Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets

Research output: Journal contributionsJournal articlesResearchpeer-review

Standard

Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets. / Lee, Alice J.; Loschelder, David D.; Schweinsberg, Martin et al.
In: Organizational Behavior and Human Decision Processes, Vol. 148, 01.09.2018, p. 87-100.

Research output: Journal contributionsJournal articlesResearchpeer-review

Harvard

APA

Vancouver

Bibtex

@article{ac6c7f63e13e4260a1044b76bca5dd9e,
title = "Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets",
abstract = "Prior research shows that precise first offers strongly anchor negotiation outcomes. This precision advantage, however, has been documented only when the parties were already in a negotiation. We introduce the concept of negotiation entry, i.e., the decision to enter a negotiation with a particular party. We predict that precise prices create barriers-to-entry, reducing a counterpart's likelihood of entering a negotiation. Six studies (N = 1580) and one archival analysis of real estate data (N = 11,203) support our barrier-to-entry prediction: Potential negotiators were less likely to enter a negotiation with precise- versus round-offer makers. Using both statistical mediation and experimental-causal-chain analyses, we establish that perceptions of offer-maker inflexibility underlie the precision barrier. Furthermore, we demonstrate that the precision mechanism (inflexibility) is distinct from the extremity mechanism (being offended) that produces barriers-to-entry from extreme first offers. The discussion theoretically integrates research on first-offer precision and extremity by offering the Precision-Extremity Model of First Offers.",
keywords = "Anchor precision, Barriers-to-entry, Decision making, First offers, Negotiation entry, Social attribution, Psychology, Business psychology",
author = "Lee, {Alice J.} and Loschelder, {David D.} and Martin Schweinsberg and Mason, {Malia F.} and Galinsky, {Adam D.}",
year = "2018",
month = sep,
day = "1",
doi = "10.1016/j.obhdp.2018.03.001",
language = "English",
volume = "148",
pages = "87--100",
journal = "Organizational Behavior and Human Decision Processes",
issn = "0749-5978",
publisher = "Academic Press Inc.",

}

RIS

TY - JOUR

T1 - Too precise to pursue

T2 - How precise first offers create barriers-to-entry in negotiations and markets

AU - Lee, Alice J.

AU - Loschelder, David D.

AU - Schweinsberg, Martin

AU - Mason, Malia F.

AU - Galinsky, Adam D.

PY - 2018/9/1

Y1 - 2018/9/1

N2 - Prior research shows that precise first offers strongly anchor negotiation outcomes. This precision advantage, however, has been documented only when the parties were already in a negotiation. We introduce the concept of negotiation entry, i.e., the decision to enter a negotiation with a particular party. We predict that precise prices create barriers-to-entry, reducing a counterpart's likelihood of entering a negotiation. Six studies (N = 1580) and one archival analysis of real estate data (N = 11,203) support our barrier-to-entry prediction: Potential negotiators were less likely to enter a negotiation with precise- versus round-offer makers. Using both statistical mediation and experimental-causal-chain analyses, we establish that perceptions of offer-maker inflexibility underlie the precision barrier. Furthermore, we demonstrate that the precision mechanism (inflexibility) is distinct from the extremity mechanism (being offended) that produces barriers-to-entry from extreme first offers. The discussion theoretically integrates research on first-offer precision and extremity by offering the Precision-Extremity Model of First Offers.

AB - Prior research shows that precise first offers strongly anchor negotiation outcomes. This precision advantage, however, has been documented only when the parties were already in a negotiation. We introduce the concept of negotiation entry, i.e., the decision to enter a negotiation with a particular party. We predict that precise prices create barriers-to-entry, reducing a counterpart's likelihood of entering a negotiation. Six studies (N = 1580) and one archival analysis of real estate data (N = 11,203) support our barrier-to-entry prediction: Potential negotiators were less likely to enter a negotiation with precise- versus round-offer makers. Using both statistical mediation and experimental-causal-chain analyses, we establish that perceptions of offer-maker inflexibility underlie the precision barrier. Furthermore, we demonstrate that the precision mechanism (inflexibility) is distinct from the extremity mechanism (being offended) that produces barriers-to-entry from extreme first offers. The discussion theoretically integrates research on first-offer precision and extremity by offering the Precision-Extremity Model of First Offers.

KW - Anchor precision

KW - Barriers-to-entry

KW - Decision making

KW - First offers

KW - Negotiation entry

KW - Social attribution

KW - Psychology

KW - Business psychology

UR - http://www.scopus.com/inward/record.url?scp=85050943080&partnerID=8YFLogxK

U2 - 10.1016/j.obhdp.2018.03.001

DO - 10.1016/j.obhdp.2018.03.001

M3 - Journal articles

AN - SCOPUS:85050943080

VL - 148

SP - 87

EP - 100

JO - Organizational Behavior and Human Decision Processes

JF - Organizational Behavior and Human Decision Processes

SN - 0749-5978

ER -

Recently viewed

Researchers

  1. Dorit Gräbnitz

Publications

  1. Cyberspace Battleground
  2. Spurred Emulation
  3. Isolation Playground
  4. Transdisziplinäre Integration in der Universität
  5. EU-Prüferreform „light“?!
  6. Transnational labour solidarity
  7. Die Herausforderung der Migration
  8. Multilevel Party Politics during the Grand Coalition
  9. Multi-Level Governance in Universities
  10. Fedeli alla linea "Getreu der Linie mit Marx" neu beginnen
  11. Der europäische Weg
  12. Einführung in die Ästhetische Bildung
  13. Exkursion in die Coy-Galaxis
  14. Anpassung oder Widerstand?
  15. Ästhetische Erziehung
  16. Escape. Computerspiele als Kulturtechnik
  17. The Publics Behind Political Web Campaigning
  18. Distant regions underpin interregional flows of cultural ecosystem services provided by birds and mammals
  19. The reputation costs of executive misconduct accusations
  20. CoLab
  21. Comfortable Time Headways in Adaptive Cruise Control:
  22. Angst and unsustainability in postmodern times
  23. Der Unort von Karten und das Nirgendwo der Kunst
  24. Aufgaben 2.0
  25. Migration Struggles and the Global Justice Movement
  26. Mechanismen der Veränderung von Organisationen
  27. Vergleichende Regionalismusforschung und Diffusion
  28. Economic analysis of trade-offs between justices
  29. Vernarrt in die Soziologie
  30. Adaptation knowledge for New Zealand's primary industries: Known, not known and needed
  31. Spent mushroom substrate and sawdust to produce mycelium-based thermal insulation composites
  32. Taboo metaphtonymy, gender, and impoliteness
  33. The WTO’s Crisis
  34. Lebhafte Artefakte
  35. On Knowing Too Much
  36. Optical part measuring inside a milling machine
  37. Entrepreneurial orientation and business performance – A replication study