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Disconnecting outcomes and evaluations: The role of negotiator focus

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Abstract

Three experiments explored the role of negotiator focus in disconnecting negotiated outcomes and evaluations. Negotiators who focused on their target prices, the ideal outcome they could obtain, achieved objectively superior outcomes compared with negotiators who focused on their lower bound (e.g., reservation price). Those negotiators who focused on their targets, however, were less satisfied with their objectively superior outcomes. In the final experiment, when negotiators were reminded of their lower bound after the negotiation, the satisfaction of those negotiators who had focused on their target prices was increased, with outcomes and evaluations becoming connected rather than disconnected. The possible negative effects of setting high goals and the temporal dimensions of the disconnection and reconnection between outcomes and evaluations are discussed.
Disconnecting Outcomes and Evaluations:
The Role of Negotiator Focus
Adam D. Galinsky
Northwestern University Thomas Mussweiler
Universita¨t Wu¨rzburg
Victoria Husted Medvec
Northwestern University
Three experiments explored the role of negotiator focus in disconnecting negotiated outcomes and
evaluations. Negotiators who focused on their target prices, the ideal outcome they could obtain, achieved
objectively superior outcomes compared with negotiators who focused on their lower bound (e.g.,
reservation price). Those negotiators who focused on their targets, however, were less satisfied with their
objectively superior outcomes. In the final experiment, when negotiators were reminded of their lower
bound after the negotiation, the satisfaction of those negotiators who had focused on their target prices
was increased, with outcomes and evaluations becoming connected rather than disconnected. The
possible negative effects of setting high goals and the temporal dimensions of the disconnection and
reconnection between outcomes and evaluations are discussed.
Given that so many important aspects of life depend on the
outcomes of negotiations, it seems natural that people try to
maximize their potential gains when negotiating with others. To
procure beneficial outcomes, negotiators should set aggressive,
motivating goals for themselves. In fact, many negotiators do set
high goals (Kelley, 1966), and there is a relationship between the
extremity of these goals and negotiated outcomes; more extreme
goals produce more favorable outcomes (White & Neale, 1994).
But, we hypothesize, although aggressive goals can improve per-
formance and increase the value of negotiated outcomes, they can
also become a subjective curse. Although striving to achieve their
goals allows people to maximize their objective outcomes, they
often do not fully achieve all of their dreams and desires. A goal
that inspired them may become, in the postnegotiation evaluation
phase, a vexing standard of comparison.
In this article we explore the effects that negotiator focus has on
negotiated outcomes and on the evaluations of those outcomes.
There are multiple points within a negotiator’s bargaining position,
from target price—the ideal or most preferred outcome—to a
minimally acceptable settlement price on which a negotiator can
focus. In three experiments, we demonstrate that these disparate
points of a negotiator’s bargaining position have a differential—
and paradoxical—impact on outcomes and evaluations. Those
focal points, such as target prices, that guide negotiators toward
beneficial outcomes also lead negotiators to feel dissatisfied with
those objectively superior outcomes. On the other hand, minimally
acceptable settlement points, or lower bounds—such as reservation
prices and the best alternative to a negotiated agreement
(BATNA)—lead negotiators toward suboptimal outcomes but
leave them pleased and content with those outcomes.
The experiments reported here extend research and theory by
demonstrating a systematic disconnection between outcomes and
evaluations in negotiations. Previous experiments on negotiations
have only investigated the effect of focal points on either objective
outcomes (White & Neale, 1994) or evaluations (Thompson, 1995)
but have not investigated the differential impact of negotiator
focus on both outcomes and evaluations in the same experiment. In
addition, previous experiments have only explored perceptions of
negotiator satisfaction in hypothetical negotiations, whereas the
current research uses actual negotiations. In the present research
we show that the disconnection between outcomes and evaluations
occurs regardless of whether target prices are exogenously pro-
vided (Experiment 1) or are self-generated (Experiments 2 and 3).
Finally, we show that when negotiators focus on a target price in
the preparation stage and later focus on a minimally acceptable
point (i.e., BATNA) in the evaluation phase, outcomes and eval-
uations can become reconnected rather than disconnected, with
better outcomes producing higher levels of satisfaction. Thus, not
only do we demonstrate a disconnection between negotiated out-
comes and evaluations, we also explore mechanisms for their
reconnection. Which focal point is attended to, and when, deter-
Adam D. Galinsky and Victoria Husted Medvec, Department of Man-
agement and Organizations, Kellogg School of Management, Northwestern
University; Thomas Mussweiler, Department of Psychology, Universita¨t
Wu¨rzburg, Wu¨rzburg, Germany.
