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Psychological Bulletin
1990, Vol. 108, No. 3,515-532
Negotiation is a pervasive and important form of social interaction. Negotiation is necessary whenever conflict erupts and
there are no fixed or established rules or procedures to resolve
conflict and whenever people want to search for agreement
without resorting to aggression or open fighting (Lewicki &
Litterer, 1985). Negotiation occurs in business and academic
environments and in informal social interactions such as deciding with a friend or spouse where to dine or vacation. Clearly,
negotiation is essential for anyone who must interact with other
people to accomplish their objectives.
There is broad interest in the study of negotiation behavior.
This interest is evident in the interdisciplinary history of the
study of negotiation in the fields of psychology, economics,
industrial relations, organization behavior, sociology, and law.
The theoretical goal is to predict the processes and outcomes of
negotiation. The practical or applied goal is to help people negotiate more effectively (Bazerman, 1986; Raiffa, 1982). The fundamental and enduring questions raised by the growing body of
research on negotiation behavior include the following: What
factors lead to negotiation success or failure? Which theoretical
perspective provides the best account of negotiation behavior?
What empirical findings must a theoretical approach to negotiation explain? The purpose of this article is to address these
theoretical and empirical issues.
A variety of theoretical analyses of negotiation behavior have
been developed. An important theoretical distinction is that
between normative and descriptive approaches (Neale &
Northcraft, in press; Raiffa, 1982). Normative models are
based on axioms of individual rationality (cf. von Neumann &
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LEIGH THOMPSON
DEFINITION OF NEGOTIATION
Negotiation is the process whereby people attempt to settle
what each shall give and take or perform and receive in a transaction between them (Rubin & Brown, 1975). A negotiation
situation has five characteristics: (a) People believe that they
have conflicting interests; (b) communication is possible; (c)
intermediate solutions or compromises are possible; (d) parties
may make provisional offers and counteroffers; and (e) offers
and proposals do not determine outcomes until they are accepted by both parties (Chertkoff & Esser, 1976; Cross, 1965;
Schelling, 1960).
The basic features of negotiation include the negotiating parties, their interests, the negotiation process, and the negotiation
outcome (Thompson & Hastie, 1990). A party to a negotiation
is a person (or a group of persons with common interests) who
acts in accord with his or her preferences. The interests of negotiators are the preferences or utilities that each person has for the
resources to be divided (Walton & McKersie, 1965). The structure of the bargaining situation is determined by the degree of
conflict between parties' interests. Pure conflict exists when
parties' interests are perfectly negatively correlated; that is, any
outcome that increases one party's utility decreases the other
party's utility in a fixed-sum fashion. Pure conflict situations
are known as fixed-sum or purely distributive negotiations
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Economic Measures
Economic measures are based on axioms of individual utility
usually attributed to von Neumann and Morgenstern (1947)
and on Bayesian Decision Theory (deGroot, 1970) and represent the most well-formulated specifications of optimal negotiation performance. Economic measures are primarily axiomatic; that is, they focus on the outcomes or products of negotiation and do not specify the processes or methods necessary or
sufficient to yield such outcomes. Three measures of performance are specified by normative bargaining models (Nash,
1953).
517
tors' reservation prices overlap; a negative bargaining zone exists if negotiators' reservation prices do not overlap. When a
positive bargaining zone exists, both negotiators gain from mutual agreement; when a negative bargaining zone exists, negotiators do not profit from mutual agreement. For example, if a
buyer's reservation price, or maximum amount that he or she is
willing to pay for a used car is $700 and the seller's reservation
price, or the minimum amount that he or she is willing to
accept is $600, a positive bargaining zone exists. A negative
bargaining zone would exist if the buyer's reservation price was
$600 and the seller's reservation price was $700.
