargaining in pure coordination situations, although
was on two parties, or dyadic negotiation, as opposed to multi- interesting questions concern whether negotiators are able to
party negotiation involving coalitional activity (for reviews of realize when their interests are compatible with those of an-
coalitional bargaining, see Miller & Komorita, 1986; Mur- other (Hammond, Stewart, Brehmer, & Steinmann, 1975;
nighan, 1986). The review was restricted to bargains in which Thompson & Hastie, in press). Sometimes parties' interests are
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
negotiators were monolithic (i.e., negotiators bargain for their neither completely opposed nor purely compatible. Such situa-
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own interests or, if representing a constituency, the constitu- tions are known as variable-sum or integrative negotiations
ency members have uniform interests; Raiffa, 1982). Third, I (Walton & McKersie, 1965).2 In integrative bargaining situa-
examined three theoretical approaches: individual differences, tions, the gains of one party do not represent equal sacrifices by
motivational, and cognitive models. These approaches repre- the other. Pruitt (1986) gave the example of a couple in conflict
sent the most common theoretical orientations in the study of over where to spend a vacation. The husband prefers a cabin in
negotiation (Bazerman & Carroll, 1987; Neale & Northcraft, in the mountains; the wife prefers a luxury hotel on the seashore.
press). However, they do not exhaust the set of theoretical per- The husband is primarily concerned with location; the wife is
spectives in negotiation.1 Finally, third-party interventions (e.g., primarily concerned with accommodations. An integrative
mediation, arbitration) are not discussed (for reviews, see Ru- agreement is reached when the couple agree to vacation in a
bin, 1980; 1986; Sheppard, 1984). This review focused on the luxury hotel in the mountains. Many researchers contend that
interchange that occurs between two people attempting to re- most negotiation situations are integrative (Pruitt & Rubin,
solve a conflict of interest. 1986; Raiffa, 1982; Walton & McKersie, 1965). Although there
In the sections that follow, I discuss the characteristics and is no empirical evidence to support this contention, two logical
basic features of negotiation, identify economic and social-psy- arguments support it. The deductive argument is that two peo-
chological measures of negotiation performance, review the ple are more likely to have different priorities, risk preferences,
major theoretical approaches to negotiation, and examine and valuations of resources than they are likely to have identi-
current empirical research. I conclude by proposing a theoreti- cal preferences across such dimensions. Differences on any di-
cal and empirical research agenda. mension define opportunities for integrative trade-offs (Raiffa,
1982). The inductive argument is based on the large volume of
case studies of negotiation situations in which opportunities for
DEFINITION OF NEGOTIATION
integrative agreements have been identified (Lax & Sebenius,
Negotiation is the process whereby people attempt to settle 1985).
what each shall give and take or perform and receive in a trans- The negotiation process is the interaction that occurs be-
action between them (Rubin & Brown, 1975). A negotiation tween parties before the outcome. Negotiation processes in-
situation has five characteristics: (a) People believe that they clude communication between bargainers and behavioral en-
have conflicting interests; (b) communication is possible; (c) actments of bargaining strategies. The negotiation outcome is
intermediate solutions or compromises are possible; (d) parties the product of the bargaining situation. Negotiations may end
may make provisional offers and counteroffers; and (e) offers in impasse (i.e., the parties fail to reach a mutually acceptable
and proposals do not determine outcomes until they are ac- agreement) or in mutual agreement. In integrative and pure
cepted by both parties (Chertkoff & Esser, 1976; Cross, 1965; coordination situations, outcomes that result in mutual agree-
Schelling, 1960). ment may be examined in terms of the efficiency of the out-
The basic features of negotiation include the negotiating par- come. A negotiation outcome is said to be efficient or pareto
ties, their interests, the negotiation process, and the negotiation optimal if there does not exist some other feasible solution or set
outcome (Thompson & Hastie, 1990). A party to a negotiation of solutions that would improve the utility of one or both par-
is a person (or a group of persons with common interests) who ties while not hurting either party (Nash, 1950). Finally, negotia-
acts in accord with his or her preferences. The interests of negoti-
ators are the preferences or utilities that each person has for the 1
At least two other approaches have been acknowledged: a commu-
resources to be divided (Walton & McKersie, 1965). The struc-
nications approach and a structural approach (for reviews, see Chat-
ture of the bargaining situation is determined by the degree of man & Sondak, in press; Neale & Northcraft, in press). In general,
conflict between parties' interests. Pure conflict exists when these approaches are more piecemeal and less well developed than
parties' interests are perfectly negatively correlated; that is, any those reviewed in this article.
outcome that increases one party's utility decreases the other 2
Technically, the label integrative also includes purely compatible
party's utility in a fixed-sum fashion. Pure conflict situations situations. In this discussion, integrative refers to situations character-
are known as fixed-sum or purely distributive negotiations ized by a partial conflict of interest.
NEGOTIATION BEHAVIOR AND OUTCOMES 517
tion outcomes are also examined in terms of the distribution of tors' reservation prices overlap; a negative bargaining zone ex-
resources among bargainers. ists if negotiators' reservation prices do not overlap. When a
positive bargaining zone exists, both negotiators gain from mu-
tual agreement; when a negative bargaining zone exists, negotia-
MEASURES OF NEGOTIATION BEHAVIOR
tors do not profit from mutual agreement. For example, if a
Measures of behavior and performance in negotiation may buyer's reservation price, or maximum amount that he or she is
be grouped into two general categories: economic and social- willing to pay for a used car is $700 and the seller's reservation
psychological measures. Economic measures focus on the out- price, or the minimum amount that he or she is willing to
comes or products of the negotiation and are derived from ax- accept is $600, a positive bargaining zone exists. A negative
ioms of individual rationality and normative analyses of negoti- bargaining zone would exist if the buyer's reservation price was
ation behavior (Nash, 1953). Social-psychological measures $600 and the seller's reservation price was $700.
focus on both the processes and the outcomes of negotiation
and are based on elements and processes of social perception Creating Resources: Integrative Bargaining
(Thompson & Hastie, 1990). Of course, social-psychological
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measures may influence economic measures of performance, When negotiators' interests are not purely competitive, nego-
This document is copyrighted by the American Psychological Association or one of its allied publishers.