Portions of this research were presented at the annual conference of the
International Association of Conflict Management, Park City, Utah, June
2002. We are indebted to Cameron Anderson, Kristina Diekmann, Laura
Kray, Joe Magee, Don Moore, Gerardo Okhuysen, and Harris Sondak for
their helpful and insightful comments on a draft of this article.
Correspondence concerning this article should be addressed to Adam D.
Galinsky, Department of Management and Organizations, Leverone Hall,
Kellogg School of Management, Northwestern University, 2001 Sheridan
Road, Evanston, Illinois 60208. E-mail: agalinsky@northwestern.edu
Journal of Personality and Social Psychology Copyright 2002 by the American Psychological Association, Inc.
2002, Vol. 83, No. 5, 1131–1140 0022-3514/02/$5.00 DOI: 10.1037//0022-3514.83.5.1131
1131
mines whether evaluations become connected or disconnected to
the outcomes achieved in a negotiation.
Maximizing Objective Outcomes
How can negotiators achieve an advantage at the bargaining
table? What factors determine the value of negotiated outcomes?
Classic negotiation theory (Raiffa, 1982; Walton & McKersie,
1965), with its root in game theoretic bargaining models, focuses
on negotiatorslower bound,
1
such as reservation price, in pre-
dicting outcomes. Reservation price refers to the point at which the
negotiator is indifferent between reaching a settlement and walk-
ing away from the negotiation; that is, it is a minimally acceptable
point. According to these theories, negotiators should reach an
agreement when there is a positive bargaining zone, that is, when
the buyers reservation price is above the sellers reservation price
(Raiffa, 1982). Previous research has shown that manipulating the
value of negotiatorsreservation prices reliably affects outcomes
(White, Valley, Bazerman, & Neale, 1994). Other economic mod-
els, such as market models, take an aggregate approach to deter-
mining negotiated outcomes; they assume that prices will settle at
the intersection between the demand and supply curves, or the
equilibrium between the aggregate of sellers and buyers price
preferences within a market. Each of these economic models
considers factors that are unrelated to reservation prices or aggre-
gated market equilibrium to be irrelevant to predicting settlement
prices.
In marked contrast to this assumption, however, negotiation
processes and outcomes depend heavily on which goals and stan-
dards are made salient before, during, and after the negotiation. For
example, a recent set of studies showed that the final outcome in
a distributive negotiation depends largely on whether the buyer or
the seller is allowed to introduce a standard by making the first
offer: When a buyer made the first offer the final settlement price
was lower than when the seller made the first offer (Galinsky &
Mussweiler, 2001). First offers serve as anchors to which the final
settlement price is assimilated.
In many domains, the goals that one sets have reliable effects on
performance. Specific and challenging goals improve task perfor-
mance compared with vague goals such as do your bestby
increasing both effort and persistence; as the difficulty of the goal
increases, so does performance, even when the goals are set
extremely high (Locke & Latham, 1990). The fact that goals affect
performance on a wide range of tasks, from the mental to the
physical, suggests that the goals negotiators set may affect nego-
tiated outcomes. In fact, prior research has demonstrated that ones
goals in a negotiation can have strong effects on the negotiated
outcome (Blount, Thomas-Hunt, & Neale, 1996; White & Neale,
1994). White and Neale (1994), for example, found that in the
presence of a stable bargaining zone, manipulating the negotiators
target prices significantly affected settlement prices; specifically,
giving negotiators higher target prices improved their perfor-
mance. Negotiators who focus on their target price can also over-
come the anchoring effect of their opponents first offer (Galinsky
& Mussweiler, 2001).
These findings make clear that focusing on a high goal or
standard (e.g., a sellers first offer, a high target) produces a higher
outcome than does focusing on a low goal or standard (e.g., a
buyers first offer, a low target). Contrary to traditional economic
models of bargaining, the objective outcomes of negotiation often
depend on what goals and standards are made salient in the
negotiation situation.
Although prior research examining the effects of goals in the
negotiation domain has simultaneously manipulated the values of
the negotiatorsreservation prices and target prices (White et al.,
1994), it has not manipulated on which point, either their lower
bound or their target prices, negotiators focused. Although it is
clear that the extremity of a negotiators target price can affect his
or her outcome, it remains unclear whether simply focusing on
ones target price rather than on ones lower bound, a minimally
acceptable point, affects a negotiators outcomes in a positive
direction. We predicted that having a negotiator focus on his or her
target price for the negotiation would serve as a motivating and
challenging goal and ultimately lead to more beneficial outcomes,
compared with having a negotiator focus on his or her lower
bound. To this end, we manipulated whether one of the negotiators
in a dyad focused on his or her target price or on his or her lower
bound.
