Social motives in negotiation

Running Head: Social motives in negotiation

Social motives in negotiation: The relationship between dyad composition, strategy sequences and outcomes.

Mara Olekalns University of Melbourne

Philip Smith University of Melbourne

Address for correspondence: Mara Olekalns Melbourne Business School The University of Melbourne 200 Leicester St Carlton Victoria 3053 AUSTRALIA email: m.olekalns@mbs.unimelb.edu.au

Social motives in negotiation

Abstract Using a simulated employment negotiation, this experiment examined the relationship between dyad composition, negotiation strategies and levels of joint gain. Three dyad types were created on the basis of social value orientation,: proself, prosocial and mixed. A loglinear analysis showed that dyads were differentiated on the basis of the strategies associated with high joint gain. Prosocial dyads used process management and positional information more frequently than either proself or mixed dyads; and proself and prosocial dyads used multi-issue offers less frequently than mixed dyads. They were also differentiated on the basis of strategy sequences.

In prosocial dyads, reciprocal proposal modifications were associated with high joint gain. In proself dyads, the sequences associated with high joint gain functioned to divide resources. In mixed dyads whether negotiators responded to a set of three initiating strategies with either process management or distributive information was associated, respectively, with low and high joint gain.

Social motives in negotiation

Social motives in negotiation: The relationship between dyad composition, strategy sequences and outcomes. Social motives differentiate individuals on the basis of their outcome goals. Although there are several possible goals, in negotiation the most frequent distinction is between individuals who emphasize maximizing individual gain and those who emphasize maximizing joint gain. Such outcome goal differences occur in one of two ways: They may be situationally induced through explicit experimental instructions or they may occur naturally as the result of individual differences. Although the term social motives is used to describe both situational and dispositional differences in negotiators outcome goals, most research investigates the relationship between situationally-induced social motives, negotiators strategies and their outcomes (De Dreu, Weingart & Kwon, 2000). Relatively little is known about the impact of dispositional differences in social motives on this relationship. address this shortcoming by examining the relationship between social value orientations, negotiators strategy choices and their outcomes. In so doing, we further address two related gaps in the existing negotiation literature. First, we link differences in social motives to both strategy choices and outcomes. And, second, we examine this relationship in the context of dyad composition. Social Value Orientations in Negotiation. Social value orientations differentiate individuals on the basis of their outcome preferences: proselfs aim to maximize individual gain whereas prosocials aim to maximize joint gain (McClintock, 1988). In this research, we focus on explicating We

the relationship between social value orientations, negotiators strategy choices and their level of joint gain. The first question that we address is whether the processes

Social motives in negotiation

that lead to high joint gain are dependent on negotiators social value orientations. To date, research has linked social value orientations either to outcomes (De Dreu & Van Lange, 1995; Olekalns, Kibby & Smith, 1996) or to strategy choices (Olekalns & Smith, 1999), but has not examined the relationship between social value orientations, strategy choices and outcomes. However, Olekalns and Smith (1999) speculate that the paths to high joint gain differ as a function of social value orientation. Indirect evidence for this possibility comes from situational social motive research, which demonstrates that the processes by which prosocials and proselfs maximize joint gain differ (OConnor, 1997; Olekalns & Smith, 1998; Weingart, Bennett & Brett, 1993). Because negotiation is highly interactive, it is necessary to consider not just individual but also dyadic characteristics. The second question that we address in

this research is whether dyad composition influences the relationship between strategy choices and outcomes. Research in other domains establishes that the cognitions, behaviors and communication patterns of individuals in same-attribute dyads differ from those of individuals in mixed-attribute dyads (e.g., Carli, 1989; De Dreu, Carnevale, Emans & van de Vliert, 1994; Olekalns & Smith, 2000a). Extending these findings to negotiation implies that how dyads combine or sequence strategies will be a function of dyad composition. It further implies that how such strategies combine at the level of the dyad will be critical to shaping negotiation outcomes (Putnam, 1990). To test this possibility we compare the strategy sequences associated with different levels of joint gain in same social value orientation and mixed social value orientation dyads. Strategy Sequences in Negotiation. A strategy sequence, that is how a negotiator responds to the other party, serves two broad functions, informational and relational. Sequences provide

Social motives in negotiation

information in one of two ways: by giving negotiators insight into the other partys goals and intentions or by giving them insight into the payoff structure and changing their perceptions of the task. Sequences serve this first, diagnostic function when they give negotiators information about the other partys goals: The response that a strategy elicits from the other party cues negotiators to that partys underlying intentions (Kelley, 1997; Putnam, 1990). For example, responding to information about underlying priorities with a demand provides quite different cues to responding with information in kind. This leads us to expect that, within a particular dyad type, different responses to the same initiating strategy will be linked to different levels of joint gain. Sequences also serve a transformational function. Negotiators can use sequences to reframe the negotiation and change both parties perceptions of what is possible. (Brett, Shapiro & Lytle, 1998; Putnam, 1990). Frequently, this is accomplished by the introduction of an otherwise under-utilized strategy (Olekalns & Smith, 2000b). Unlike diagnostic sequences, in which the same initiating strategy elicits different responses, the strategies included in transformational sequences will be unique to a particular level of joint gain. Sequences also serve a relational function. Communication theory draws a distinction between reciprocal and non-reciprocal patterns of communication. Reciprocal sequences, in which negotiators pair similar strategies, highlight similarities between negotiators and signal relational closeness. They establish

mutuality and confirm a shared perspective and create a balanced exchange relationship (Giles, Giles & Coupland, 1991; Putnam, 1990) . Non-reciprocal

sequences, in which negotiators pair dissimilar strategies, highlight differences and signal relational distance. Such sequences provide a mechanism for asserting power (Giles et al., 1991). Although they may result in stable relationships, these