and vice versa. The measures are distinguished here because tiation involves not just dividing resources (distributive bar-
many research programs have not included both in their analy- gaining) but identifying additional value, benefits, and re-
ses, and comparative analyses of behavior are difficult when sources (integrative bargaining). The economic definition of
investigators use different measures of performance. Appar- integrative bargaining is precise and refers to whether nego-
ently inconclusive results and even contradictory findings may tiated outcomes are efficient, or pareto optimal. In empirical
often be traced to different measures of performance. The key examinations of negotiation behavior, researchers have used
distinction is one of perspective: Negotiators typically do not different operationalizations of this economic definition. Typi-
perform a full, rational analysis of the negotiation situation cally, negotiators' outcomes are summed to form a measure of
either because the relevant information is not available or be- joint profit, which is used as a measure of integration.5 Integra-
cause they ignore or distort information (Thompson & Hastie, tive agreements allow negotiators to achieve greater utility, al-
1990). Negotiators' perceptions may differ substantially from low negotiators to avoid potential stalemates, are more stable
objective economic analyses (Thompson & Hastie, in press). over time, foster harmonious relations between parties, and
contribute to the welfare of the broader community (Pruitt &
Rubin, 1986). Pruitt (1983; Pruitt & Rubin, 1986) identified
Economic Measures several strategies for reaching integrative agreements, including
Economic measures are based on axioms of individual utility logrolling, in which negotiators make trade-offs between issues
usually attributed to von Neumann and Morgenstern (1947) so that each party gets all or most of his or her preferred out-
and on Bayesian Decision Theory (deGroot, 1970) and repre- come on important issues but concedes on issues of little im-
sent the most well-formulated specifications of optimal negotia- portance (Froman & Cohen, 1970). Thompson and Hastie (in
tion performance. Economic measures are primarily axiom- press) noted that negotiators may reach integrative agreements
atic; that is, they focus on the outcomes or products of negotia- by identifying compatible issues. Compatible issues are issues
tion and do not specify the processes or methods necessary or for which negotiators have similar preferences.
sufficient to yield such outcomes. Three measures of perfor-
mance are specified by normative bargaining models (Nash, Claiming Resources: Distributive Bargaining
1953). All negotiation situations, except those in which parties have
completely compatible interests, involve a distributive compo-
Mutual Agreement
3
This is generally true, but subtleties arise depending upon the par-
According to most economic bargaining models, negotiators
ticular task. For example, Myerson (1987) proved that impasses occur
should reach a mutual agreement if the alternative (known as even when there are gains to trade when bargainers do not have com-
the disagreement outcome) is worse than what they could plete information.
achieve through agreement with the other party.3 Simply stated, 4
Whereas it is generally assumed that reservation prices are stable
negotiators should reach an agreement with the other party if it and exogenously determined (e.g., they do not change as a result of the
is in both their interests to do so. The utility of a mutual agree- bargaining process), other closely related concepts, such as compari-
ment is determined by the zone of agreement defined by negoti- son level for alternatives (Thibaut & Kelley, 1959), minimum necessary
ators' reservation prices (Raiffa, 1982). A negotiator's reserva- share (Kelley, Beckman, & Fischer, 1967), reservation points (Walton
tion price represents the minimum that he or she will settle for; & McKersie, 1965), and minimum disposition (Ikle & Leites, 1962) are
anything less represents an outcome that is worse than the dis- more labile.
5
Lax and Sebenius (1987) argued that joint profit is not an especially
agreement outcome. Simply put, an individual's reservation
sensitive measure of integration and developed a measure, called the
price is the point at which he or she can achieve equal or greater integrative quotient, that measures the distance of the outcome from
utility by engaging in another course of action (e.g., dealing with the pareto optimal frontier. The few researchers who have used this
another party or simply maintaining the status quo).4 Bargain- measure have reported high correlations between this measure and the
ing zones may be positive or negative (Raiffa, 1982; Walton & typical measure of joint profit (Weingart, Thompson, Bazerman, &
McKersie, 1965). A positive bargaining zone exists if negotia- Carroll, 1990).
518 LEIGH THOMPSON
nent (Lax & Sebenius, 1985). The distributive component re- Negotiators' judgments of the fairness of the procedures and
flects the primary motivation of negotiators: to maximize their outcomes of negotiation and their expectations and perceived
utility.6 A fundamental task for the negotiator is to divide re- norms concerning appropriate behavior are examples of social
sources in such a manner that he or she keeps most of the perception in negotiation (Schelling, 1960; Thibaut & Walker,
bargaining surplus. The bargaining surplus is the difference 1975; Tyler, 1986). Negotiators' perceptions of bargaining situa-
between one's reservation price and the final settlement tions are influenced by their implicit theories of bargaining,
(Raiffa, 1982; Walton & McKersie, 1965). conflict, and negotiation (Carroll & Payne, in press). These
mental structures are typically represented as lists of features or
Social-Psychological Measures as temporal sequences of events, or scripts, with specific fea-
tures, variables, and default values (Abelson, 1976). Bazerman
Social-psychological measures of negotiation performance and Carroll (1987) described several examples of bargaining
are based on concepts of social perception (Allport, 1955). The scripts, such as "the car-buying script," "the bidding war script,"
elements of social perception include most aspects of per- and so forth. Negotiators' perceptions of bargaining situation
ceivers' social worlds: people, their behaviors, and contexts or also include their views of the structure of the bargaining task:
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
situations (Schneider, Hastorf, & Ellsworth, 1979). The most purely competitive, cooperative, or integrative (Thompson &
This document is copyrighted by the American Psychological Association or one of its allied publishers.
important elements of social perception in negotiation are nego- Hastie, 1990). Pinkley (1990) noted that negotiators' percep-
tiators' perceptions of the bargaining situation, the other party tions of conflict are multidimensional and may be character-
or bargaining opponent, and themselves (Thompson & Hastie, ized by three bipolar dimensions, or "conflict frames": relation-
1990). ship-task, emotional-intellectual, and compromise-win.
The key principles of social perception can be summarized
as list of principles or features (Schneider et al, 1979; Shaver, Perceptions of the Other Party
1987). People actively perceive their social world by selecting,
categorizing, interpreting, and inferring information. For exam- Perceptions of one's negotiation opponent include many of
ple, negotiators do not know what the interests of the other the processes and elements associated with the more general
party are but instead make inferences about their opponent process of person perception and impression formation. An
(Hammond et al, 1975; Harsanyi, 1962). In some sense, negotia- important and powerful aspect of person perception is evalua-
tors may not be aware of their own interests and values (Fisch- tion or liking (Osgood, Suci, & Tannenbaum, 1957). Relevant
hoff, Slovic, & Lichtenstein, 1980; March, 1978) but rely on dimensions in negotiation include negotiators' liking and at-
cues to guide their behavior and choice (Bern, 1967). The per- traction to the other party and their perceptions of the other
ception process is constructive and selective; that is, perception party's trustworthiness and fairness. Perceptions of the other
is influenced by the salience of information and the order in party include the trait inferences that negotiators make about
which information is presented, as well as by perceivers' expec- the other party's intelligence, sociability, expertise, skill, ability,
tations, knowledge, and experience. Finally, people's percep- cooperativeness, and competitiveness. Perceptions of the other
tions influence their behavior. party also include the attributions that negotiators make to ex-
The principles of social perception have special implications plain the behavior of their bargaining opponent and the predic-
for negotiation situations. In most bargaining situations, negoti- tions they make about the opponent's future behavior. Percep-
ators do not have the information necessary to perform an ob- tions of the other party include negotiators' behavioral inten-
jective analysis of the bargaining situation. Consequently, nego- tions, such as their willingness to interact with the other party
tiators' perceptions of the bargaining situation may be quite in the future. Perceptions of the other party are hypothesized to
different from that provided by an objective economic analysis be mentally represented in memory as a person or role schema
(Bazerman & Carroll, 1987; Thompson & Hastie, 1990, in (Taylor & Crocker, 1981), in which a person node with the label
press). Negotiators' perceptions may not only differ from objec- associated with the opponent is connected to a list of features or
tive analyses but may also differ from those of the other party. characteristics describing the person (Bazerman & Carroll,
Thus two people involved in the same conflict may have differ- 1987; Hastie & Kumar, 1979).