Mutual Agreement
According to most economic bargaining models, negotiators
should reach a mutual agreement if the alternative (known as
the disagreement outcome) is worse than what they could
achieve through agreement with the other party.3 Simply stated,
negotiators should reach an agreement with the other party if it
is in both their interests to do so. The utility of a mutual agreement is determined by the zone of agreement defined by negotiators' reservation prices (Raiffa, 1982). A negotiator's reservation price represents the minimum that he or she will settle for;
anything less represents an outcome that is worse than the disagreement outcome. Simply put, an individual's reservation
price is the point at which he or she can achieve equal or greater
utility by engaging in another course of action (e.g., dealing with
another party or simply maintaining the status quo).4 Bargaining zones may be positive or negative (Raiffa, 1982; Walton &
McKersie, 1965). A positive bargaining zone exists if negotia-
3
This is generally true, but subtleties arise depending upon the particular task. For example, Myerson (1987) proved that impasses occur
even when there are gains to trade when bargainers do not have complete information.
4
Whereas it is generally assumed that reservation prices are stable
and exogenously determined (e.g., they do not change as a result of the
bargaining process), other closely related concepts, such as comparison level for alternatives (Thibaut & Kelley, 1959), minimum necessary
share (Kelley, Beckman, & Fischer, 1967), reservation points (Walton
& McKersie, 1965), and minimum disposition (Ikle & Leites, 1962) are
more labile.
5
Lax and Sebenius (1987) argued that joint profit is not an especially
sensitive measure of integration and developed a measure, called the
integrative quotient, that measures the distance of the outcome from
the pareto optimal frontier. The few researchers who have used this
measure have reported high correlations between this measure and the
typical measure of joint profit (Weingart, Thompson, Bazerman, &
Carroll, 1990).
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LEIGH THOMPSON
nent (Lax & Sebenius, 1985). The distributive component reflects the primary motivation of negotiators: to maximize their
utility.6 A fundamental task for the negotiator is to divide resources in such a manner that he or she keeps most of the
bargaining surplus. The bargaining surplus is the difference
between one's reservation price and the final settlement
(Raiffa, 1982; Walton & McKersie, 1965).
Social-Psychological Measures
Social-psychological measures of negotiation performance
are based on concepts of social perception (Allport, 1955). The
elements of social perception include most aspects of perceivers' social worlds: people, their behaviors, and contexts or
situations (Schneider, Hastorf, & Ellsworth, 1979). The most
important elements of social perception in negotiation are negotiators' perceptions of the bargaining situation, the other party
or bargaining opponent, and themselves (Thompson & Hastie,
1990).
The key principles of social perception can be summarized
as list of principles or features (Schneider et al, 1979; Shaver,
1987). People actively perceive their social world by selecting,
categorizing, interpreting, and inferring information. For example, negotiators do not know what the interests of the other
party are but instead make inferences about their opponent
(Hammond et al, 1975; Harsanyi, 1962). In some sense, negotiators may not be aware of their own interests and values (Fischhoff, Slovic, & Lichtenstein, 1980; March, 1978) but rely on
cues to guide their behavior and choice (Bern, 1967). The perception process is constructive and selective; that is, perception
is influenced by the salience of information and the order in
which information is presented, as well as by perceivers' expectations, knowledge, and experience. Finally, people's perceptions influence their behavior.
The principles of social perception have special implications
for negotiation situations. In most bargaining situations, negotiators do not have the information necessary to perform an objective analysis of the bargaining situation. Consequently, negotiators' perceptions of the bargaining situation may be quite
different from that provided by an objective economic analysis
(Bazerman & Carroll, 1987; Thompson & Hastie, 1990, in
press). Negotiators' perceptions may not only differ from objective analyses but may also differ from those of the other party.
Thus two people involved in the same conflict may have different perceptions about the basis of conflict (Hammond et al.,
1975; Pinkley, 1990). People may perceive a conflict of interest
when in fact none exists, or they may fail to perceive conflict
when it does exist (Hammond, et al., 1975; Thompson & Hastie, in press). A number of cognitive and motivational heuristics
have been found to disturb the accuracy of social information
processing in a variety of domains (Fiske & Taylor, 1984; Markus & Zajonc, 1985), and similar heuristics have been found to
bias judgment and affect behavior in negotiation (Bazerman &
Neale, 1983; Thompson & Hastie, 1990, in press).
Perceptions of the Negotiation Situation
Perceptions of negotiation situations involve the judgments
that people make about the bargaining process and outcome.
