TY - JOUR

T1 - Bargaining zone distortion in negotiations

T2 - The elusive power of multiple alternatives

AU - Schaerer, Michael

AU - Loschelder, David D.

AU - Swaab, Roderick I.

PY - 2016/11/1

Y1 - 2016/11/1

N2 - We challenge the assumption that having multiple alternatives is always better than a single alternative by showing that negotiators who have additional alternatives ironically exhibit downward-biased perceptions of their own and their opponent's reservation price, make lower demands, and achieve worse outcomes in distributive negotiations. Five studies demonstrate that the apparent benefits of multiple alternatives are elusive because multiple alternatives led to less ambitious first offers (Studies 1–2) and less profitable agreements (Study 3). This distributive disadvantage emerged because negotiators’ perception of the bargaining zone was more distorted when they had additional (less attractive) alternatives than when they only had a single alternative (Studies 1–3). We further found that this multiple-alternatives disadvantage only emerges when negotiators used quantitative (versus qualitative) evaluation standards to gauge the extremity of their offers (Study 4), and when they base their offers on their own numerical alternative(s) versus on opponent information (Study 5).

AB - We challenge the assumption that having multiple alternatives is always better than a single alternative by showing that negotiators who have additional alternatives ironically exhibit downward-biased perceptions of their own and their opponent's reservation price, make lower demands, and achieve worse outcomes in distributive negotiations. Five studies demonstrate that the apparent benefits of multiple alternatives are elusive because multiple alternatives led to less ambitious first offers (Studies 1–2) and less profitable agreements (Study 3). This distributive disadvantage emerged because negotiators’ perception of the bargaining zone was more distorted when they had additional (less attractive) alternatives than when they only had a single alternative (Studies 1–3). We further found that this multiple-alternatives disadvantage only emerges when negotiators used quantitative (versus qualitative) evaluation standards to gauge the extremity of their offers (Study 4), and when they base their offers on their own numerical alternative(s) versus on opponent information (Study 5).

KW - Business psychology

KW - Alternatives

KW - Anchoring

KW - Bargaining zone

KW - BATNA

KW - First offer

KW - Multiple alternatives

KW - Negotiations

KW - Power

KW - Scale distortion

UR - http://www.scopus.com/inward/record.url?scp=84989322247&partnerID=8YFLogxK

U2 - 10.1016/j.obhdp.2016.09.001

DO - 10.1016/j.obhdp.2016.09.001

M3 - Journal articles

AN - SCOPUS:84989322247

VL - 137

SP - 156

EP - 171

JO - Organizational Behavior and Human Decision Processes

JF - Organizational Behavior and Human Decision Processes

SN - 0749-5978

ER -