Disconnecting Outcomes and Evaluations
How are outcomes and evaluations connected? One might ex-
pect that the more a person gets in a negotiation, the better he or
she feels about it. Are evaluations indeed primarily determined by
the objective outcomes one has achieved? Do negotiation strate-
gies that lead one to achieve an objectively better outcome also
increase ones satisfaction? To answer these questions about the
relation between objective outcomes and evaluations of those
outcomes, one has to examine the processes that underlie the
generation of evaluations of negotiated agreements.
Although the negotiation literature has almost exclusively fo-
cused on objective outcomes (Thompson, 1990) and has frequently
overlooked subjective concerns (for an exception, see Clyman &
Tripp, 2000), the social judgment literature has dealt extensively
with the construction of subjective evaluations (for an overview,
see Eiser, 1990). One core principle that emerges from this liter-
ature is that every evaluation is relative or comparative in nature.
To decide whether a given outcome is good or bad, satisfying or
frustrating, one has to compare it with a pertinent norm or stan-
dard. Whether an increase in salary, for example, is reason for
elation or distress depends not only on its absolute magnitude but
also on its relative qualities. One may be very content about having
negotiated a 10% raise if one learns that a colleague only got a 5%
raise but be bitterly disappointed if that colleague received a 15%
raise. Not only does the evaluation of an objective outcome depend
heavily on comparison with a salient standard, but the evaluative
effect of a salient standard of comparison is typically contrastive in
nature (Kahneman, 1992; Kahneman & Tversky, 1979). That is,
considering a high standard typically leads to less favorable eval-
uations of an objective outcome than does considering a low
standard.
1
For buyers, the lower bound is the maximum price they are willing to
pay for an item; this means that a buyers target price is lower than his or
her reservation price, whereas a sellers target price is higher than his or her
reservation price. Thus, reservation price refers to the minimum (for the
seller) or maximum (for the buyer) acceptable settlement price within the
current negotiation.
1132 GALINSKY, MUSSWEILER, AND MEDVEC
Empirical evidence supports the notion that comparisons may
play a more important role in determining evaluations of negoti-
ated outcomes than the economic value of those outcomes (Galin-
sky, Seiden, Kim, & Medvec, 2002; Loewenstein, Thompson, &
Bazerman, 1989; Thompson, 1995). People evaluate their negoti-
ated outcomes using not only absolute payoffs but interpersonal
comparisons as well; perceived relative gain, the comparison of
ones own outcomes with those of the other party, is often a more
important predictor of satisfaction than is the absolute value of the
negotiated outcome (Loewenstein et al., 1989). Similarly, the
affect of ones opponent produces contrastive effects on ones own
satisfaction (Thompson, Valley, & Kramer, 1995). Furthermore,
individuals also use intrapersonal comparisons with a salient
reference point in determining their evaluations of negotiated
outcomes (Thompson, 1995). Deviations from expected outcomes
are a more powerful predictor of satisfaction than are the actual
objective outcomes that negotiators achieve (Oliver, Balakrishnan,
& Barry, 1994). Intrapersonal comparisons can sometimes lead to
a systematic disconnection between the objective value of an
outcome and evaluations of that outcome. Medvec, Madey, and
Gilovich (1995) found that counterfactual thoughts can lead those
who perform objectively better to feel worse than those whom they
outperform (see also Galinsky et al., 2002). They found that
Olympic athletes who won silver medals were rated as appearing
less satisfied than were athletes who won the bronze, despite the
better objective finish for the silver medalists.
The above analysis makes clear that both objective outcomes
and subjective evaluations appear to depend on salient focal points.
It is important to note that the direction of influence goes in
opposite directions for outcomes and evaluations. Whereas the
value of an outcome is typically assimilated toward (i.e., becomes
more consistent with) a salient focal point, evaluations are typi-
cally contrasted away from (i.e., become less consistent with) a
salient focal point. Thus, to the extent that negotiators focus on the
same goal or standard during the negotiation process and during
the postnegotiation evaluation phase, the same focal point may
have divergent effects on objective outcomes and evaluations. This
notion that negotiator focus can have contradictory effects on
outcomes and evaluations is supported by evidence that when the
values of reservation prices and target prices are simultaneously
manipulated, reservation price is a better predictor of objective
outcomes than is target price (White et al., 1994), but target price
is a better predictor of evaluations than is reservation price
(Thompson, 1995). It should be noted that previous research has
not compared the differential impact of negotiator focus on both
outcomes and evaluations in the same experiment and that the
Thompson experiments only involved perceptions of negotiator
satisfaction in hypothetical negotiations. It leaves open the ques-
tion of whether the same behavior by a negotiator (focusing on a
target price) could produce both high objective outcomes and low
satisfaction.