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Economic Criteria
Mutual Agreement
Fry (1985) proposed a contingency model relationship between negotiator Machiavellianism and visual accessibility. Fry
reasoned that "low-Machiavellian" bargainers would be
aroused by and distracted in the presence of "high-" but not
low-Machiavellian bargaining opponents. Fry paired low-low,
519
Joint Outcomes
Cognitive ability. Integrative bargaining situations often require problem-solving behaviors to maximize joint gain
(Pruitt, 1983; Pruitt & Rubin, 1986). This analysis has led some
researchers to speculate that cognitive reasoning ability may
facilitate the problem-solving behavior necessary to reach integrative outcomes. Pruitt and Lewis (1975) hypothesized that
cognitively complex negotiators entertain more alternative conceptions of bargaining situations and gather and integrate more
information during bargaining. Therefore, cognitively complex
negotiators should be more likely to find mutually beneficial
solutions than would less cognitively complex negotiators. However, this hypothesis was not supported. Neale and Bazerman
(1983) examined another measure of cognitive functioning:
perspective-taking ability (Davis, 1981). They hypothesized
that failure to understand one's bargaining opponent is a primary cause of suboptimal negotiation performance. However,
perspective-taking ability did not affect joint performance, as
measured by the number of issues resolved.
Gender. Other researchers have hypothesized that the sex
composition of the dyad may affect integrative bargaining outcomes (Kimmel, Pruitt, Magenau, Konar-Goldband, & Carnevale, 1980; Rubin & Brown, 1975; Turnbull, Strickland, &
Shaver, 1976). For example, Kimmel et al. (1980) hypothesized
that men seek to maximize their own gains, whereas women
respond to the interpersonal aspect of the situation. However,
there was no support for this prediction.
Individual Outcomes
Machiavellianism. In general, Machiavellian bargainers
claim more resources than do non-Machiavellian bargainers
(Fry, 1985; Huber & Neale, 1986). According to Fry's (1985)
analysis, low-Machiavellian negotiators lose to high-Machiavellian negotiators because they are susceptible to the arousing,
emotional appeals put forth by high-Machiavellian bargainers.
However, Greenhalgh and Neslin (1983) found that Machiavellian bargainers performed worse than non-Machiavellians. The
negotiation task and measures of individual performance used
by Greenhalgh and Neslin differed in many respects from the
ones used by Fry and by Huber and Neale, and so this apparent
7
In many analyses of individual differences, such as Kelley and Stahelski's (1970) study of cooperators and competitors, researchers have
used the Prisoner's Dilemma paradigm, and those studies are not covered in this review.
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520
LEIGH THOMPSON
inconsistency may be attributable partly to the task. These results also suggest that trait Machiavellianism may not directly
influence negotiation behavior but may instead interact with
situational and task constraints to influence performance.
Cognitive ability. Cognitive reasoning skills have been predicted to increase negotiators' ability to claim resources. For
example, Neale and Bazerman (1983) reasoned that negotiators
with high perspective-taking ability would be able to persuade
their opponents to settle close to their reservation price and
therefore claim most of the bargaining surplus for themselves.
Results supported the hypothesis: Negotiators with high perspective-taking ability earned higher outcomes than did those
with low perspective-taking ability. Neale and Bazerman concluded that bargainers with high perspective-taking ability are
able to learn more information about their opponent, which
allows them to accurately assess their opponent's goals, expectations, and reservation price. However, Greenhalgh and Neslin (1983) found that perspective-taking ability was not predictive of individual utility. Again, the task and the dependent
measure of performance were different from those used by
Neale and Bazerman. The impact of perspective-taking ability
on performance may depend in part on the particular bargaining situation.
Social-Psychological Measures
Investigators of individual differences on social-psychological measures have primarily explored the direct effects of
gender and sex role orientation on perceptions.
Discussion
On the basis of the studies examined in this review, there is
some suggestion that certain individual differences may be related to bargaining behavior. The clearest relationships appear
among cognitive reasoning ability and individual performance
and among gender and perceptions of negotiation. However,
these conclusions are based on a small number of studies and
should therefore be viewed as tentative. A further caveat is that
researchers have not been consistent in their reporting of sex
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
find or did not report null results for gender.
