Structural Differences in Electronically Mediated Ultimatum Negotiations: How Negotiation Role and Awareness of Alternatives Influence Customer Outcomes

11 Pages Posted: 20 May 2005

See all articles by Donald E. Conlon

Donald E. Conlon

Michigan State University - Department of Management

Catherine H. Tinsley

Georgetown University - Department of Management

Stephen E. Humphrey

Pennsylvania State University - Department of Management & Organization

Aleksander Ellis

Michigan State University - Department of Psychology

Date Written: 2005

Abstract

Bargaining activities now often take place electronically. Many travel-related exchanges occur through discount intermediaries such as Priceline and Hotwire, who offer customers opportunities to acquire travel-related items at reduced cost; in return customers give up prior knowledge regarding what hotel or airline will provide them service. We examine the bidding behavior and subjective reactions of customers who experience different intermediary structures, and different numbers of alternatives. Subjects participated in an electronic simulation to purchase a hotel room for a future trip. The task structure varied: Subjects were either in the role of offerer (providing a specific price for the hotel, which the intermediary then accepted or rejected) or acceptor (receiving a specific price for the hotel from the intermediary, which the subject then accepted or rejected). In addition, the intermediary provided them with one or three potential hotels from which to choose. Our results call into question some of the assumptions inherent in the ultimatum bargaining literature, such as the belief that participants prefer to be in the role of offerer, as in our context we find that participants prefer to be in the role of the acceptor. We discuss this and other findings related to our manipulations and to characteristics of the participants (such as self-efficacy and uncertainty avoidance).

Suggested Citation

Conlon, Donald Edward and Tinsley, Catherine H. and Humphrey, Stephen E. and Ellis, Aleksander, Structural Differences in Electronically Mediated Ultimatum Negotiations: How Negotiation Role and Awareness of Alternatives Influence Customer Outcomes (2005). Available at SSRN: https://ssrn.com/abstract=726181 or http://dx.doi.org/10.2139/ssrn.726181

Donald Edward Conlon (Contact Author)

Michigan State University - Department of Management ( email )

North Business Complex
East Lansing, MI 48824-1122
United States
517-432-3519 (Phone)

Catherine H. Tinsley

Georgetown University - Department of Management ( email )

Rafik B Hariri Building
McDonough School of Business
Washington, DC 20057
United States
202-687-2524 (Phone)

HOME PAGE: http://explore.georgetown.edu/people/tinsleyc/

Stephen E. Humphrey

Pennsylvania State University - Department of Management & Organization ( email )

University Park, PA 16802-3306
United States

Aleksander Ellis

Michigan State University - Department of Psychology ( email )

Agriculture Hall
East Lansing, MI 48824-1122
United States

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