Mental Accounting for Negotiation and Exchange

31 Pages Posted: 24 Oct 2009 Last revised: 11 Nov 2009

See all articles by Alexandra Mislin

Alexandra Mislin

American University - Kogod School of Business

William P. Bottom

Washington University in St. Louis - John M. Olin Business School

Peter A Boumgarden

Washington University in St. Louis

Date Written: June 15, 2009

Abstract

Complex negotiations occur within a broader stream of ongoing social exchange, but negotiation research focuses on narrowly circumscribed encounters. Building on Trivers’ model of reciprocal altruism and Thaler’s theory of mental accounting, we propose a model of a negotiator who opens and updates ‘relational accounts’ that regulate social exchange. The accounts generate particular emotional response profiles forming the basis for social motives to compete, cooperate, or self-sacrifice. In one study we manipulated Thaler’s mental accounting scenarios to test whether these emotional responses mediate the impact of specific social events on social motives. Having found evidence for this mediation, we ran a second study testing whether social motive mediates the impact of specific events on the vigor with which a party implements the terms of a negotiated agreement. Evidence for this mediation helps to fill a significant gap in our current understanding of the implementation process. Implications of mental accounting for the development of a general, multi-level behavioral theory of negotiation are considered.

Suggested Citation

Mislin, Alexandra and Bottom, William P. and Boumgarden, Peter A, Mental Accounting for Negotiation and Exchange (June 15, 2009). 22nd Annual IACM Conference Paper. Available at SSRN: https://ssrn.com/abstract=1493534 or http://dx.doi.org/10.2139/ssrn.1493534

Alexandra Mislin (Contact Author)

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States

William P. Bottom

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-6351 (Phone)
314-935-6359 (Fax)

HOME PAGE: http://www.olin.wustl.edu/faculty/bottom.html

Peter A Boumgarden

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

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