ent perceptions about the basis of conflict (Hammond et al.,
1975; Pinkley, 1990). People may perceive a conflict of interest Perceptions of the Self
when in fact none exists, or they may fail to perceive conflict Perceptions of the self include many of the dimensions rele-
when it does exist (Hammond, et al., 1975; Thompson & Has- vant to perceptions of the bargaining opponent, such as skill,
tie, in press). A number of cognitive and motivational heuristics cooperativeness, fairness, and so forth. Self-perceptions also
have been found to disturb the accuracy of social information include negotiators' judgments of their own interests, values,
processing in a variety of domains (Fiske & Taylor, 1984; Mar- goals, and risk preferences (Fischhoff et al., 1980); social com-
kus & Zajonc, 1985), and similar heuristics have been found to parisons between the self and the other party (Zechmeister &
bias judgment and affect behavior in negotiation (Bazerman &
Neale, 1983; Thompson & Hastie, 1990, in press).
6
In most cases, the maximization of utility is assumed to be equiva-
Perceptions of the Negotiation Situation lent to maximizing one's own gains. Most economic models assume
that people seek to maximize their own gain. However, some descrip-
Perceptions of negotiation situations involve the judgments tive approaches do not assume that negotiators' goals are to maximize
that people make about the bargaining process and outcome. self-gain.
NEGOTIATION BEHAVIOR AND OUTCOMES 519
Druckman, 1973); self-evaluations; and self-presentational high-high, and low-high Machiavellian people and allowed
concerns (Brown, 1968; Hiltrop & Rubin, 1981; Pruitt & John- some to bargain face to face; others bargained through a barrier
son, 1970). The hypothesized mental structures used to repre- that obstructed visual contact. Fry hypothesized that the low-
sent self-perceptions are self-schemata (Markus, 1977). high pairs negotiating face to face would be most likely to fail to
reach agreement because the low-Machiavellian bargainer
THEORETICAL APPROACHES AND MODELS would be susceptible to the strong emotional appeals advanced
by the high-Machiavellian bargainer. The hypothesis was sup-
Most descriptive theories and approaches of negotiation be- ported. Failure to reach mutual agreement was attributed to the
havior may be classified into one of three broad domains: indi- low-Machiavellian bargainer, who suggested significantly fewer
vidual differences, motivational, and cognitive models (Bazer- potential solutions when negotiating face to face with a high-
man & Carroll, 1987; Carroll & Payne, in press; Neale & North- Machiavellian bargainer.
craft, in press). I now describe each approach and examine
empirical research on economic and social-psychological mea- Joint Outcomes
sures of performance.
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inconsistency may be attributable partly to the task. These re- Perceptions of the Self
sults also suggest that trait Machiavellianism may not directly
influence negotiation behavior but may instead interact with There is some evidence for sex differences in terms of negotia-
situational and task constraints to influence performance. tors' evaluations of their own performance (Kimmel et al.,
Cognitive ability. Cognitive reasoning skills have been pre- 1980; Turnbull et al., 1976). Women engage in more self-deroga-
dicted to increase negotiators' ability to claim resources. For tion during negotiation than do men (Kimmel et al, 1980).
example, Neale and Bazerman (1983) reasoned that negotiators Men perceive themselves as more powerful than do women
with high perspective-taking ability would be able to persuade (Turnbull et al, 1976). Again, although men evaluate them-
their opponents to settle close to their reservation price and selves more favorably than women evaluate themselves, there is
therefore claim most of the bargaining surplus for themselves. no clear evidence suggesting that men actually perform better
Results supported the hypothesis: Negotiators with high per- than women.
spective-taking ability earned higher outcomes than did those
with low perspective-taking ability. Neale and Bazerman con- Discussion
cluded that bargainers with high perspective-taking ability are
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
able to learn more information about their opponent, which On the basis of the studies examined in this review, there is
This document is copyrighted by the American Psychological Association or one of its allied publishers.
allows them to accurately assess their opponent's goals, expec- some suggestion that certain individual differences may be re-
tations, and reservation price. However, Greenhalgh and Nes- lated to bargaining behavior. The clearest relationships appear
lin (1983) found that perspective-taking ability was not predic- among cognitive reasoning ability and individual performance
tive of individual utility. Again, the task and the dependent and among gender and perceptions of negotiation. However,
measure of performance were different from those used by these conclusions are based on a small number of studies and
Neale and Bazerman. The impact of perspective-taking ability should therefore be viewed as tentative. A further caveat is that
on performance may depend in part on the particular bargain- researchers have not been consistent in their reporting of sex
ing situation. differences; many report sex difference effects as a secondary
analysis. The implication is that in a large number of studies,
the researchers also performed secondary analysis and did not
Social-Psychological Measures find or did not report null results for gender.