The scant number of clear relationships observed in this review is consistent with Hamner's (1980) conclusion that there
are few significant relationships between personality and negotiation 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 directly and clearly linked to success in negotiation" (Lewicki &
Litterer, 1985, p. 276). However, this conclusion is incomplete
and overly simplistic. It is only reasonable to assume that individual characteristics influence bargaining behavior. People exhibit a great deal of consistency across situations, and this suggests that personality is an important influence on social behavior (Staw & Ross, 1985).
So, why do individual differences not appear to play a central
role in experimental investigations of negotiation? There are
several possible explanations (Lewicki & Litterer, 1985). First,
individual differences are often measured with a homogeneous
sample of subjects, usually college students. The failure to observe relationships between individual differences and bargaining behavior may be attributed partially to the narrow range of
individual differences within subject populations (Hamner,
1980). A second possibility concerns the assessment of individual differences. Most individual differences are assessed by
means of paper-and-pencil measures. However, the key dependent variables of interest in negotiation are typically behavioral
measures of performance. Given the inconsistency between attitudes and behavior and the unreliability of self-report measures, behavioral assessment of individual differences may
yield more reliable and consistent relationships with social behavior (Staw & Ross, 1985). A third explanation is that other
factors may outweigh the more subtle effects of personality in
bargaining (Davis-Blake & Pfeffer, 1989). Monson, Hesley, and
Chernick (1982) suggested that personality is more predictive
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Motivational Approaches
Motivational models of bargaining behavior examine the influence of aspirations and goals on bargaining behavior and
outcomes. Two general theoretical approaches have developed
within this broad area. According to one approach, aspiration
is a continuous, unidimensional concept ranging from low to
high (Hamner & Harnett, 1975; Siegel & Fouraker, 1960). Aspiration is denned in terms of utility theory, and a negotiator's
aspiration level is represented as a position on his or her bargaining utility function (Siegel, 1957). In general, the member
of the bargaining pair who has a higher level of aspiration obtains a larger share of the joint profit (Siegel & Fouraker, 1960).
Negotiators with high aspirations make smaller concessions,
make larger demands, take longer to reach agreement, and earn
higher profits than do negotiators with low aspirations (Siegel &
Fouraker, 1960).
The second approach differs from aspiration-level theories
by positing that bargaining goals are not unidimensional and
that the maximization of gain is not the primary goal of bargaining (Blake & Mouton, 1962; Pruitt & Rubin, 1986). According to the Dual Concern Model (Pruitt & Rubin, 1986), negotiators' goals are determined by two independent factors: negotiators' concern for themselves and their concern for the other
party. This approach also differs from aspiration-level theories
in that utility functions are not continuous but are modeled as
discrete functions. In the model, concern is either high or low
for each factor (self; other party), and the resulting product is a
four-cell matrix specifying the strategies associated with each
goal orientation. A key prediction of the Dual Concern Model
is that negotiators who have a high degree of concern for themselves coupled with a high degree of concern for the other party
will reach more integrative outcomes than will negotiators who
are concerned only with maximizing their own outcomes, negotiators who are concerned only with the other party, and negotiators who are not concerned with themselves or the other party.
Economic Criteria
Mutual Agreement
A key prediction of aspiration-level models is that high aspirations block opportunities for mutual agreement and increase
521
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LEIGH THOMPSON
plete negotiation transactions, which results in fewer transactions completed within a fixed amount of time (Neale & Bazerman, 1985b). Thus a curvilinear relationship between goal difficulty and total profitability exists when total profitability is
the product of the number and the value of completed transactions. Again, this is an instance in which apparently contradictory findings may be traced to different measures of performance.
Dual Concern Model. According to the Dual Concern
Model, the relationship between goals and outcomes is more
complex and requires consideration of negotiators' attitudes toward the other party (Pruitt & Rubin, 1986). The prediction is
that high aspirations will increase joint outcomes only when
the negotiator is concerned with the interests of the other party.
