Paying a Price: Culture, Trust, and Negotiation Consequences

Abstract

Three studies contrasting Indian and American negotiators tested hypotheses derived from theory proposing why there are cultural differences in trust and how cultural differences in trust influence negotiation strategy. Study 1 (a survey) documented that Indian negotiators trust their counterparts less than American negotiators. Study 2 (a negotiation simulation) linked American and Indian negotiators’ self-reported trust and strategy to their insight and joint gains. Study 3 replicated and extended Study 2 using independently coded negotiation strategy data, allowing for stronger causal inference. Overall, the strategy associated with Indian negotiators’ reluctance to extend interpersonal (as opposed to institutional) trust produced relatively poor outcomes. Our data support an expanded theoretical model of negotiation, linking culture to trust, strategies, and outcomes.

Keywords: culture, trust, negotiation strategy, Indian and U.S. negotiators