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Countering Negotiation Power Asymmetries with the Adjusted Winner Algorithm?

19 Pages Posted: 9 Apr 2011  

Katrin Bloch

University of Kassel - Dialog Marketing Competence Center (DMCC)

Ralf Wagner

University of Kassel - Dialog Marketing Competence Center (DMCC)

Date Written: March 7, 2011

Abstract

Despite considerable interest in the improvement of negotiation results, commercial negotiations rarely follow formal negotiation procedures. This study investigates the relationship between bargaining power shift and success in a formalized negotiation experiment. Results of an experiment that addresses issue authority as a proxy of bargaining power show that differences in issue authority allocation significantly affect negotiation success. In scenarios with substantial differences in bargaining power, particularly female and mixed dyads failed to achieve a mutually satisfactory result. This study investigates whether mathematical negotiation procedures will guide the parties to an efficient negotiation result and thus dilute these differences. Results show that (a) an increase in issue authority for one of the two parties does not necessarily lead to an increase in negotiation efficiency and (b) the use of mathematical formal negotiation procedures eminently improves the results and helps to overcome the difficulty of unsatisfying results. These differences demonstrate that bargaining power in commercial negotiations does not compensate for insufficient negotiation skill or effort. On the contrary, unbalanced bargaining power decreases the likelihood of success.

Keywords: Power and Status in Conflict, Negotiation Processes, Games and Social Dilemmas

JEL Classification: C7

Suggested Citation

Bloch, Katrin and Wagner, Ralf, Countering Negotiation Power Asymmetries with the Adjusted Winner Algorithm? (March 7, 2011). Available at SSRN: https://ssrn.com/abstract=1805025 or http://dx.doi.org/10.2139/ssrn.1805025

Katrin Bloch (Contact Author)

University of Kassel - Dialog Marketing Competence Center (DMCC) ( email )

Mönchebergstr.1
Kassel, DE 34125
Germany

HOME PAGE: http://cms.uni-kassel.de/unicms/index.php?id=fb7_ibwl_wagner

Ralf Wagner

University of Kassel - Dialog Marketing Competence Center (DMCC) ( email )

Mönchebergstr.1
Kassel, DE 34125
Germany

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