When are Teams an Asset in Negotiations and When are They a Liability?

Abstract

Purpose: We consider the question of when teams are an asset at the negotiating table and when they are a liability.

Methodology: We center our review on three key “empirical truths” about teams. First, teams are better than individuals at solving problems. Second, teams are more self-interested than individuals. Third, teams are trusted less and are less trusting than individuals.

Findings: Teams have an advantage over solo negotiators when there is unshared information and multiple issues on the table. Teams have an advantage in these contexts because of their superior problem-solving abilities. However, teams are more likely than solos to suffer from costly and uncertain legal action due to failures in dispute resolution and earn lower profits than solos in negotiations with a prisoner’s dilemma structure. Thus, because teams are more self-interested and less trusted than individuals, they can be a liability in negotiations in which the parties’ interests are opposed.

Implications: To the leverage the positive effects of teams in negotiation, it is critical that negotiators determine whether the context is one that allows for coordination and integrative tradeoffs, such as multi-issue deal-making negotiations, versus one that is characterized by noncorrespondent outcomes and incompatible interests, such as disputes and prisoner’s dilemma interactions.

Value of the paper: The term “negotiation” has been applied rather broadly to a complex assortment of mixed-motive tasks. Our review indicates that distinguishing among these tasks is paramount to meaningfully address questions of individual versus group performance in negotiation.

Keywords: teams, groups, negotiation, prisoner’s dilemma game, dispute resolution,