The research on goal setting supports this hypothesis. Moss-
holder (1980) was one of the first to observe a disconnection
between outcomes and evaluations: Being assigned a high goal
tended to increase task performance but decrease task satisfaction.
This result suggests that goals can sometimes undermine intrinsic
task satisfaction, similar to the way that rewards can undermine
intrinsic motivation (Lepper, Greene, & Nisbett, 1973). Mento,
Locke, and Klein (1992) found that the extremity of goal setting
was inversely related to satisfaction with expected outcomes, and
Garland (1983) found evidence that improved performance caused
by choosing or being assigned high goals led to decreases in
satisfaction with that performance. Similarly, comparing oneself
with a high goal can improve performance on an intellectual task
but leave one questioning ones overall intelligence (Mussweiler &
Strack, 2000a).
The above research suggests that extreme goals can often lead to
a systematic disconnection between objective outcomes and satis-
faction. It should be noted that all of the above research has been
conducted on individually based tasks. A participant gets assigned
a high or low goal, then performs a simple task (e.g., an anagram
task). In the present experiments, performance is not autonomous.
Because the negotiations in the present experiments are distribu-
tive in nature, outcomes are zero sum; more for one negotiator
necessitates less for the other negotiator. Thus, the negotiators who
are focused on their target prices have to convince their opponents
to accept a less favorable outcome. In addition, in competitive
social interaction there are a number of variables other than focal
points that may determine levels of satisfaction. For example,
negotiators may focus on their opponents affect to determine their
satisfaction (Thompson et al., 1995), and this random variance
may override any systematic effect of focal points on satisfaction.
Because outcomes are contingent on mutual agreement, focusing
on ones target price may lead neither to better outcomes nor to
feelings of dissatisfaction. The disconnection between objective
outcomes and satisfaction may not emerge in competitive social
interaction.
In three experiments, we examine whether a disconnection
between outcomes and evaluations exists in negotiations: Within a
negotiation, does focusing on ones target price lead to better
objective outcomes but less satisfaction with these outcomes than
does focusing on a minimally acceptable point? We predicted that
having negotiators focus on their target price would serve to
improve outcomes but to decrease satisfaction compared with
having them focus on their reservation price or BATNA.
However, in the final experiment we demonstrate that negotia-
tors can harness the differential effects of negotiator focal points to
their advantage, thereby allowing outcomes and evaluations to
become reconnected, with superior outcomes producing higher
levels of satisfaction. By focusing on their target prices before and
during the negotiation, negotiators can take advantage of the
motivating effects of ambitious goals and achieve objectively
superior outcomes. By focusing on their BATNAs after the nego-
tiation, negotiators can take advantage of the contrastive compo-
nent of evaluative standards and feel satisfied with their outcomes.
Previous research has not investigated the possibility that out-
comes and evaluations, once disconnected, may become recon-
nected through the introduction of an alternative focal point.
Experiment 1
Method
Participants and design. Participants were 62 masters of business
administration (MBA) students at Northwestern University who were
enrolled in a course on negotiations. The experiment was conducted in the
2nd week of the course. Thirty-one dyads took part in the negotiation. The
experiment had a 2 (negotiator focus: target price vs. reservation price) 2
1133
DISCONNECTING OUTCOMES AND EVALUATIONS
(negotiated outcome vs. satisfaction) mixed design with repeated measures
on the second factor
Procedure and stimulus materials. The experiment was conducted as a
class exercise. Each negotiating dyad comprised a candidate and a re-
cruiter. The recruiter represented CLB, an internationally renowned con-
sulting firm located in New York. The candidate had already received an
offer of employment from CLB, and most of the job package had already
been negotiated, including salary, starting date, and benefits. The only
remaining issue was the signing bonus.
Candidates were told that they were 2nd-year MBA students from a
prestigious university and that they already possessed a job offer from
another well-respected consulting firm in Boston. The bonus was empha-
sized as being extremely important to the candidate. For one, the candi-
dates spouse preferred to live in Boston, and, thus, the candidate needed
some compensation to go to New York. Second, the candidate and his or
her spouse were burned out after business school and wanted to take an
extended, luxurious vacation. The bonus that the Boston firm offered the
candidate was only $5,000, but the candidate had heard that bonuses of up
to $30,000 had been offered to others in the consulting field. The candi-
dates spouse had agreed to come to New York only if the bonus from CLB
was big enough to allow the European vacation. Candidates needed to get
a bonus of at least $10,000 to make this happen, but that minimum bonus
would not leave the spouse very excited. The last line of the role read,
You remember your spouses last words on the phone: Get me to the
Riviera and I will put up with New York.’”