Social motives in negotiation

relationships are imbalanced and one party is likely to have greater power. We expect that, because the informational and relational needs of prosocial and proself negotiators differ, the kinds of sequences associated with high joint gain will vary as a function of dyad composition. Social Value Orientations, Strategy Choices and Outcomes. Prosocial and proself individuals differ in both their cognitions and their behaviors. The relationship between social value orientations and cognition was first demonstrated by the might-morality effect, which showed that prosocials and proselfs use different dimensions in judging the behavior of others. Whereas prosocials stress morality and evaluate cooperation as good, proselfs stress might and evaluate cooperation as weak (Van Lange & Liebrand, 1989). More recently,

Van Lange and Semins-Gossens (1998) reported that prosocials are less susceptible to initial impressions than proselfs: Whereas proselfs are more likely to reciprocate the behavior of an honest other than of an unintelligent other, prosocials strategy choices are not influenced by initial descriptions of the other party. These cognitive differences extend beyond Prisoners Dilemma Games. For example, in

categorization tasks, prosocials show greater cognitive flexibility that proselfs (Carnevale & Probst, 1997). And, in the context of negotiation, research has shown that prosocials and proselfs endorse cooperative and competitive heuristics in a valueconsistent way (De Dreu & Boles, 1998). Finally, prosocial negotiators are more

concerned with the well-being of others and obtaining equal outcomes than proself negotiatiors (De Dreu & Van Lange, 1995). Parallelling the might-morality finding, the pattern of behavioral assimilation observed by Kelley and Stahelski (1970) provided an early demonstration that proselfs and prosocials differ in their behaviors. These researchers demonstrated

Social motives in negotiation

that whereas prosocials adapt their strategy to the other partys behavior, proselfs do not. More recent Prisoners Dilemma Game research has demonstrated that, over repeated games, prosocials display a higher level of reciprocity than proselfs. Furthermore, the two groups differ in their response to a tit-for-tat strategy: Unlike prosocials, proselfs move to games with a lower level of interdependence when confronted with a partner playing tit-for-tat (Van Lange & Visser, 1999). These two groups also differ in their patterns of information search, in a way that suggests prosocials are more concerned with mutual cooperation or non-cooperation whereas proselfs are more concerned with exploitation (Camac, 1992). In negotiations, prosocials make lower initial offers and give larger concessions than proselfs (De Dreu & Van Lange, 1995; Olekalns, Kibby & Smith, 1996). They also place more emphasis on process management, whereas proselfs place greater emphasis on task management (Olekalns & Smith, 1999). Prosocial dyads. Because prosocials are defined by their preference for maximizing joint gain, a key question is not how they obtain high joint gain but why they fail to do so. The answer lies in their concern with establishing an equitable relationship. Prosocial negotiators focus on mutuality and equality (Camac, 1992; De Dreu & Van Lange, 1995) leads us to conclude that prosocial dyads will emphasize reciprocity. Their lower susceptibility to initial impressions (Van Lange & SeminsGossens, 1998) suggests that they will be more attuned to the information provided by the other partys behavior and implies that the presence or absence of reciprocity will serve a diagnostic function. For these negotiators, reciprocity will be critical to high

joint gain and the breakdown of reciprocity will be associated with low joint gain. However, their greater concern for the well being of the other party (De Dreu & Van Lange, 1995) suggests that reciprocity will break down in quite specific ways, that is

Social motives in negotiation

in ways that preserve a positive negotiating relationship. This is most likely to be reflected in a greater willingness to modify proposals and an unwillingness to engage in contention. Given the emphasis that these negotiators place on process management (Olekalns & Smith, 1999), we expect that sequences will be built around this strategy. We hypothesize that, in prosocial dyads H1a: Reciprocity will be associated with high joint gain and breakdowns in reciprocity will be associated with low joint gain. H1b: Reciprocal process management will be associated with high joint gain; nonreciprocal sequences in which process management elicits proposal modifications and concessions will be associated with low joint gain. Proself dyads. Proself dyads are defined by their preference for maximizing individual gain. Consequently, the key question for these dyads is the more usual one, that is, how such dyads shift perspective and move from low to high joint gain. Proselfs concern with exploitation (Camac, 1992) suggests that these dyads will be sensitive to the possibility for exploitation. Consequently, obtaining information about the strength of the other party is a critical task for these dyads. This leads us to conclude that the presence of non-reciprocal sequences in which dissimilar strategies are paired will be associated with low joint gain. The absence of exploitability will act as a motivator to increase the size of the resource pool only if it triggers a shift in their perception of what is possible. We expect this reframing to be associated with the use of transformational sequences. Past research shows that proself dyads are

characterized by the use of three strategies - priority information, proposal modifications (concessions) and process management and by the under-utilization of positional information (Olekalns & Smith, 1999). On this basis, we expect that

non-reciprocal sequences in which priority information elicits proposal modifications