The scant number of clear relationships observed in this re-
Investigators of individual differences on social-psychologi- view is consistent with Hamner's (1980) conclusion that there
cal measures have primarily explored the direct effects of are few significant relationships between personality and nego-
gender and sex role orientation on perceptions. tiation outcomes. Some researchers have even stated this more
forcefully: "From what is known now, it does not appear that
there is any single personality type or characteristic that is di-
Perceptions of the Bargaining Situation rectly and clearly linked to success in negotiation" (Lewicki &
Although there is no clear evidence suggesting that men are Litterer, 1985, p. 276). However, this conclusion is incomplete
more or less effective negotiators than are women, men may and overly simplistic. It is only reasonable to assume that indi-
perceive conflict differently than do women (Gilkey & Green- vidual characteristics influence bargaining behavior. People ex-
halgh, 1984; Pinkley, 1990; Zechmeister & Druckman, 1973). hibit a great deal of consistency across situations, and this sug-
In general, men are more concerned with winning and maxi- gests that personality is an important influence on social behav-
mizing their outcomes, whereas women are more concerned ior (Staw & Ross, 1985).
with maintaining the relationship. For example, Pinkley found So, why do individual differences not appear to play a central
that women were more likely than men to interpret a conflict role in experimental investigations of negotiation? There are
situation in relationship terms, whereas men were more con- several possible explanations (Lewicki & Litterer, 1985). First,
cerned with the exchange of resources. Zechmeister and individual differences are often measured with a homogeneous
Druckman (1973) reported that men rated "coming out favor- sample of subjects, usually college students. The failure to ob-
ably" as more important than did women. serve relationships between individual differences and bargain-
ing behavior may be attributed partially to the narrow range of
individual differences within subject populations (Hamner,
1980). A second possibility concerns the assessment of individ-
Perceptions of the Opponent
ual differences. Most individual differences are assessed by
Women tend to perceive their opponents as similar to them- means of paper-and-pencil measures. However, the key depen-
selves, whereas men perceive themselves as fundamentally dif- dent variables of interest in negotiation are typically behavioral
ferent from their opponents (Gilkey & Greenhalgh, 1984; Zech- measures of performance. Given the inconsistency between at-
meister & Druckman, 1973). Zechmeister and Druckman titudes and behavior and the unreliability of self-report mea-
(1973) found that women rated themselves as more similar to sures, behavioral assessment of individual differences may
their opponents in terms of attitudes toward racial problems yield more reliable and consistent relationships with social be-
(the subject of the negotiations) after negotiation than did men; havior (Staw & Ross, 1985). A third explanation is that other
Gilkey and Greenhalgh (1984) measured negotiators' sex role factors may outweigh the more subtle effects of personality in
orientations and found that "feminine" negotiators were more bargaining (Davis-Blake & Pfeffer, 1989). Monson, Hesley, and
empathic than were "masculine" negotiators. Chernick (1982) suggested that personality is more predictive
NEGOTIATION BEHAVIOR AND OUTCOMES 521
of behavior in ambiguous situations than in settings in which the likelihood of an impasse. Two separate lines of evidence
there are strong prescriptions for behavior. Fourth, personality support this prediction: studies of constituency pressure and
may not exert main effects on negotiation performance but explicit goal setting.
rather may interact in complex ways with situational factors Constituency pressure. The first line of support is based on
and characteristics of the particular task (Fry, 1985; Harnett, studies in which researchers examined aspirations indirectly,
Cummings, & Hughes, 1968). This alternative suggests that a typically by manipulating the amount of constituency pressure
contingency approach may have more predictive validity than a on bargainers (Carnevale, Pruitt, & Britton, 1979). The hypoth-
direct-effect model. Fifth, the absence of a comprehensive esis is that negotiators who represent a larger group or constitu-
theory relating individual differences to negotiation behavior ency feel accountable to their constituency and pressured to
makes it difficult to identify clear relationships. Finally, it may meet their goals and, consequently, adopt higher aspiration lev-
be that individual characteristics of bargainers exert their im- els and remain firmer in their aspirations than do negotiators
pact on prenegotiation behaviors—that is, factors that predis- who are not under constituency pressure (Neale, 1984; Pruitt &
pose people to avoid or engage in negotiation, rather than on Lewis, 1975; Tjosvold, 1977). Tjosvold (1977) found that negoti-
bargaining behavior per se (Emmons & Diener, 1986). In this ators under constituency pressure to maximize gains were
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
sense, individual differences act as an important self-selection more likely to reach impasses than were those whose constitu-
This document is copyrighted by the American Psychological Association or one of its allied publishers.
process in negotiation that is not captured by extant measures encies encouraged them to reach a fair outcome. In a similar
of negotiation behavior and performance. study, Neale (1984) told some negotiators that their outcomes
would be determined by evaluations of their performance that
Motivational Approaches were made by constituency members (high constituency-pres-
Motivational models of bargaining behavior examine the in- sure group); others were not told that their outcomes were con-
fluence of aspirations and goals on bargaining behavior and tingent on constituency evaluations (low constituency-pressure
outcomes. Two general theoretical approaches have developed group). Impasses occurred more often when constituency pres-
within this broad area. According to one approach, aspiration sure was high.
is a continuous, unidimensional concept ranging from low to Explicit goal setting. The second line of support is based on
high (Hamner & Harnett, 1975; Siegel & Fouraker, 1960). Aspi- studies in which researchers attempted to manipulate negotia-
ration is denned in terms of utility theory, and a negotiator's tors' aspirations by providing them with a specific goal or tar-
aspiration level is represented as a position on his or her bar- get value to achieve. Most of this research has been conducted
gaining utility function (Siegel, 1957). In general, the member using the experimental bargaining market paradigm (cf. Bazer-
of the bargaining pair who has a higher level of aspiration ob- man, Magliozzi, & Neale, 1985). In experimental bargaining
tains a larger share of the joint profit (Siegel & Fouraker, 1960). markets, several buyers and sellers interact under the instruc-
Negotiators with high aspirations make smaller concessions, tion that they should complete as many profitable negotiations
make larger demands, take longer to reach agreement, and earn as possible in a fixed amount of time. Negotiators are given a
higher profits than do negotiators with low aspirations (Siegel & specific goal to achieve in the negotiation. This is typically
Fouraker, 1960). operationalized by instructing negotiators to meet or exceed a
The second approach differs from aspiration-level theories given payoff level. In general, negotiators who are given spe-
by positing that bargaining goals are not unidimensional and cific, challenging, or demanding goals complete fewer success-
that the maximization of gain is not the primary goal of bar- ful transactions than do those not given challenging goals (Ba-
gaining (Blake & Mouton, 1962; Pruitt & Rubin, 1986). Accord- zerman et al, 1985; Huber & Neale, 1987; Neale & Bazerman,
ing to the Dual Concern Model (Pruitt & Rubin, 1986), negotia- 1985a, 1985b; Neale, Northcraft, & Barley, 1988). One explana-
tors' goals are determined by two independent factors: negotia- tion of this finding is that negotiators with high aspirations
tors' concern for themselves and their concern for the other have more unsuccessful transactions (i.e, reach more impasses)
party. This approach also differs from aspiration-level theories than do negotiators with lower aspirations. However, an equally
in that utility functions are not continuous but are modeled as plausible interpretation is that negotiators with high aspirations
discrete functions. In the model, concern is either high or low do not make as many attempts to negotiate as do those with low
for each factor (self; other party), and the resulting product is a aspirations, perhaps because negotiators with high aspirations
four-cell matrix specifying the strategies associated with each spend a longer time negotiating (Neale & Bazerman, 1985b).