The director of personnel with whom the candidate was negotiating was
told that the firm was only hiring one recruit this year and that all the issues
with the candidate had been finalized except the signing bonus. The
director was told that under no circumstances could he or she offer a bonus
of more than $20,000 (because, participants were told, that was the highest
bonus the firm had ever paid) but that the firm would prefer to pay $5,000.
The candidate had a reservation price of $10,000 and a target of $30,000,
whereas the director of personnel had a reservation price of $20,000 and a
target of $5,000. Thus, the bargaining zone (the distance between the two
negotiatorsreservation prices) was $10,000. But note that the target price
for each negotiator fell beyond his or her opponents reservation price.
Focusing on ones target could lead to an impasse, because that target
would be beyond his or her opponents reservation price.
The candidates role was manipulated. The first page of the candidates
role information was entitled Important Preparation Information.For the
half of the candidates who were randomly assigned to the target condition,
these instructions read, It is important to focus on the ideal bonus you
could get.For the other half of the candidates, who were assigned to the
reservation price condition, these instructions read, It is important to focus
on the point on which you will walk away from this negotiation.After
participants completed the negotiation, they were given a postnegotiation
form. First, participants were asked to write down the final bonus amount
that the two parties agreed to. Next, participants were asked to rate their
satisfaction with the outcome on a 7-point scale ranging from not satisfied
(1) to very satisfied (7).
Results and Discussion
Thirty-five percent (11 dyads) of the negotiations ended in
impasse. Dyads in which the candidate focused on his or her target
price tended to be more likely to reach an impasse (7 dyads) than
were dyads in which the candidate focused on his or her reserva-
tion price (4 dyads), although this difference was not significant,
2
(1, N31) 1.00.
For those candidates who were hired and received a bonus (i.e.,
reached an agreement), analyses were run on the amount of the
bonus and levels of satisfaction. To compare the objective outcome
and the evaluations of that outcome, we transformed the amount of
the bonus and the satisfaction ratings to zscores. The zscores were
submitted to a 2 (negotiator focus: target price vs. reservation
price) 2 (bonus vs. satisfaction) mixed model analysis of vari-
ance (ANOVA) with repeated measures on the second factor. The
only significant effect was the predicted Condition Repeated
Measures interaction, F(1, 18) 4.89, p.04. Candidates who
focused on their target price, the ideal bonus they could get, agreed
to a higher bonus (M$16,275.00, SD $3,790.43) than did
candidates who focused on their reservation price, the point at
which they would walk away from the negotiation (M
$14,400.00, SD $3,044.12). However, candidates who focused
on their target price felt less satisfied with their objectively supe-
rior outcomes (M3.60, SD 1.26) than did candidates who
focused on their reservation price (M4.40, SD 1.08). The
pattern of data supports our hypothesis that negotiator focus would
lead to a disconnection between objective outcomes and their
evaluations. Negotiators who focused on their targets achieved
objectively superior outcomes but were left dissatisfied with these
outcomes. Although the pattern of data supports our hypotheses,
the individual comparisons for both the objective outcomes (i.e.,
amount of bonus), F(1, 18) 1.49, p.24, and the satisfaction
ratings, F(1, 18) 2.32, p.15, were not significant.
One reason for the high impasse rate and the lack of strength of
the data might be that the stated aspirations of the candidate were
far removed from the reservation price of the recruiter (in addition
to the fact that the candidates BATNA was good). Candidates
were told that bonuses as high as $30,000 had been achieved by
others in the consulting field, whereas recruiters were told that no
one in their firm had ever received a signing bonus of more than
$20,000; the candidatestarget price (and believed market possi-
bilities and parameters) was outside the reservation price of re-
cruiters. It is not surprising that giving negotiators a target value
that fell outside their opponents reservation price resulted in
impasses. White and Neale (1994) found just such an effect and
declared that the relationship between a negotiators target price
and an opponents reservation price can increase impasses even in
the case of a positive bargaining zone, which they declared was a
source of bargaining inefficiency. Another potential reason for the
relatively low overall satisfaction ratings in the current study is
that many of the negotiators in the study were currently going
through the MBA job market. Their expectations coming into the
negotiation could have influenced their levels of satisfaction.
Given the high rate of impasse and the familiarity with the nego-
tiation issue, it is not surprising that, overall, there were relatively
low levels of satisfaction with outcomes.