Social motives in negotiation

will confer a power advantage to one negotiator, and will be associated with low joint gain. We also expect that the introduction of positional information, an otherwise underutilized strategy, will act to transform the negotiating dynamic and result in high joint gain. We speculate that this is because positional information can serve the dual function of adding information and motivating a search for ways to increase the resource pool. We hypothesize that, in proself dyads H2a: Transformational sequences will be associated with high joint gain and that other non-reciprocal sequences will be associated with low joint gain. H2b: Sequences in which priority information elicits proposal modifications will be associated with low joint gain; sequences that incorporate positional information will be associated with high joint gain. Mixed dyads. In these dyads, negotiators start with discrepant goals. Although there is some evidence that one party will assimilate to the behavior of the other (Chatman & Barsade, 1995; Kelley & Stahelski, 1970; Wagner, 1995), negotiators in mixed dyads appear to develop their own set of strategies. Their negotiations are more classically distributive and their dominant strategy is one of positional arguing (Olekalns & Smith, 1999). These negotiators face somewhat

different challenges to those faced by either prosocial or proself dyads: Discrepant outcome goals and less readily predictable behavior. Several authors have argued

that when individuals hold different goals, a key task is to establish a shared frame of reference (Brodt & Diez, 1999; Krauss & Fussell, 1991). Without such an understanding, interactions including negotiations will not be successful. The critical task for these negotiators is to establish a common frame of reference for the negotiation and to come to an understanding of the process by which they will reach settlement. This leads us to the conclusion that negotiators in these dyads will be

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concerned with diagnosing the goals and intentions of the other party, and that how individuals respond to a core set of strategies will determine whether mixed dyads obtain high or low joint gain. On the basis of previous research, we expect that this core set of strategies will include positional information (Olekalns & Smith, 1999). Because there is relatively little information about the behavior of mixed dyads, we make the more general hypotheses that H3a: The level of joint gain in mixed dyads will be associated with diagnostic sequences H3b: Diagnostic sequences will be built around the lead strategy of positional information. Methods Participants. One hundred and sixty undergraduate psychology students participated in a negotiation task. Participants were run in pairs in separate sessions. Prior to the

task, participants completed a set of nine decomposed Prisoners Dilemma Games (Messick & McClintock, 1968). They were classified as prosocial if they made at

least six choices that maximized joint outcomes; and they were classified as proself if they made at least six choices that either maximized individual gain or the difference between own and others outcomes. Individuals who did not meet these criteria

were excluded from subsequent analyses. Twenty-three prosocial dyads, nineteen proself dyads and nineteen mixed (one prosocial and one proself individual) dyads were included in subsequent analyses. Procedure. Individuals participated in one of two simulated, 5-issue negotiations. For half the subjects, the negotiation was represented as an employment contract

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negotiation; for the other half of the subjects, the negotiation was represented as a trade negotiation between two countries. Subjects in both scenarios received an identical payoff structure in which 4 issues were integrative and 1 was distributive. The payoff schedules for this task are shown in Table 1. As can be seen from this table, Issues 1, 2, 4 and 5 are integrative: They hold different values for the two negotiators and so create the potential for making trade-offs and increasing the size of the resource pool. Issue 3 is distributive and negotiators interests are mutually opposed. Written instructions assigned participants to their roles, described the task, and gave them their payoff schedule and a contract for recording their final outcome. Each negotiation was conducted face-to-face and was videotaped for subsequent analysis. Negotiators were told they would have approximately 20 minutes in which to reach agreement. Coding of negotiations. We used a modified version of the coding scheme developed by Weingart et al (1990), which classified tactics into one of 27 categories. These 27 tactics are shown in Table 2. Each speaking turn by a negotiator was coded for its dominant theme. Two raters coded all transcripts ( =0.74) and disrepancies were resolved through discussion. Bakeman and Gottman (1986) classify in the range 0.70 - 0.74 as very good, and those at or above 0.75 as excellent. Classification of outcomes. For the purpose of subsequent analyses, we identified three levels of joint gain. Outcomes were classified on the basis of joint outcome and integrativeness quotient (Tripp & Sondak, 1992), which provides an indication of the number of agreements that are superior to the settlement point. When negotiators located all trade-offs joint outcome was 20,000 points; when they made no trade-offs, joint outcome was 12,800 points. Low joint gain was defined as

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any outcome in which negotiators joint profit did not exceed the sum of the compromise solution (12,800 points). Outcomes were classified as moderate joint gain if joint profit fell between 12,800 and 16,400 points (integrativeness quotient < 0.95); they were classified as high joint gain if joint outcome exceeded 16,400 points (integrativeness quotient > 0.95). Outcomes were relatively evenly distributed

across dyad composition, 2(4) =4.06, ns. Results Preliminary Data Analysis. To determine whether the 27 individual tactics identified by the coding scheme could be reduced to a smaller number of meaningful strategic clusters we carried out a correspondence analysis (Greenacre, 1993) on the dyad x strategy frequency table using procedure ANACOR in SPSS. The purpose of this analysis was to determine the number of clusters needed to represent the similarity structure among the 27 strategies. The analysis suggested strategies could be grouped into six general strategy clusters (Table 2). For the purposes of subsequent data analysis all tactics were recoded as representing one of these 6 strategies. Figure 1 shows the two-dimensional correspondence analysis solution of tactics that we obtained from ANACOR. Cluster 1 has cooperative focus. It includes the tactics of giving and seeking priority information, as well as positive comments about differences or the process. We describe it as principally a strategy of priority information exchange. Cluster 2 also has a cooperative focus, but deals more with process management than information. It includes the tactics of making open-ended comments, comments about process or reciprocity, support of the other person and moving to a new issue. Cluster 3 includes several strategies typically associated with a contending style. These are the tactics of providing information for introducing