goal orientation. A key prediction of the Dual Concern Model Unfortunately, the number of transactions attempted, the num-
is that negotiators who have a high degree of concern for them- ber actually completed, and the time to complete them were
selves coupled with a high degree of concern for the other party not reported; so it is not possible to determine whether high
will reach more integrative outcomes than will negotiators who aspirations are related to higher impasse rates or simply fewer
are concerned only with maximizing their own outcomes, nego- attempts to negotiate. If high aspirations lead to more frequent
tiators who are concerned only with the other party, and negotia- impasses, a central question concerns the mechanism involved:
tors who are not concerned with themselves or the other party. Specifically, do high aspirations prevent negotiators from dis-
covering viable agreements, or are negotiators with high aspira-
Economic Criteria tions more reluctant to agree to proposals that barely exceed
their reservation price (cf. Kelley et al, 1967)? Stated another
Mutual Agreement
way, do bargainers become committed to positions and refuse
A key prediction of aspiration-level models is that high aspira- to move away from their demands, or are bargainers reluctant
tions block opportunities for mutual agreement and increase to adopt feasible solutions?
522 LEIGH THOMPSON
Dual Concern Model. The Dual Concern Model (Pruitt & plete negotiation transactions, which results in fewer transac-
Rubin, 1986) suggests that the relationship between aspiration tions completed within a fixed amount of time (Neale & Bazer-
and bargaining outcomes is more complex and requires consid- man, 1985b). Thus a curvilinear relationship between goal dif-
eration of negotiators' concern for the other party in addition to ficulty and total profitability exists when total profitability is
their own level of aspiration. According to the Dual Concern the product of the number and the value of completed transac-
Model, high concern for oneself coupled with low concern for tions. Again, this is an instance in which apparently contradic-
the other party increases the likelihood of an impasse because tory findings may be traced to different measures of perfor-
both parties will engage in contentious behavior rather than the mance.
problem-solving behavior hypothesized to be necessary for in- Dual Concern Model. According to the Dual Concern
tegrative agreement. In contrast, negotiators who have high aspi- Model, the relationship between goals and outcomes is more
rations coupled with concern for the other party should be complex and requires consideration of negotiators' attitudes to-
more likely to engage in problem solving that results in mutual ward the other party (Pruitt & Rubin, 1986). The prediction is
agreement (Pruitt & Rubin, 1986). The empirical evidence that high aspirations will increase joint outcomes only when
bearing on this hypothesis is mixed. Two studies have found the negotiator is concerned with the interests of the other party.
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
vidual outcomes than do bargainers not given explicit goals to points. Thus high aspirations may improve individual and joint
achieve (Huber & Neale, 1986,1987; McAlister et al, 1986)." outcomes in some situations but lead to an unnecessary im-
One complication with providing negotiators with an explicit passe in other situations. Economic bargaining theory cannot
goal is that the goal may not be adopted by the subject or the account for these empirical findings because aspirations or tar-
goal may provide clues to subjects about the structure of the get values are theoretically independent of reservation prices,
negotiation task. Simply put, a negotiator who is told to maxi- and it is reservation price that determines the size of the bar-
mize joint gain rather than individual gain may realize that the gaining zone and hence the likelihood of impasse. The empiri-
experimenter's game does not contain a fixed amount of re- cal evidence suggests, however, that aspiration values and reser-
sources. Similarly, the bargainer who is instructed to try to earn vation price are not independent and that increasing the negoti-
a large amount of profits may similarly (and accurately) reason ators' target value also affects their reservation price. This of
that there may be more resources available than a fixed-sum course suggests that reservation price is not exogenously deter-
situation would dictate. One solution to these cuing problems is mined but a psychological value. The most likely psychological
to measure goals, rather than to manipulate goals. For example, explanation of this relationship is the anchoring and adjust-
Hamner and Harnett (1975) measured negotiators' aspirations ment heuristic in which one estimates a value or a position on a
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
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and found that bargainers with higher aspirations were more dimension by starting with some initial value (anchor) and then
successful than were those with lower aspirations. adjusting it (Tversky & Kahneman, 1974). Typically, adjust-
ment is insufficient (e.g, the judgment of the new position is too
Social Psychological Measures close to the initial value).
The primary theoretical concerns with motivational ap-
A small number of researchers have examined the implica- proaches are the operationalization and measurement of aspira-
tions of constituency pressure on negotiators' perceptions of tions. The common method used to examine aspiration is to
bargaining. In general, constituency pressure is hypothesized instruct negotiators to meet or exceed an explicit, fixed payoff
to increase negotiators' aspirations (Carnevale et al, 1979). level. However, experimenter-provided goals may not act as an
aspiration as intended but may instead provide subjects with
Perceptions of the Bargaining Situation unintentional information about the structure of the bargain-
ing task (e.g, a variable-sum structure). Furthermore, there is
Negotiators under constituency pressure view bargaining sit-
typically no assessment to indicate whether bargainers accept
uations as more competitive and less productive than do bar-
the experimenter-provided goals. Another problem is that nego-
gainers who do not represent a constituency or at least do not
tiators' goals may change during the course of bargaining
feel pressured to maximize profits for a constituency (Druck-
(Werner & Tietz, 1982), yet in empirical analyses researchers
man & Zechmeister, 1973; Tjosvold, 1977; Zechmeister &
have assumed goals are stable throughout bargaining.
Druckman, 1973). Negotiators whose constituencies pressure
The Dual Concern Model represents a dramatic shift from
them to maximize individual profits report less willingness to
traditional bargaining theories that view aspiration as a continu-
compromise, fewer efforts to be just, and fewer feelings of gen-
ous, unidimensional concept in which the primary objective
erosity than do negotiators whose constituencies are committed
attributed to negotiators is that of maximizing individual gain.
to "justice" (Tjosvold, 1977). Negotiators who confer with their
A key concern with the Dual Concern Model is the experimen-
constituency to formulate arguments before negotiation are
tal incentives and the theoretical concepts. Subjects are typi-
more likely to view negotiation as a win-lose, competitive en-
cally instructed to earn as many points as they can in a negotia-
terprise than are negotiators who spend time with members of
tion task in which they know only their own preferences. This
the other party before negotiation (Druckman & Zechmeister,
aspect of the experiment is designed to induce a high concern
1973). Thus constituency pressure in the form of sanctions and
for oneself. Then subjects are told that they should expect to
evaluations reduces the bargainer's perception of personal con-
interact with the other party in the future (Ben%av & Pruitt,
trol and satisfaction with the bargaining process, but it does not
1984a, 1984b) or are given a small gift from the experimenter
necessarily hinder the quality of the economic outcomes and
(Pruitt et al, 1982). This aspect of the experiment is designed to
may even improve performance when constituents provide ne-
heighten negotiators' concern for the other party. However, it is
gotiators with specific goals to achieve.