Experiment 2
We conducted a second experiment that attempted to deal with
a number of our concerns with, and to extend the results of, the
first experiment. We chose as a negotiation topic the selling of a
pharmaceutical plant, one with which the negotiators in the study
would have little familiarity and few prior expectations. We also
did not provide the negotiators with specific values for their target
prices because we wanted to confirm the generalizability of the
effect to situations in which target prices are not exogenously
provided but are self-generated. We also used a different instan-
tiation of a negotiators lower bound (i.e., BATNA). White and
Neale (1991) considered a BATNA to be similar to a reservation
1134 GALINSKY, MUSSWEILER, AND MEDVEC
price, with the differences stemming from the possible transaction
costs and uncertainty of moving to ones BATNA. In addition,
according to classic negotiation theory (Raiffa, 1982), negotiators
should use their BATNA to set their reservation prices; a BATNA
helps determine when a negotiator should walk away from the
bargaining table. Finally, we also had the focal negotiator record
his or her first offer (regardless of whether this offer came first or
was the first counteroffer). We consider opening offers to be a
useful proxy for the value of the negotiators goal. We predicted
that focusing on ones target price should lead to more extreme
opening offers, resulting in objectively superior outcomes, com-
pared with focusing on ones BATNA (Galinsky & Mussweiler,
2001).
Method
Participants and design. Participants were 56 MBA students at North-
western University who were enrolled in a course on negotiations. The
experiment was conducted in the 1st week of the course. Twenty-eight
dyads took part in the negotiation. The experiment had a 2 (negotiator
focus: target price vs. BATNA) 2 (negotiated outcome vs. satisfaction)
mixed design with repeated measures on the second factor
Procedure and stimulus materials. The negotiation involved the pur-
chase of a pharmaceutical plant. Both the buyer and the seller were given
the same general information. They were told that the plant for sale was
located in an area that contained many start-up biotechnology firms and an
experienced but highly mobile work force. Both negotiators were told that
the seller purchased the plant 3 years ago for $15 million, which was below
market value because the company that the seller had purchased the plant
from was in bankruptcy. Both negotiators were also told that the plant was
appraised 2 years ago for $19 million. They were further informed that the
local real estate market had declined 5% since then but that the plant was
a unique property and, thus, general real estate trends may not apply. In
addition, they were told that a plant similar to this plant had sold for $26
million.
Participants in the role of the buyer were informed that they were the
chief financial officer of the company in need of a new plant to manufac-
ture a line of a highly specialized compounds and that one of the compa-
nys existing plants could not be modified. The buyer was told that the
potential plant had a number of advantages and disadvantages. The advan-
tages included that the plant was up and running, had Food and Drug
Administration (FDA) approval, and had a highly educated and well-
trained work force, if these individuals could be retained. The major
disadvantage was that the plant was quite a distance from the companys
headquarters and research and development facility.
Buyers were given a BATNA of building a new plant at a cost of $25
million. This new plant would take a year to be fully operational (including
FDA approval) and would be close to headquarters.
Sellers were told that they were selling the plant because the company
they represented was phasing out the product line that the plant produced.
The sellers were also given a BATNA. They were told that the main
alternative to this negotiation would be to strip the plant and sell the
equipment separately. The projected profit would be $17 million if the
plant were stripped.
The role of the buyer was manipulated. The manipulation occurred on
the second page of the role information, in between the general information
page and the confidential role information for the buyer. For the half of the
buyers who were randomly assigned to the target condition, the instructions
read, When preparing your negotiation it is important to think about and
focus on your target, the ideal price you could pay.For the other half of
the participants, who were assigned to the BATNA condition, these in-
structions read, When preparing your negotiation it is important to think
about and focus on other potential alternatives that you have to this
negotiated agreement. A clear understanding of these alternatives helps you
determine when you should walk away from a negotiation.After partic-
ipants completed the negotiation, they were given a postnegotiation form.
Although we did not manipulate which member of the dyad made the
opening offer, the first question asked participants what their opening offer
had been. Next, participants were asked to write down the outcome of the
negotiation. Finally, participants were asked to rate their satisfaction with
the outcome on a 7-point scale ranging from not satisfied (1) to very
satisfied (7).
Results and Discussion
All negotiating dyads reached an agreement. To compare the
objective outcomes and the evaluations of these outcomes, we
transformed the purchase price and the satisfaction ratings into z
scores. Because a lower purchase price represented a better out-
come for the buyer, we multiplied the transformed purchase price
zscores by 1 so that a higher number would represent a better
outcome. The zscores were submitted to a 2 (negotiator focus:
target price vs. BATNA) 2 (bonus vs. satisfaction) mixed model
ANOVA with repeated measures on the second factor. The only
significant effect was the predicted Condition Repeated Factor
interaction, F(1, 26) 7.53, p.01. Buyers who focused on their
target price agreed to a lower purchase price (M$20.24 million,
SD $2.14 million) than did buyers who focused on their
BATNA (M$22.14 million, SD $2.78 million), F(1,
26) 4.12, p.05. However, buyers who focused on their target
price (M5.29, SD 1.07) felt less satisfied with their objec-
tively superior outcomes than did buyers who focused on their
BATNA (M6.07, SD .92), F(1, 26) 4.36, p.05. The
reported first offers were also analyzed. Buyers who focused on
their target price reported making more extreme first offers (M
$15.98 million, SD $3.57 million) than did buyers who focused
on their BATNA (M$20.18 million, SD $3.77 million), F(1,
25) 8.78, p.01.