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additional information about self, other and the situation, arguments in support of own position, rejection of an opponents arguments, making demands, making threats, referring to alternatives, and negative reactions to the other party. Two clusters (4

and 5) capture different aspects of making and modifying offers. The tactics that are included in Cluster 4 all reflect efforts to modify proposals and, with the exception of the tactic reject offer, move the negotiation to closure. Cluster 5 has a slightly

different focus, in that it deals with multi-issue offers. Finally, Cluster 6 incorporates many of the traditional distributive bargaining strategies and we describe the strategy as one of positional information. Analysis of Single Strategies and Sequences. To characterize the pattern of strategy use we used S+ to fit a series of loglinear models to the five-way contingency table Dyad Composition (dc =3) x Outcome (o =3) by Strategy use (s1=6, s2=6, s3=6). Note that s1, s2,and s3 refer to the consecutive strategies at three time steps. As can be seen in Table 3, these models were designed to account not only for simple frequency effects but also their sequential dependencies. Model 1 was a null model in which dyad composition, outcome and strategy type were mutually independent. This model controls for length of negotiations in each dyad type and outcome category and provides a baseline from which we test other models. We then tested a series of progressively more complex models, shown in Table 3. Models 2-4 test for relationships between outcome (2), dyad composition (3) and their interaction (4) and the frequency of single strategy use. Models 5-7

test for relationship between outcome (5), dyad composition (6) and their interaction (7) and the frequency of sequences of strategies. Table 3 shows both the overall model fit, G2, as well as progressive changes to model fit, G2. Because of the

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sparseness of the table, G2 is the more informative statistic. Although we obtain successive improvements of fit as we progress through these models, it is only when we allow for an interaction between dyad composition, outcomes and sequences of strategies that we obtain a good fit to the data, G2(1,200) = 1,279.02, p > 0.05. To examine where the improvements in fit occurred, we calculated the standardized residuals by comparing each model that was associated with a significant improvement in fit to the immediately preceding model. In this way, we were able to determine those areas of the contingency table that resulted in improved model fit. The standardized residual for any cell j is equal to (nj-mj)/mj1/2, where nj and mj are, respectively, the observed frequency and fitted values for the cell (Agresti, 1990). Cells with standardized residuals greater than +/- 1(the expected value of the Pearson chi-square statistic with one degree of freedom when the null hypothesis is true) are important in diagnosing the cause of a models failure to fit. Our results show that although some sequences have large standardized residuals, in absolute terms they occur relatively infrequently (on average, less than once per dyad). In subsequent discussion, we concentrate on those sequences that meet two criteria: (a) the standardized residuals are at least +/- 1.4 and (b) the expected frequency for the sequence is at least 5. Frequency of Single Strategy Use (Models 2-4) Our analysis showed that outcome (Model 2), dyad composition (Model 3) and their interaction (Model 4) were associated with different patterns of strategy use. These effects are summarized in Table 4. Model 3 establishes the dominant strategies for each dyad type and Model 4, which shows an interaction between

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outcome, dyad composition and strategy use, supports our argument that how negotiators maximize joint gain is dependent on dyad composition. Outcome effects (Model 2). As can be seen in Table 4 low joint gain is associated with the frequent use of contention and proposal modifications, and the infrequent use of integrative information. The reverse pattern is associated with high joint gain: The infrequent use of contention and proposal modifications and the frequent use of integrative information. Negotiators who obtain moderate joint gain

are more similar in their behavior to those who obtain low joint gain, in that they too use contention and proposal modifications more frequently than expected. They differ in that they are the only group to also use multi-issue offers. Dyad composition effects (Model 3). Consistent with previous research, we

found that prosocial dyads used process management more frequently than expected. However, these dyads also used positional information more frequently than expected, and two strategies (multi-issue offers and integrative information) less frequently than expected. Neither proself nor mixed dyads showed the patterns of strategy use that were evident in previous research. Proself dyads used contending more frequently

than expected and process management less frequently than expected; and mixed dyads used priority information more frequently, and positional information less frequently, than expected. Combined effects of outcome and dyad composition (Model 4). At low joint gain, all dyad types used contention and proposal modifications more frequently than expected. Proself dyads differed in that they also used multi-issue offers more frequently than expected. Similarly, all dyads used priority information more frequently than expected when they obtained high joint gain. Prosocial dyads differed from proself and mixed dyads in that they also used positional information

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and process management more frequently than expected. Conversely, although all dyads used contention with low frequency, proself and prosocial dyads differed from mixed dyads in their relatively lower use of multi-issue offers. Frequency of Strategy Sequences (Models 5-7). Our analysis also showed an association between outcome, dyad composition and the differential use of strategy sequences (Model 7). These effects are summarized in Table 5. This interaction demonstrates that the sequences associated

with different levels of joint gain are dependent on dyad composition. Prosocial Dyads. We found support for H1a, that reciprocity would be

associated with high joint gain and that breakdowns in reciprocity would be associated with low joint gain. However, the composition of these sequences did not support H1b. Instead, we found that reciprocal proposal modification is associated with high joint gain and proposal modifications that elicit contention are associated with low joint gain. We note that at low joint gain, the proposal modification -

contention sequence absorbs otherwise frequently used strategies and serves to reinforce the dominant outcome dynamic. Proself Dyads. We also found partial support for H2a, in that proself dyads were characterized by the use of transformational sequences. We also found support for H2b, in that two of these sequences incorporated positional information. One of

these occurred more frequently than expected (positional information-multi issue offers ) while the other occurred less frequently than expected (positional information priority information). However, an additional two sequences also fit our definition of transformational sequences but were built around other infrequently occurring strategies. Again, one (contend proposal modification) occurred more frequently