unclear whether this manipulation actually produces greater
concern for the other party; no manipulation checks are re-
Perceptions of the Other Party ported. Furthermore, even if subjects are motivated to care
Tjosvold (1977) found that negotiators under pressure from about the other party, it is not clear how they transform their
their constituencies to maximize gains perceived themselves as motivation into behaviors and strategies, given that they do not
more dissimilar to their opponents than did negotiators who know the interests of the other party.
were not under pressure to maximize gains. A more serious concern with the model is that the experimen-
tal manipulations used to induce concern for the other party
Discussion
Aspirations play an important role in determining bargain- 8
A methodological complexity is the fact that the higher joint out-
ing behavior and performance. The research findings are clear comes obtained in the high-aspiration conditions are confounded with
but complex: Higher aspirations increase profitability but de- the measure of individual profit. A pure measure of individual profit
crease negotiators' willingness to concede from their target would require a comparison of outcomes within each bargaining pair.
524 LEIGH THOMPSON
also contain unintentional clues about the variable-sum struc- locations, and it diminishes sharply with the distance from the
ture of the task. Simply put, if negotiators are told to maximize source of activation (Anderson, 1985). An executive monitor
joint outcomes, they may logically conclude that the task is not controls the information-processing system by operating on
a fixed-sum game. Thus the goal orientation is confounded goals and plans organized into a control structure hierarchy.
with information about the structure of the task. The larger information-processing system comprises a series of
The model also has difficulty accounting for how negotiators component locations that are referred to as independent memo-
who have individualistic orientations (e.g., no or little concern ries. The information-processing system tends to behave eco-
for the other party) reach integrative outcomes (Bazerman et al, nomically to accomplish it goals by expending a minimum
1985; Kelley, 1966; Kimmel et al, 1980; Thompson & Hastie, in amount of time and processing resources. This tendency gives
press). According to the Dual Concern Model, integrative out- rise to heuristics or cognitive shortcuts that facilitate informa-
comes are reached through joint problem-solving in which both tion processing but often produce inaccurate judgments and
parties are concerned with each other's welfare. However, high biases (Tversky & Kahneman, 1974).
joint outcomes may be reached without problem-solving ef- Researchers have enhanced theoretical development of the
forts, through the efforts of each party to pursue his or her own cognitive approach by identifying the judgment tasks that nego-
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
interests (Kelley & Schenitzki, 1972). The model has similar tiators face (Carroll & Payne, in press; Thompson & Hastie,
This document is copyrighted by the American Psychological Association or one of its allied publishers.
difficulty explaining how negotiators who are presumably 1990), examining negotiators' mental representations of the
highly concerned with their opponents' welfare (e.g., partners in task and their opponent (Carroll, Bazerman, & Maury, 1988;
romantic relationships) fail to reach mutually beneficial out- Pinkley, 1990; Thompson & Hastie, in press), examining the
comes (Fry, Firestone, & Williams, 1983). accuracy of negotiators' judgments (Bazerman & Carroll, 1987;
Finally, the model is restrictive and difficult to generalize. Thompson & Hastie, in press), and exploring the relationship
Concern for oneself and another is modeled in an overly sim- between judgment and behavior (Thompson & Hastie, in
plistic fashion: either high or low. It is possible that negotiators press). Methodologies, such as recall and think-aloud measures
have more complex goals, such as a desire to reach a fair out- are used to examine information processing and judgment in
come (Loewenstein, Thompson, & Bazerman, 1989; Schelling, negotiation (Carroll et al, 1988; Thompson & Hastie, 1990, in
1960). These alternative goals are not captured by the model. press). A number of judgment errors have been identified in
Furthermore, the model's predictions are limited to situations negotiation (Bazerman & Neale, 1983; Thompson & Hastie,
in which negotiators have the same bargaining orientation. It is 1990, in press), and heuristic information processes similar to
not clear what predictions would be made for situations in those identified in individual decision-making tasks are hy-
which negotiators have different motivational orientations. pothesized to guide social judgment and behavior in negotia-
tion.
Cognitive Approach
According to the cognitive approach, negotiation is a com- Economic Criteria
plex decision-making task in which negotiators are faced with Mutual Agreement
alternative courses of action, and choices among behavioral al-
ternatives are determined by negotiators' judgments of the task Neale and Bazerman (1985a) derived a prediction from pros-
(Bazerman & Carroll, 1987). Negotiators construct mental rep- pect theory to examine whether a negotiator's mental represen-
resentations of the negotiation situation and their opponent, tation of the task, or cognitive frame, influences bargaining
and their behavior is influenced by their judgments of the other behavior. According to prospect theory (Kahneman & Tversky,
party, their own bargaining role, and the bargaining situation. 1979), people have different utility functions for gain and loss,
The basis of the cognitive approach is information-process- and objectively identical decision tasks produce different
ing theory (Bazerman & Carroll, 1987; Carroll & Payne, in choices among identical options when the reference point de-
press). Cognitive information-processing theory is a theory of fining gain and loss is altered. The hypothesis was that negotia-
the mind of the individual actor. The essential elements of the tors who were risk averse would be more likely to make conces-
information-processing approach are presented as a list of gen- sions to avoid an impasse; in contrast, risk-seeking negotiators
eral principles briefly described here (see Anderson, 1985, and would be less likely to make concessions and more likely to risk
Hastie, 1986, for more extensive treatments). The fundamental an impasse. Neale and Bazerman examined two factors that
material of the information-processing approach is informa- they thought would affect risk aversion: the framing of negotia-
tion. Information is typically represented as a list of features; tion payoffs and negotiators' judgments of the probability that
concepts are represented as nodes labeled with a word or a their offer would be selected by a neutral third party under
phrase, and relations between idea nodes are symbolized theo- final offer arbitration. They manipulated reference points by
retically as links in a network. Information is stored in memory instructing some negotiators to "maximize gain" and providing
in one of several alternative structures. The most common is a negotiators with payoff schedules containing positive numbers;
list of concepts, wherein each concept is linked to one or two negotiators with a negative frame were instructed to "minimize
adjacent nodes. Information is available according to simple loss" and were provided with a payoff schedule containing nega-
spreading-activation principles. Activation spreads from a tive numbers. Of course, the negotiation tasks were objectively
currently active location in a knowledge structure to other identical. Neale and Bazerman further hypothesized that nego-
nearby locations; the spread is rapid, and the amount of activa- tiators who believed that an arbitrator would choose their offer
tion of proximate locations is inversely related to the number of under final offer arbitration would be less likely to compromise
NEGOTIATION BEHAVIOR AND OUTCOMES 525
and more likely to risk reaching an impasse than would negotia- party places the same importance on, or has the same priorities
tors who were less confident that their offer would be selected. for, the negotiation issues as they do when in fact negotiators
They therefore instructed half of the negotiators in their sample have different priorities is referred to as the fixed-pie error (Ba-
about the overconfidence judgment error; the remaining half zerman & Neale, 1983; Thompson & Hastie, in press). Thomp-
were not given training. As predicted, negotiators who viewed son and Hastie (1990, in press) measured negotiators' percep-
negotiation in terms of minimizing loss and who believed that tions several times during negotiation and found that judgment
their offer would be chosen in the case of final offer arbitration accuracy was strongly related to negotiation outcomes: negotia-
were more likely to reach an impasse. Neale and Bazerman tors who made accurate priority and compatibility judgments
concluded that framing affects negotiation behavior in a man- attained higher joint outcomes than did those who made fixed-
ner similar to that observed in individual decision-making pie and incompatibility errors. The conclusion was that negotia-
tasks. tors' perceptions influence their behavior and the quality of
their outcomes.