The first empirical examination bearing on this hypothesis (although not intended as a test of the model) was a study in which
negotiators were instructed either to maximize their own gains
(individualistic orientation) or to maximize joint gains (team
orientation; Kelley & Schenitzki, 1972). Furthermore, negotiators were told that their monetary payoffs would depend either
on their own outcomes or on the joint amount of resources
achieved. The paradoxical result was that negotiators with an
individualistic orientation achieved higher joint outcomes than
did those with a team orientation. However, this effect was
obtained only when negotiators communicated through written messages; the effect disappeared when negotiators communicated face to face. Schulz and Pruitt (1978) hypothesized that
negotiators with a team orientation would reach higher joint
outcomes if given an opportunity to divulge information about
their interestssomething they were not allowed to do in Kelley and Schenitzki's study. Negotiators were instructed to adopt
either an individualistic or a team orientation; some pairs communicated freely, and others were restricted to truthful information exchange. In contrast to Kelley and Schenitzki's finding, and in support of the Dual Concern Model, negotiators
with a team orientation achieved higher joint profits than did
pairs with individualistic orientations; the communication
conditions did not affect joint profitability.
In subsequent studies, Pruitt and his colleagues have tested
predictions of the Dual Concern Model by independently manipulating negotiators' concern for themselves and concern for
the other party. They manipulated concern for the self by informing negotiators that they were accountable to a larger constituency (Ben-Yoav & Pruitt, 1984b) or by providing negotiators
with an explicit goal to reach (Ben-%av & Pruitt, 1984a). They
operationalized concern for the other party by providing negotiators with a small gift (Carnevale & Isen, 1986; Pruitt et al.,
1982), leading some negotiators to expect cooperative future
interaction with their opponent (Ben-Yoav & Pruitt, 1984a,
1984b), or by encouraging negotiators to adopt a cooperative
orientation (Carnevale & Lawler, 1986). The prediction that
high concern for oneself coupled with high concern for the
other party leads to higher joint outcomes has generally been
supported (Ben-Yoav & Pruitt, 1984a, 1984b).
Individual Outcomes
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523
Discussion
Aspirations play an important role in determining bargaining behavior and performance. The research findings are clear
but complex: Higher aspirations increase profitability but decrease negotiators' willingness to concede from their target
A methodological complexity is the fact that the higher joint outcomes obtained in the high-aspiration conditions are confounded with
the measure of individual profit. A pure measure of individual profit
would require a comparison of outcomes within each bargaining pair.
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LEIGH THOMPSON
also contain unintentional clues about the variable-sum structure of the task. Simply put, if negotiators are told to maximize
joint outcomes, they may logically conclude that the task is not
a fixed-sum game. Thus the goal orientation is confounded
with information about the structure of the task.
The model also has difficulty accounting for how negotiators
who have individualistic orientations (e.g., no or little concern
for the other party) reach integrative outcomes (Bazerman et al,
1985; Kelley, 1966; Kimmel et al, 1980; Thompson & Hastie, in
press). According to the Dual Concern Model, integrative outcomes are reached through joint problem-solving in which both
parties are concerned with each other's welfare. However, high
joint outcomes may be reached without problem-solving efforts, through the efforts of each party to pursue his or her own
interests (Kelley & Schenitzki, 1972). The model has similar
difficulty explaining how negotiators who are presumably
highly concerned with their opponents' welfare (e.g., partners in
romantic relationships) fail to reach mutually beneficial outcomes (Fry, Firestone, & Williams, 1983).
Finally, the model is restrictive and difficult to generalize.
Concern for oneself and another is modeled in an overly simplistic fashion: either high or low. It is possible that negotiators
have more complex goals, such as a desire to reach a fair outcome (Loewenstein, Thompson, & Bazerman, 1989; Schelling,
1960). These alternative goals are not captured by the model.
Furthermore, the model's predictions are limited to situations
in which negotiators have the same bargaining orientation. It is
not clear what predictions would be made for situations in
which negotiators have different motivational orientations.
Cognitive Approach
According to the cognitive approach, negotiation is a complex decision-making task in which negotiators are faced with
alternative courses of action, and choices among behavioral alternatives are determined by negotiators' judgments of the task
(Bazerman & Carroll, 1987). Negotiators construct mental representations of the negotiation situation and their opponent,
and their behavior is influenced by their judgments of the other
party, their own bargaining role, and the bargaining situation.