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than expected, while the other (contend-priority information) occurred less frequently than expected. Finally, at low joint gain, these dyads are characterized by the use of one sequence, proposal modification multi-issue offers, that incorporates two already frequently used strategies. This pattern, when coupled with high levels of contending reflects a classic haggling, offer-centered approach to negotiation. We speculate that it adds structure to, and therefore reinforces, an already contentious dynamic. Mixed Dyads. Finally, we found support for H3a, that mixed dyads would be characterized by the use of diagnostic sequences, defined as sequences in which the same lead strategy was associated with a different response depending on the level of joint gain. How negotiators in these dyads responded to three strategies integrative information, proposal modifications and contention differentiated those dyads that obtained high joint gain from those that obtained low joint gain. Supporting H3b, we found that when negotiators responded with process management these dyads obtain low joint gain; when they responded with distributive information, they obtain high joint gain. Discussion The central question in this research was whether the strategies that lead to high joint gain are dependent on dyad composition. Our analysis showed, firstly, that dyad composition influences negotiators dominant strategies, independent of outcome: prosocial, proself and mixed dyads differed in the strategies that characterized their negotiations. Supporting our hypotheses, we found that the frequency with which single strategies and strategy sequences were used varied as a function of both dyad composition and level of joint gain. We go on to argue that, in terms of single strategies, this reflects differential needs for information and process

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management; and that in terms of strategy sequences, this reflects the different relational concerns of prosocial, proself and mixed dyads. Links Between Single Strategies, Dyad Composition and Outcomes. A strong outcome effect pervaded the negotiations, so that all dyads independent of their composition benefited from the introduction of priority information and the reduction of contention and proposal modifications. The effects of dyad composition were superimposed on this pattern. At low joint gain, we observed more similarities than differences across the three dyad types in the strategies that are used most frequently. Instead, they were differentiated by the strategies that were used less frequently than expected. The differences between the three dyad types were much more evident at high joint gain: Proself dyads reduced their use of multi-issue offers; prosocial dyads increased their use of distributive information and process management; and, mixed dyads also increased from low to expected frequency their use of process management. These findings lead us to

draw three conclusions. First, for proself dyads the process remains task focused and replacing one type of task (offer management) with another (information management) effects the shift from low to high joint gain. Second, when there is at

least one prosocial negotiator in the dyad, process management increases in importance and must at least reach normative levels for dyads to obtain high joint gain. And, third, in prosocial dyads, maximizing joint gain requires both process and information management. Links between dyad composition, strategy sequences and outcomes. Unlike single strategy use, there was no common thread in the pattern of strategy sequences that emerged. Instead, the association between levels of joint gain and strategy sequences clearly differentiated the three types of dyads. Not only did

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prosocial, proself and mixed dyads differ in how they responded to the same lead strategy, but each dyad type was also characterized by sequences specific to that dyad. More generally, we also observed that reciprocity occurred only in prosocial dyads; that transformational sequences occurred most frequently in proself dyads; and that mixed dyads were characterized by diagnostic sequences. Recalling that we did not get good fit to the data until we allowed for an associated between sequences, dyad composition and level of joint gain we conclude that (a) single strategy use creates the boundary conditions associated with different levels of joint gain; (b) within these boundaries, dyad composition affects the specific issues that need to be resolved for dyads to obtain high joint gain; and (c), these issues are managed through the sequencing of strategies. For both prosocial and proself dyads, managing the negotiating relationship is a key issue. In prosocial dyads, the link between reciprocal proposal modification and high joint gain indicates that these dyads look for mutuality, which is established through reciprocity, and balanced exchange, which occurs because of this reciprocal trading of modifications. This pattern is consistent with Pruitts (1981) argument that reciprocal concessions are a key component of a problem-solving strategy. However, in proself dyads transformational sequences also reflect a compensatory communication pattern, which is thought to define a stable but power-based relationship (Giles et al., 1995). Both frequently used sequences paired a more competitive strategy (positional information, contention) with a more cooperative or conciliatory one (multi-issue offers, proposal modifications), effectively giving greater power to one negotiator. This leads us to conclude that while priority

information is sufficient for expanding the resource pool and creating value, the