Joint Outcomes
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Claiming Resources
This document is copyrighted by the American Psychological Association or one of its allied publishers.
Social Psychological Criteria negotiators' values and the other party's interests. When negoti-
ators are uncertain about their own interests or have conflicting
Perceptions of the Bargaining Situation interests, then reactive devaluation processes most likely char-
Bazerman and Neale (1983) speculated that negotiators bring acterize bargaining behavior. However, when negotiators' own
a fixed-pie, or win-lose, perception to negotiation. They fur- interests are available and clear, then fixed-pie and incompati-
ther argued that the fixed-pie perception represents a faulty bility inferences characterize bargaining behavior. The impor-
judgment when negotiation situations are truly integrative or tant implication is that both inference processes lead to the
provide opportunity for joint gain. Thompson and Hastie perception of conflict between parties.
(1990) measured negotiators' perceptions immediately before, 5
min into, and immediately after an integrative negotiation task. Perceptions of the Self
The majority of negotiators entered negotiation with a fixed-pie
perception of the task. As the negotiation progressed, some Self-serving evaluations. Negotiators make self-serving attri-
negotiators learned that the other party's interests were not com- butions and evaluations in bargaining (Brandstatter, Kette, &
pletely opposed to their own. However, misperceptions after Sageder, 1982; Turnbull et al, 1976). For example, negotiators
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
ation. The aim of information-processing approach is to obtain I made clear distinctions among the individual differences,
a "picture" of the negotiator's mind—to understand its pro- motivational, and cognitive approaches. However, I do not
cesses and products. In order to accomplish this, it is necessary mean to imply that these theoretical approaches are necessarily
to move away from comparing negotiators' behavior with pre- contradictory. The approaches focus on different constructs,
dictions derived from normative models and, instead, focus on and few researchers have attempted to pit one approach against
the cognitive processes of negotiators. This approach, of course, another. Instead, investigators in recent analyses have at-
requires that researchers include social-psychological measures tempted to integrate these approaches by developing frame-
in their investigations of bargaining behavior to examine negoti- works that include personality, motivation, and cognitive pro-
ators' perceptions. cesses (Bazerman & Carroll, 1987; Neale & Northcraft, in
A unique set of problems arises from the imperfect mapping press). These frameworks are primarily structural and serve
of cognitive information processing theory onto the study of chiefly to organize the large literature on negotiation rather
negotiation. One limitation of the cognitive approach is the than to derive implications and testable predictions.
impoverished treatment of motivational factors. Although con- The purpose of this article is not to propose a new theory of
cepts of utility, aspiration, and goals are acknowledged, their negotiation behavior but to identify the elements and processes
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
representation and relationship to judgment and decisions are that should be included and the phenomena that must be ex-
This document is copyrighted by the American Psychological Association or one of its allied publishers.
not well specified. This task becomes even more complicated plained by a psychological theory of negotiation. First, the
when models posit the existence of goals more complex than theory should be accessible to objective, economic analysis;
simple economic utility maximization. that is, the theory should provide a way of measuring concepts
An implicit assumption of the cognitive approach is that such as the bargaining zone, integrative outcomes, and distribu-
many of the judgment phenomena that occur in individual tive bargaining outcomes. Second, a theory of negotiation
decision-making tasks may be extended to the interpersonal should explain the perceptual experience of negotiators and
task of negotiation. Consequently, many of the phenomena their judgment processes. The most enduring and robust per-
studied have been those explored in individual judgment tasks. ceptions include the fixed-pie perception, self-serving attribu-
This reasoning however, constrains the scope of theoretical tions, and gain and loss frames of reference. Third, a theory
analysis. In extending individual judgment phenomena to nego- should explain the relationships between judgment and behav-
tiation tasks, researchers often ignore the interactive nature of ior in negotiation, such as those between fixed-pie perceptions
negotiation. It is assumed that negotiators' perceptions and and outcomes and between gain/loss frames of reference and
judgments are relatively static and do not change as a function performance. Fourth, in addition to explaining the correspon-
of the influence of the other party. Furthermore, such assump- dences between judgment and behavior, the theory should ex-
tions often constrain the focus of analysis: Individual judgment plain discrepancies. Discrepancies occur on the general level
phenomena that may be easily extended to negotiation situa- between social-psychological and economic measures. For ex-
tions are most often studied. ample, although most negotiators fail to realize that their inter-
Finally, the identification of judgment errors and biases is ests may be completely compatible with those of their oppo-
problematic. Judgment errors and biases are hypothesized to be nent, many are able to reach optimal agreements on these issues
the major cause of ineffective negotiation behavior and subopti- anyway (Thompson, 1990, in press-a). Discrepancies also occur
mal outcomes. An analysis of judgment error and bias requires on a more local level; for example, aspiration levels affect per-
consideration of three elements: a judgment, a standard or a ceptions of reservation price. Finally, motivation and goals are
criterion of truth, and a rule specifying a correspondence rela- essential ingredients in a theory of negotiation. The fundamen-
tion between the judgment and the criterion (Hastie & Ra- tal elements of negotiation imply the existence of motivation
sinski, 1988). It has been hypothesized that negotiators ignore (e.g, interests, utilities), and aspirations are clearly empirically
relevant information and distort otherwise accurate informa- related to behavior and performance. In economic analyses,
tion (Carroll et al., 1988). However, it is also possible that negoti- researchers typically assume that negotiators' primary motiva-
ators may not have the necessary information to make accurate tion is to maximize their own gain. However, negotiators' goals
judgments of the other party because of insufficient or decep- are undoubtedly more complex, and they are clearly concerned
tive information exchange (Pruitt & Lewis, 1975; Thompson, in with the outcomes of the other party as well as their own (Loe-
press-a). Under such circumstances, it is not appropriate to wenstein et al, 1989; Messick & Sentis, 1985; Schelling, 1960).
view inaccuracy as indicative of bias (Funder, 1987). The theory should provide a way of capturing alternate goals.