The basis of the cognitive approach is information-processing theory (Bazerman & Carroll, 1987; Carroll & Payne, in
press). Cognitive information-processing theory is a theory of
the mind of the individual actor. The essential elements of the
information-processing approach are presented as a list of general principles briefly described here (see Anderson, 1985, and
Hastie, 1986, for more extensive treatments). The fundamental
material of the information-processing approach is information. Information is typically represented as a list of features;
concepts are represented as nodes labeled with a word or a
phrase, and relations between idea nodes are symbolized theoretically as links in a network. Information is stored in memory
in one of several alternative structures. The most common is a
list of concepts, wherein each concept is linked to one or two
adjacent nodes. Information is available according to simple
spreading-activation principles. Activation spreads from a
currently active location in a knowledge structure to other
nearby locations; the spread is rapid, and the amount of activation of proximate locations is inversely related to the number of
Economic Criteria
Mutual Agreement
Neale and Bazerman (1985a) derived a prediction from prospect theory to examine whether a negotiator's mental representation of the task, or cognitive frame, influences bargaining
behavior. According to prospect theory (Kahneman & Tversky,
1979), people have different utility functions for gain and loss,
and objectively identical decision tasks produce different
choices among identical options when the reference point defining gain and loss is altered. The hypothesis was that negotiators who were risk averse would be more likely to make concessions to avoid an impasse; in contrast, risk-seeking negotiators
would be less likely to make concessions and more likely to risk
an impasse. Neale and Bazerman examined two factors that
they thought would affect risk aversion: the framing of negotiation payoffs and negotiators' judgments of the probability that
their offer would be selected by a neutral third party under
final offer arbitration. They manipulated reference points by
instructing some negotiators to "maximize gain" and providing
negotiators with payoff schedules containing positive numbers;
negotiators with a negative frame were instructed to "minimize
loss" and were provided with a payoff schedule containing negative numbers. Of course, the negotiation tasks were objectively
identical. Neale and Bazerman further hypothesized that negotiators who believed that an arbitrator would choose their offer
under final offer arbitration would be less likely to compromise
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525
party places the same importance on, or has the same priorities
for, the negotiation issues as they do when in fact negotiators
have different priorities is referred to as the fixed-pie error (Bazerman & Neale, 1983; Thompson & Hastie, in press). Thompson and Hastie (1990, in press) measured negotiators' perceptions several times during negotiation and found that judgment
accuracy was strongly related to negotiation outcomes: negotiators who made accurate priority and compatibility judgments
attained higher joint outcomes than did those who made fixedpie and incompatibility errors. The conclusion was that negotiators' perceptions influence their behavior and the quality of
their outcomes.
Joint Outcomes
Framing of negotiation payoffs.
Predictions derived from
prospect theory have also been tested to examine joint profitability in negotiation (Bazerman et al, 1985; Neale & Bazerman, 1985a; Neale, Huber & Northcraft, 1987; Neale & Northcraft, 1986). The prediction is that negotiators with a positive
frame (who view negotiation in terms of maximizing gain)
should be risk averse, whereas those with a negative frame (who
view negotiation in terms of minimizing loss) should be risk
seeking. Risk aversion should lead to more concessionary behavior and higher joint outcomes; risk seeking should lead to
more contentious behavior and more impasses, resulting in
lower joint outcomes. This prediction has received support in a
number of studies (Bazerman et al, 1985; Neale & Bazerman,
1985a; Neale et al, 1987; Neale & Northcraft, 1986). However,
there is an important qualification. Most of this research is
based on market simulations in which negotiators make a number of transactions. Positively framed negotiators complete
more transactions than do negatively framed negotiators, which
results in greater total profit; however, negatively framed negotiators earn more per transaction (Bazerman et al, 1985; Neale &
Bazerman, 1985b; Neale et al, 1987; Neale & Northcraft, 1986).
Again, this is an example of how different measures of performance appear to yield inconsistent results.