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process of claiming value is managed through sequences that reflect the different relational concerns of prosocial and proself negotiators. The need to predict the other partys behavior is most evident in mixed dyads, which are characterized by diagnostic sequences. Our analysis suggests that mixed dyads that fail to reach some understanding of the negotiation process fail to maximize joint gain. Recalling that process management, as a single strategy, is under-utilized at low joint gain and increases to expected frequency at high joint gain suggests that mixed dyads do not benefit from the introduction of process management in sequences when its overall use is not normative. Its introduction in sequences further underscores the inability of these dyads to establish some shared understanding of the task. Not only do they use process management in a way that disrupts the introduction of priority information and proposal modifications, but they fail to manage those aspects of process (contention) that can result in escalatory cycles of conflict (Brett, Shapiro & Lytle, 1999). Instead, these dyads benefit from the introduction of distributive information and we speculate that this serves to prolong their information search. This implies that mixed dyads, rather than

prosocial dyads, are at risk of ending negotiations prematurely. Negotiating Dynamics. At a more general level, we note a pattern of congruence that differs for same orientation and mixed orientation dyads. First, we found that in both proself and prosocial dyads the use of at least one strategy was effectively amplified at low joint gain and mitigated at high joint gain. For example, the infrequent use of priority It was also associated with low

information was characteristic of prosocial dyads.

joint gain, thus amplifying its absence in these dyads. A similar pattern was evident for the use of contention in proself dyads, although in this case its presence was

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amplified. We similarly note that, for both proself and prosocial dyads, at least one of the sequences associated with low joint gain absorbs already frequently used strategies. This adds structure to an already contentious style of communication, and we believe that by creating a tighter communication pattern, it prevents these dyads from maximizing joint gain. Overall, this suggests that for pure dyads a match between the processes that influence level of joint gain and individual strategy preferences is detrimental to outcomes, especially when these strategies are further combined in sequences. The converse holds for mixed dyads, who fail to optimize

their outcomes when there is mismatch between the processes that influence level of joint gain and individual strategy preferences, and when sequences incorporate otherwise infrequently used strategies. Dispositional and situational social motives. At the start of this article, we distinguished between situational and dispositional social motives. Our results show that the dyads in this experiment did not exactly replicate the behavior of negotiators representing either situational (De Dreu et al., 2000) or dispositional (Olekalns & Smith, 1999) social motives. We found the greatest consistency in prosocial dyads. First, consistent with past situational and dispositional research, we found that prosocial dyads in this experiment were characterized by the use of process management. Turning to the more complex relationship between sequences, dyad composition and outcomes, we found that in both cases high joint gain was linked to the presence of reciprocity and low joint gain was linked to a breakdown in reciprocity. The most striking difference across situational and dispositional social motives was in how reciprocity broke down: proposal modifications elicited conciliation when social motives were

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situationally induced (Olekalns & Smith, 1998) but elicited contention in the present experiment. In that proself dyads used contention more frequently than expected, their behavior overlapped more strongly with that observed for situational social motives (De Dreu et al., 2000) than for dispositional social motives (Olekalns & Smith, 1999). At the level of sequences, we again found some consistency across situational and dispositional social motives. In both cases the use of proposal modification multi issue offer sequences is associated with low joint gain and an absence of positional information priority information sequences is associated with high joint gain. A key difference between the two groups is that in the present experiment the sequences associated with high joint gain reflected the one up-one down moves that are characteristic of power based relationships. In contrast, when social motives are situationally induced high joint gain is associated with the absence of reciprocity (Olekalns & Smith, 1998). These patterns lend themselves to two more general conclusions. First, the pattern of sequences suggests that there is greater consistency across situational and dispositional social motives in how dyads achieve their dominant goal, and greater variation in how they achieve their subordinate goal. Second, these findings are consistent with research showing that proself individuals are more responsive to contextual demands than prosocial individuals (Carnevale & Probst, 1998; Wagner, 1993). More generally, they imply that proself dyads may be more opportunistic in their strategy choices than prosocial dyads. Conclusion. This research demonstrates that dyad composition is an important determinant of the processes that create value. Our analysis shows that while there is

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considerable overlap in the single strategies associated with high and low joint gain, dyads are differentiated by how strategies are sequenced. We conclude that while the frequency with which single strategies are used sets boundary conditions for negotiators ability to create value, how strategies are sequenced reflects tasks that are unique to each dyad type. Sequences in same-orientation dyads reflect the different relational concerns of proself and prosocial negotiations, whereas in mixedorientation dyads they identify the development of shared understanding and information search as critical tasks. Comparisons between this and earlier social motive research suggest that negotiation processes are stable across dispositional and situational social motives when they are linked to negotiators dominant goals, but that this similarity breaks down in relation to subordinate goals.

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Socially Shared Cognition (pp 172-200). Washington, DC: American Psychological Association. Liebrand, W.B., Jansen, R.W., Rijken, V.M., & Suhre, C. J. (1986) Might over morality: Social values and the perception of other players in experimental games, Journal of Experimental Social Psychology, 22, 203-215 Messick, D.M., & McClintock, C.G. (1968). Motivational basis of choice in experimental games, Journal of Experimental Social Psychology, 4, 1 - 25. O'Connor, K. (1997). Motives and cognitions in negotiation: A theoretical integration and an empirical test, International Journal of Conflict Management, 8, 114-131. Olekalns, M., Smith, P.L. & Kibby, R. (1996) Social value orientations, negotiator strategies and outcomes, European Journal of Social Psychology, 299-313. Olekalns, M., & Smith, P.L. (1998). Mere Frequency Effects? Motivational Orientation, Strategic Choice and Optimal Outcomes in Negotiations. Paper presented at the International Association of Conflict Management Conference, Washington, D.C Olekalns, M., & Smith, P.L. (1999). Social value orientations and strategy choices in competitive negotiations, Personality & Social Psychology Bulletin, 25, 657-668. Olekalns, M., & Smith, P.L. (2000a). Stability and Change in Negotiators' Mental Maps. Paper presented at Academy of Management Meeting, Toronto, Ontario. Olekalns, M., & Smith, P.L. (2000b). Understanding optimal outcomes: The role of strategic sequences in competitive negotiations, Human Communication Research, 24, 528-556.

