What Makes Negotiators Happy? The Differential Effects of Internal and External Social Comparisons on Negotiator Satisfaction

40 Pages Posted: 5 Apr 2004

See all articles by Nathan Novemsky

Nathan Novemsky

Yale School of Management

Maurice E. Schweitzer

University of Pennsylvania - Operations & Information Management Department

Date Written: July 15, 2004

Abstract

This article examines the role of internal and external social comparisons in negotiator satisfaction. Internal comparisons involve another party to the negotiation (e.g. buyer compared to seller), while external comparisons focus on someone outside of the negotiation (e.g. buyer compared to other buyers). Negotiator satisfaction can influence a range of post-negotiation behavior, but relatively little is known about what makes negotiators more or less satisfied. In many contexts negotiators receive little objective feedback and lack benchmarks against which to judge their outcome. Prior work has modeled negotiator satisfaction as a function of utility maximization, expectancy disconfirmation and internal social comparisons (social utility). In this article we identify another particularly important driver of negotiator satisfaction, external social comparisons. Across five studies we demonstrate that external social comparisons affect satisfaction and that the effects of external social comparisons are qualitatively different from those of internal social comparisons. In particular, we find that downward external social comparisons increase satisfaction, while downward internal social comparisons decrease satisfaction. These results inform important prescriptions, and we discuss implications of these results for managing negotiator satisfaction.

Keywords: Negotiation, Satisfaction, Social Comparison

Suggested Citation

Novemsky, Nathan and Schweitzer, Maurice E., What Makes Negotiators Happy? The Differential Effects of Internal and External Social Comparisons on Negotiator Satisfaction (July 15, 2004). IACM 17th Annual Conference Paper. Available at SSRN: https://ssrn.com/abstract=524805 or http://dx.doi.org/10.2139/ssrn.524805

Nathan Novemsky (Contact Author)

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

Maurice E. Schweitzer

University of Pennsylvania - Operations & Information Management Department ( email )

Philadelphia, PA 19104
United States
215-898-4776 (Phone)
215-898-3664 (Fax)

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