The list of theoretical imperatives outlined here is not ex-
CONCLUSIONS haustive. The temptation facing theoreticians is to develop con-
ceptual frameworks that encompass all the features and charac-
Theoretical Issues teristics of negotiation and apply to several levels of analysis.
However, I think that the most powerful theory of negotiation
It was clear before I wrote this article that normative models behavior will begin at the level of the individual negotiator.
do not adequately account for empirical observations of bar- This view, of course, is most consistent with the information-
gaining. My argument is that psychological theories of negotia- processing theory that is the basis of the cognitive approach
tion provide the best approach for understanding negotiation outlined in this article. In advocating this model as a basis for
behavior. The descriptive approaches examined in this article constructing a theory of the negotiator, I do not suggest that the
offer important insights for understanding negotiation, but interpersonal aspect of negotiation be ignored. I believe that
each also contains shortcomings and limitations. In this review, the theoretical task of understanding communication will be
528 LEIGH THOMPSON
facilitated once an understanding of the individual negotiator's frequently less than optimal. Although this empirical reality
mind is developed. Also, I do not suggest that the cognitive suggests that the normative model of negotiation does not ful-
approach is incompatible with motivational and aspiration fill a descriptive function, one can argue that the paradigm on
models of behavior. Quite the contrary. As noted earlier, a psy- which descriptive research is based does not provide an appro-
chological theory of negotiation behavior will need to include priate testing ground for the economic approach. Simply put,
motivational factors as well as social judgment processes. many of the studies that indicate that negotiation behavior and
It may help to clarify the relationship between motivational outcomes are inefficient have been based on examinations of
and cognitive models if I suggest an illustrative relation. A single or one-shot negotiation situations. One argument is that
current theoretical and empirical hole in negotiation research research findings observed in one-shot interactions are trivial
concerns how negotiators develop goals in bargaining. In most because inefficiencies are corrected by experience in the mar-
of the studies addressing the goal-performance relationship, ket (Grether & Plott, 1979). Although the precise mechanism
investigators experimentally manipulate goals by providing ne- by which experience improves performance is not well speci-
gotiators with a performance level to achieve or exceed. In the fied, experience is generally thought to provide individuals
absence of performance constraints imposed by experimenters, with feedback that they can use to correct their judgments (Ho-
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.
what determines the goals that negotiators adopt? One hypoth- garth, 1981). However, Einhorn (1980) noted that learning from
This document is copyrighted by the American Psychological Association or one of its allied publishers.
esis is that negotiators' goals are guided by their judgments of experience is difficult because feedback is often incomplete or
the amount of available resources and the other party's inter- delayed.
ests. Thus judgments influence bargaining aspirations, which This challenge is compelling because many negotiations take
guide behavior. The suggestion that goals guide behavior is not place not as isolated interactions but as part of a continuous
new; in some of the earliest and most important analyses of process (Carroll & Payne, in press; Hogarth, 1981; Raiffa,
negotiation behavior, researchers hypothesized that goals guide 1982). A modest but important set of studies has begun to
search and behavior (cf. Schelling, 1960; Siegel & Fouraker, address the question of whether people bargain more effec-
1960). What is new about this view is the role of judgment in tively if they gain experience. This research is characterized by
negotiation and the relationship between judgment and aspira- three paradigms: studies of expert negotiators, experimental
tions. Researchers have already begun to explore the assump- bargaining markets, and laboratory negotiation experiences.
tions that negotiators bring to negotiation and how perceptions
change during negotiation (cf. Thompson & Hastie, 1990, in Studies of Experts
press). The next important step is to explore the relationship
between judgments and goals. A widely held view is that experts—people who negotiate for
a living—should be better negotiators than are novices. Neale
and Northcraft (1986) compared experts' performance to ama-
Empirical Issues
teurs' performance on an integrative bargaining task. The ex-
Examination of the matrix created by the intersection of perts were corporate real estate executives with an average of 10
theory and research in this review highlights areas that are in years' experience; the amateurs were students at a state univer-
need of development. In general, economic measures of perfor- sity. The experts were more successful in reaching integrative
mance have been used more extensively than social-psychologi- outcomes in a novel bargaining task than were the amateurs. In
cal measures. I do not suggest that social-psychological mea- a similar analysis, Scholz et al. (1982) compared professionals
sures replace objective analysis; it is important to include both (head buyers of West German department stores) with nonpro-
measures in research programs. There are at least three reasons fessionals (vocational retraining students) on an integrative bar-
for this. First, negotiators typically do not have the information gaining task. Professionals resolved conflicts more quickly
necessary to make objective judgments of the bargaining situa- than did nonprofessionals but did not differ from them in
tion; their understanding of the bargaining situation is based terms of joint outcomes. However, the measures of joint perfor-
on their perceptions. A "picture" of the negotiator's perceptual mance in each study were different; the discrepancy may be a
experience seems to be important for a theory of negotiation. function of the different dependent variables used in each
Second, it is useful to compare negotiators' perceptions with study. In general, the research on professionals versus novices is
objective measures. Some of the most enduring questions in scant. One problem with comparisons of professionals with
psychology have to do with the study of accuracy of judgment nonprofessionals is the inability to infer a causal relationship
and perception (Funder, 1987; Hastie & Rasinski, 1987; Kru- between negotiation skill and performance; professionals
glanski, 1989). Researchers in other domains such as person differ in a number of other ways from novices. As a result, some
perception have been forced to rely on indirect methods that researchers have manipulated (rather than measured) experi-
infer error from subjects' tendencies to rely on "bad cues" and ence.
to ignore "good cues" or their failure to match the output of a
normative model (e.g., Nisbett & Ross, 1980). Negotiation with Experimental Bargaining Markets
its well-defined, objective task structure provides an ideal set of
criteria from which to examine the accuracy of negotiators' In market simulations, buyers and sellers are instructed to
perceptions (Thompson & Hastie, 1990). Finally, negotiators' complete as many profitable transactions as they can within a
perceptions are important to examine because they influence short amount of time (usually 25 min or less). The only restric-
behavior in negotiation (Thompson & Hastie, in press). tion is that parties may not interact with the same person more
Negotiation performance (in terms of economic criteria) is than once. In market studies, negotiators are essentially clones
NEGOTIATION BEHAVIOR AND OUTCOMES 529
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