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Pruitt, D.G. (1983). Achieving integrative agreements. In M.H. Bazerman & R.J. Lewicki (Eds.). Negotiating in Organizations (pp. 35-50). Beverly Hills: Sage. Putnam, L.L. (1990). Reframing integrative and distributive bargaining: A process perspective, Research on negotiation in organizations, 2, 3 - 30. Tripp, T.M., & Sondak, H. (1992). An evaluation of dependent variables in experimental negotiation studies: Impasse rates and pareto efficiency, Organizational Behavior and Human Decision Processes, 51, 273-295. Van Lange, P.A.M. & Visser, K. (1999). Locomotion in social dilemmas: How people adapt to cooperative, tit-for-tat and noncooperative partners, Journal of Personality and Social Psychology, 77, 762-773. Van Lange, P.A.M., & Semins-Gossens, A. (1998). The boundaries of reciprocal cooperation, European Journal of Social Psychology, 28, 847-854. Van Lange, P.A., & Liebrand, W. B. (1989). On perceiving morality and potency: Social values and the effects of person perception in a give-some dilemma, European Journal of Personality, 3, 209-225 Wagner, J.A. (1995). Studies of individualism-collectivism: Effects on cooperation in groups. Academy of Management Journal, 38, 152-172. Weingart, L.R., Bennett, R.J., & Brett, J.M. (1993). The impact of consideration of issues and motivational orientation in group negotiation process and outcome, Journal of Applied Psychology, 78, 504 - 517. Weingart, L.R., Thompson, L.L., Bazerman, M.H., & Carroll, J.S. (1990). Tactical behavior and negotiation outcomes. International Journal of Conflict Management, 1, 7-31.

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Authors Notes The research reported in this paper was undertaken while the first author was in the Department of Management at the University of Melbourne. It was supported by grants from the Australian Research Council and the Faculty of Economics & Commerce. An earlier version of this paper was presented at the International Association of Conflict Management Conference, Cergy (Paris), France, 2001. The authors thank Madeleine Fernbach, Imogene ONeill and Louise Fletcher for their assistance in transcribing and coding the data. Correspondence should be addressed to Mara Olekalns, Melbourne Business School, University of Melbourne, 200 Leicester St, Carlton, Victoria, 3053, Australia or via email to m.olekalns@mbs.unimelb.edu.au

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Table 1. Schematic representation of payoff matrices for negotiators.

Negotiator A _____________________________________________________________________
Issue 1 Value Issue 2 Value Issue 3 Value Issue 4 Value Issue 5 Value __________________________________________________________________________ Level 1 6,000 Level 2 4,500 Level 3 3,000 Level 4 1,500 Level 5 000 Level 1 1,600 Level 2 1,200 Level 3 Level 4 Level 5 800 400 000 Level 1 6,000 Level 2 4,500 Level 3 3,000 Level 4 1,500 Level 5 000 Level 1 4,000 Level 2 3,000 Level 3 2,000 Level 4 1,000 Level 5 000 Level 1 1,200 Level 2 Level 3 Level 4 Level 5 900 600 300 000

_____________________________________________________________________

Negotiator B

_____________________________________________________________________
Issue 1 Value Issue 2 Value Issue 3 Value Issue 4 Value Issue 5 Value __________________________________________________________________________ Level 1 Level 2 Level 3 000 400 800 Level 1 000 Level 1 000 Level 1 Level 2 Level 3 Level 4 000 300 600 900 Level 1 000

Level 2 1,500 Level 3 3,000 Level 4 4,500 Level 5 6,000

Level 2 1,500 Level 3 3,000 Level 4 4,500 Level 5 6,000

Level 2 1,000 Level 3 2,000 Level 4 3,000 Level 5 4,000

Level 4 1,200 Level 5 1,600

Level 5 1,200

_____________________________________________________________________

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Table 2 Summary of strategies used in coding negotiations. Tactics used in coding negotiations are shown on the right. Strategies derived from correspondence analysis are shown on the left.

Strategy Contention

Priority Information

Tactics comprising strategy States minimum terms Refers to BATNA Makes threat Negative reaction to opponent Introduce new information about self, other, situation Provide information about self, other, situation Reject opponents arguments Substantiation Seeks priority information Gives priority information Positive comments about differences or process Seeks positional information Gives positional information Refers to single issue Refers to multiple issues Notes differences in a negative way Accepts concession Move to new issue Make open-ended comments Show other support Comment on process or reciprocity Multi-issue offer, with trade-off Multi-issue offer, without trade-off Offer concession Propose modifications to opponents offer Indicate flexibility Make single issue offer Reject opponents offer

Positional Information

Process Management

Multi-Issue Offers (MIOs) Proposal Modification

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Table 3. Likelihood ratio model fits (G2) and conditional likelihood ratio fits (G2) for length four sequences.