Judgment accuracy. Thompson and Hastie (1990, in press)
hypothesized that misperceptions of the other party are a primary cause of suboptimal outcomes in negotiation. They reasoned that a key judgment that negotiators make concerns their
perception of the other party's interests and the structure of the
bargaining task (e.g., purely competitive or integrative; Thompson & Hastie, 1990, in press). Thompson and Hastie identified
two critical judgments that negotiators make about the other
party's interests: compatibility judgments and priority judgments. When negotiators make compatibility judgments, they
determine whether all or only some of their interests are incompatible with those of the other party. The tendency to perceive
conflict when none exists is referred to as incompatability error
(Thompson & Hastie, in press). Priority judgments concern
negotiators' perceptions of the other party's evaluation of the
relative importance of the to-be-negotiated issues. If the two
parties have different evaluations of the relative importance of
the issues, then an integrative solution is possible (Pruitt &
Rubin, 1986; Raiffa, 1982). Simply put, when negotiators have
different values, each has something to offer that is relatively
less valuable to them than to those with whom they are bargaining. The tendency for negotiators to assume that the other
Claiming Resources
Framing of negotiation payoffs. Buyers tend to outperform
sellers in symmetric bargaining tasks (Bazerman et al, 1985;
Eliashberg, LaTour, Rangaswamy, & Stern, 1986; Huber &
Neale, 1986; McAlister et al, 1986; Neale & Northcraft, 1986).
This effect is perplexing because the roles of "buyer" and
"seller" in these laboratory tasks are objectively identical; neither party has an inherent advantage. Neale et al. (1987) hypothesized that this phenomenon may be interpreted as a framing effect. They reasoned that buyers view negotiation in terms
of losing resources or giving up something, whereas sellers view
negotiation in terms of gaining resources. This interpretation,
in light of prospect theory's prediction that people have different utility functions for gain and loss, suggests that buyers are
risk seeking and sellers are risk averse. Neale et al. hypothesized
that the more risk seeking the negotiator is, the higher the premium he or she would demand for a negotiated settlement and
the greater amount of resources he or she would claim. To test
their hypothesis, Neale et al. had some negotiators complete a
traditional negotiation task involving buyer and seller roles; the
other subjects completed a task that was objectively identical
except that the context was changed: the labels buyer and seller
were changed to mythical names that presumably would not
lead to different gain/loss frames. When role information was
absent (mythical roles), task characteristics influenced mean
profit per transaction: Negatively framed bargainers outperformed positively framed bargainers. However, when role information was present (buyer-seller roles), role information influenced mean profit per transaction: Buyers outperformed
sellers. The conclusion was that there are multiple sources of
framing bias in negotiation: those that are responses to task
demands and those that are contextually elicited by roles.
Judgment accuracy. Thompson and Hastie (1990, in press)
hypothesized that the accuracy of negotiators' perceptions of
the other party's interests should play a large role in determining outcomes. The reasoning was that negotiators who make
inaccurate judgments about the other party assume that the
other party's interests are completely opposed to their own, and
they therefore overlook opportunities for mutual gain and settle
for suboptimal solutions. In a series of studies, the relationship
between the accuracy of priority and compatibility judgments
and bargaining performance was examined. A strong relationship between judgment accuracy and payoffs emerged: Negotiators who made more accurate judgments about the other party's
interests earned higher individual payoffs.
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LEIGH THOMPSON
negotiators' values and the other party's interests. When negotiators are uncertain about their own interests or have conflicting
interests, then reactive devaluation processes most likely characterize bargaining behavior. However, when negotiators' own
interests are available and clear, then fixed-pie and incompatibility inferences characterize bargaining behavior. The important implication is that both inference processes lead to the
perception of conflict between parties.
Perceptions of the Self
Self-serving evaluations. Negotiators make self-serving attributions and evaluations in bargaining (Brandstatter, Kette, &
Sageder, 1982; Turnbull et al, 1976). For example, negotiators
who are unable to reach mutually acceptable agreements blame
their opponent for the failure, whereas they usually attribute
success to themselves (Brandstatter et al, 1982). This pattern of
results is consistent with research in other social domains that
suggests that people make self-serving attributions for success
and failure (McFarland & Ross, 1982) and make self-enhancing
downward social comparisons (Wills, 1981).