2
Buyersfirst offers were positively correlated with final price,
r(25) .73, p.001, and negatively correlated with buyers
satisfaction, r(25) ⫽⫺.42, p.03. Lower first offers, ones more
advantageous to the buyer, led to more superior outcomes but
inferior evaluations. Because of these correlations, the repeated
measures ANOVA between negotiator focus and purchase price/
satisfaction was reconducted with reported first offer covaried out.
Covarying out the effect of reported first offers eliminated the
significant interaction, F1.00. In addition, separate analyses of
covariance were conducted across the experimental conditions for
purchase price and satisfaction. Covarying out reported first offer
eliminated the significant effects of the experimental condition on
both purchase price, F1.00, and satisfaction, F(1, 24) 1.40,
p.25.
A difference score between buyersfirst offers and their final
purchase price was computed. Although buyers who focused on
their target price got objectively superior outcomes, they showed a
larger difference between their reported first offers and the final
purchase price (M$4.39 million, SD $2.93 million) com-
pared with buyers who focused on their BATNA (M $1.96
million, SD $2.46 million), F(1, 25) 5.46, p.03. In
2
One participant did not report his final offer, and thus the degrees of
freedom are lower for analyses involving first offers.
1135
DISCONNECTING OUTCOMES AND EVALUATIONS
addition, this difference score showed a marginal correlation with
the satisfaction ratings, r(27) .37, p.06.
Buyers who focused on their target price made lower, more
advantageous first offers, which then produced better objective
outcomes, compared with buyers who focused on their BATNA.
First offers can be seen as an instantiation of negotiator focus and
as a proxy for the value of the focal points. More aggressive first
offers resulted in better outcomes, but because negotiators had to
move more from their reported first offer (and away from their
target price), they were less satisfied than were those negotiators
who focused on their BATNA. These effects occurred even though
target prices were self-generated rather than exogenously pro-
vided, as in Experiment 1.
Experiment 3
Across two experiments, we have found that focusing on ones
target price increased objective outcomes but decreased satisfac-
tion with those outcomes. The next experiment was conducted for
a number of reasons. First, we wanted to replicate the pattern of
data from the first two experiments to provide more evidence for
a systematic disconnection between outcomes and evaluations.
Second, we manipulated the sellers role to ensure that the results
were not role specific. Third, it could be claimed in Experiment 2
that having participants write down their first offers along with
their final outcomes may have led participants to believe that they
shouldfeel dissatisfied. And there is evidence that participants
use questionnaire format, from response scales to question order,
to infer implicitly the researchers intention (Schwarz, 1999). To
diminish the possibility that asking participants to write down their
first offers confounds the results, in the next experiment we elim-
inated the question regarding opening offers from the postnego-
tiation questionnaire.
Finally, we wanted to see whether having negotiators focus on
their BATNA after the negotiation could eliminate the decrements
in satisfaction caused by focusing on ones target. Half the partic-
ipants, after the negotiation but before they answered the satisfac-
tion measure, were asked to write down what their main alternative
to this negotiation was. We expected that having negotiators focus
on their target before and during the negotiation but then identify
their BATNA after the negotiation would lead to better objective
outcomes without decrements in satisfaction, increasing the pos-
sibility that satisfaction would become connected rather than dis-
connected to outcomes.
Method
Participants and design. Participants were 74 MBA students at North-
western University who were enrolled in a course on negotiations. The
experiment was conducted in the 1st week of the course. Thirty-seven
dyads took part in the negotiation, and the role of the sellers was manip-
ulated. The experiment had a 2 (negotiator focus: target price vs. reserva-
tion price) 2 (postnegotiation BATNA question: was asked vs. was not
asked) 2 (negotiated outcome vs. satisfaction) mixed design with re-
peated measures on the third factor.
Procedure and stimulus materials. The experiment was conducted as a
class exercise. The same roles that were used in Experiment 2 were used
in this negotiation, except this time the role of the seller was manipulated.