Model Independence Model 1. [dc, o][s1] [s2] [s3] Single Strategy Effects 2. [dc][o][dc, o][s1] [s2] [s3] [s1,s2] [s1,s3] [s2,s3] [o,s1] [o,s2] [o,s3] 3. [dc,s1] [dc,s2] [dc,s3] 4. [o,dc,s1] [o,dc,s2] [o,dc,s3] Strategy Sequence Effects 5. [s1,s2,,s3] [o,s1,s2] [o, s2,s3] 6. [dc,s1,s2] [dc, s2,s3] 7. [dc, o,s1,s2] [dc, o, s2,s3] Note:

G2 3429.0 2212.5

df 1720 1690

G2

df

<.001 405.5

10

<.001

2070.5 1794.6 1673.3 1557.2 1279.0

1660 1600 1500 1400 1200

<.001 47.33 <.001 91.96 <.01 60.64

10 20 50 50 100

<.001 <.001 .144 .202 .006

<.005 58.06 >.05 139.1

1. Each model builds on the preceding model by adding a new set of terms. In this table we show only the term that has been added. 2. Changes to G2 and df have been adjusted for duplicate terms in model

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Table 4. Single strategies that depart from expected frequency. Observed frequencies and standardized residuals (italics) are shown in brackets. High f Low f High f Low f High f Low f

Model 2: Outcome Effects Low joint gain contention (441, 12.5) prop mod (276, 7.4) pri info (93, -13.4) proc mgmt (147, -2.6) Moderate joint gain prop mods (231, 3.27) MIO (94, 7.4) pri info (261, -5.2) High joint gain pri info (1271, 11.3) contention (453, -8.3) prop mods (339, -6.5)

Model 3: Dyad Effects Proself Dyads contention (379, -1.8) proc mgmt (212, -2.9) prop mods (228, -1.5) Prosocial Dyads proc mgmt (444, 2.3) pos info (636 1.9) pri info (689, -3.1) MIO (106, -1.7) Mixed Dyads pri info (439, 3.3) contention (310, -1.4) pos info (296, -2.7)

Table continues

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High f

Low f

High f

Low f

High f

Low f

Model 4: Outcome X Dyad Effects Low joint gain Prosocial Dyads contention (186, 9.1) prop mod (113, 5.2) pri info (12, -10.5) MIO (16, -1.7) pri info (82, -1.6) pri info (595, 4.7) proc mgmt (326,3.7 ) pos info (437, 1.8) Proself Dyads contention (144, 9.3) MIO (28, 2.6) prop mod (64, 2.2) pri info (10, -8.6) proc mgmt (39, -1.6) MIO (38, 3.1) pri info (370, 6.7) contention (151, -2.8) proc mgmt (116, -2.2) MIO (36, -1.8) prop mod (95, -3.5) Table continues contention (225, -6.8) MIO (69, -2.2) prop mod (200, -3.4) Moderate joint gain High joint gain

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High f Mixed Dyads Low joint gain contention (111, 3.5) prop mod (99, 5.5)

Low f

High f

Low f

High f

Low f

Moderate joint gain pri info (71, -3.7) pos info (72, -1.9) proc mgmt (42, -2.3) contention (122, 2.7) MIO (35, 2.1) prop mod (102, 3.9) pri info (62, -6.3)

High joint gain pri info (306, -9.3) contention (77, -4.7) pos info (113, -2.9) prop mod (44, -5.2)

Note: A full table of observed frequencies and standardized residuals is available on request from the authors. proc mgmt = process management; pri info =priority information; pos info = positional information; prop mod = proposal modifications

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Table 5. Strategy sequences that depart from expected frequency. Observed frequencies and standardized residuals (italics) are shown in brackets. Positive residuals indicate a more frequent than expected use; negative residuals indicate a less freqeunt than expected use. Low joint gain Prosocial Dyads Diagnostic Transformational Proself Dyads Diagnostic Transformational prop mod contend (41, 2.3) pos inf- pos inf (20, -1.5) proc mgt-prop mod (10, 1.5) contend-prop mod (22, 1.8) pos inf-MIO (13, 1.6) contend-pri info (7, -2.1) pos inf-pri inf (35, -1.7) Other Mixed Dyads Diagnostic prop mod MIO (10, 2.1) pri info proc mgt (11, 1.7) prop modproc mgt (10, 1.9) contend-proc mgt (7, -1.7) Transformational MIO-MIO (2, -1.5) pri info pos inf (36, 1.8) prop mod pos inf (18, 1.4) contend- pos inf (7, -1.5) Moderate joint gain High joint gain prop mod-prop mod (75, 2.60)

Note: A full table of observed frequencies and standardized residuals is available on request from the authors. proc mgt = process management; pri inf =priority information; distributive inf = distributive information; prop mod = proposal modifications

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Figure Captions

Figure 1. Correspondence analysis showing grouping of tactics into strategies.

3
INF

RARG SUB NR BAT/T

0.5

1
PC GPRI SPRI PRC

NINF OS

NI, OPN GPOS AO SPOS SI, ND MI

-0.5

6 5

MIN SIO 4 CNC RO FLX MOD

MIO, TO

MIO

-1 -1 -0.5 0 0.5 1
PC-positive comments; G/SPRI: give/seek priority info; PRC-process comments; NI-new info; OPN-open ended comments; OS-other support; N/INF-(new) info; RARG- reject arg; SUB-substantiate; BAT/T- BATNA, threat; NR-neg reaction; MIN-min terms; SIO-single issue offer; CNC-concession; FLX-flexibility; MOD-modifications; RO-reject offer; MIO (TO)multi issue offer (with trade-off); S/GPOS-seek/give position info; S/MI-single/-multiple issues ND-notes diffs; AO-accept