Overconfidence. Overconfidence in judgment is closely related to self-serving processes and is pervasive in bargaining.
For example, Neale and Bazerman (1983) examined negotiators' perceptions that an arbitrator would favor their proposal
over the proposal suggested by their adversary. The majority of
negotiators believed that an arbitrator would favor their proposal. Neale and Bazerman reasoned that negotiators were
overconfident when they made probability estimates greater
than 50% because, on average, negotiators should expect that
their offer will be selected by a neutral third party about half of
the time.
Discussion
The cognitive approach is especially appealing because it is
an attempt to predict behavior across a broad range of people
and situations. Another advantage of the approach is that it
provides methodological tools, such as recall and think-aloud
measures that have proved useful in identifying constructs,
measuring variables, and exploring implications of the approach. Finally, the cognitive approach provides conceptual
links to other social-cognitive theories at different levels of scientific analysis. The approach, however, is not complete. It
shares all of the disadvantages associated with more general
cognitive information-processing models (cf. Hastie, 1986) and
also has some unique shortcomings. First, the cognitive approach is still in its infancy. Although this is not a disadvantage
per se, a coherent, internally consistent, falsifiable theory of the
negotiator has not been developed, and the approach does not
readily suggest testable implications. Second, the current application of methodological tools is incomplete. Research methodologies often fall short of a thorough information-processing
analysis (Carroll & Payne, in press). Judgment processes and
products are often inferred on basis of negotiation outcomes
rather through direct examination. Some exceptions are
Carroll et al.'s (1988) think-aloud study of decision-making processes in competitive situations and Thompson and Hastie's
(1990, in press) think-aloud analysis of judgment error in negoti-
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Theoretical Issues
It was clear before I wrote this article that normative models
do not adequately account for empirical observations of bargaining. My argument is that psychological theories of negotiation provide the best approach for understanding negotiation
behavior. The descriptive approaches examined in this article
offer important insights for understanding negotiation, but
each also contains shortcomings and limitations. In this review,
527
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LEIGH THOMPSON
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Negotiation Experience
Thompson (1990) challenged negotiators with several bargaining tasks, each requiring unique solutions in order to reach
integrative agreement. Thus in contrast to bargaining markets
in which bargainers negotiate with opponents who all have the
same preferences, one could not reach integrative solutions in
Thompson's tasks by merely applying the same solution. Negotiators engaged in seven bargaining tasks (the high-experience
group); their opponents had either no experience or just a single
previous bargaining experience (the naive group). Logrolling
skills improved as negotiators gained experience. Furthermore,
negotiators were more successful in logrolling when the naive
member of the bargaining pair had just a single previous experience as opposed to no previous experience, and highly experienced bargainers were able to claim a larger share of the resources at the expense of their naive opponents. There was an
important caveat on the experience-performance relationship:
Experience did not improve negotiators' ability to recognize
compatible issues. At least one negotiator in 71% of all pairs
failed to realize that some interests of the other party were
perfectly compatible with their own; 20% of the pairs reached
suboptimal outcomes on compatible issues.
In another study, Thompson (in press-b) reasoned that experience may not always have a beneficial effect on performance
and could potentially hinder negotiators' ability to reach integrative agreements. Thompson reasoned that negotiators who
engaged in purely distributive negotiations would develop a
fixed-pie perception of the task. When they are confronted
with a subsequent integrative negotiation situation, their performance may be hindered as a consequence of their erroneous
expectation that is based on their experience. The hypothesis
was supported: Negotiators who had experience in tasks with
logrolling potential performed better in a subsequent logrolling
task than did negotiators whose initial experience was in a distributive task.
The purpose of this article has been to address the important
empirical and theoretical issues in negotiation research. Because negotiation behavior is a fundamental form of social interaction, it is a major area of research in several fields. A number of perspectives that attempt to predict behavior and performance have emerged, and a number of performance criteria
have been identified to measure performance. In this article I
have identified some important factors that predict negotiation
behavior and performance and some theoretical issues for future research.
529
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