Half of the sellers were told to focus on their target price, the ideal price
they would like to receive for their plant, and the other half of the sellers
were told to focus on their BATNA. After participants completed the
negotiation, they were given a postnegotiation form. First, participants
were asked to record the outcome for their negotiation. Then half of the
participants were asked, What was your best alternative to this negotiated
agreementthe best price you could have gotten outside of this agree-
ment? In negotiation terms this is referred to as a BATNA.These
participants were next asked to rate their satisfaction with the outcome on
a 7-point scale ranging from not satisfied (1) to very satisfied (7). The other
half of the participants answered the satisfaction question immediately
after reporting their outcome without listing their BATNA.
Results and Discussion
All negotiating dyads reached an agreement. To compare the
objective outcome and the subjective evaluations of that outcome,
we transformed the purchase price and the satisfaction ratings into
zscores. The zscores were submitted to a 2 (negotiator focus:
target price vs. reservation price) 2 (postnegotiation BATNA
question: was asked vs. was not asked) 2 (outcome vs. satis-
faction) mixed design with repeated measures on the third factor.
A Focus Repeated Measures interaction, F(1, 33) 9.70, p
.01, was qualified by a significant three-way interaction, F(1,
33) 4.75, p.04 (see Table 1). Separate two-way interactions
between negotiator focus and whether the BATNA question was
asked were conducted on selling price and satisfaction. For selling
price, only a marginal effect for negotiator focus was found, F(1,
33) 3.51, p.07. Sellers who focused on their target price
(M$23.18 million, SD $2.55 million) sold the plant for a
higher price than did sellers who focused on their BATNA (M
$21.65 million, SD $2.42 million). For satisfaction, two main
effects were qualified by a significant interaction, F(1, 33) 7.21,
p.01. For sellers not asked the BATNA question, those who
focused on their target price (M4.87, SD 0.64) were less
satisfied than were those sellers who focused on their BATNA
(M6.00, SD 0.67), F(1, 16) 13.09, p.01, replicating the
results from Experiment 2. For sellers who were asked the
BATNA question before the satisfaction question, however, the
results were quite different: Sellers were as satisfied regardless of
Table 1
Outcomes and Satisfaction by Negotiator Focus and Whether BATNA Question Was Asked
Negotiator focus
No BATNA question BATNA question
Target BATNA Target BATNA
Outcome 22.75 (1.77) 21.15 (2.08) 23.61 (3.21) 22.10 (2.71)
Satisfaction 4.87 (0.64) 6.00 (0.67) 6.13 (0.83) 5.91 (0.83)
Note. Outcomes are in millions of dollars. Standard deviations are in parentheses. BATNA best alternative
to a negotiated agreement.
1136 GALINSKY, MUSSWEILER, AND MEDVEC
whether they focused on their target price (M6.13, SD .83)
or their BATNA (M5.91, SD 0.83), F1.00.
In addition, the two-way interactions reported in the first two
experiments emerged for those sellers not reminded about their
BATNA, F(1, 16) 14.09, p.01, but were not significant for
participants who were asked about their BATNA, F1.00.
Finally, for sellers who focused on their target price but were
asked about their BATNA following the negotiation, there was a
positive correlation between outcomes and satisfaction, r(8) .66.
In contrast, for those target-focused sellers not asked about their
BATNA, there was a negative correlation between outcomes and
satisfaction, r(8) ⫽⫺.22, and the difference between these corre-
lations was marginally significant, z1.61, p.06, one-tailed.
Introducing an opposing focal point enabled objective outcomes to
be connected rather than disconnected to satisfaction.
For those negotiators not asked about their BATNA in the
postnegotiation measure, the results replicated those of the first
two experiments: Focusing on ones target price increased the
value of the negotiated outcome but decreased satisfaction with
that outcome, compared with focusing on ones BATNA. How-
ever, when an alternative focal point (i.e., BATNA) was made
salient following the negotiation, the negative effects on satisfac-
tion of focusing on ones target before and during the negotiation
disappeared. Focusing on a target price before and during the
negotiation while focusing on ones lower bound after the nego-
tiation can allow objective outcomes to be connected rather than
disconnected to satisfaction.
General Discussion
Across three experiments, we found a systematic disconnection
between objective outcomes and evaluations of those outcomes.
We have demonstrated for the first time in actual negotiations the
effect of focal points on evaluations as well as a systematic
disconnection between outcomes and evaluations. In the present
experiments, the increases in outcomes and decreases in satisfac-
tion were the result of the same behavior: negotiator focus. Nego-
tiators who focused on their target price procured more positive
outcomes but incurred more negative evaluations than did negoti-
ators who focused on their lower bound in the negotiation, whether
it was reservation prices or BATNAs. Negotiator focal points serve
as goals before a negotiation but serve as evaluative standards after
the negotiation. High goals increase performance (Locke &
Latham, 1990), but high standards decrease satisfaction.
The effect of negotiator focus on outcomes was quite robust
despite the fact that only one of the negotiators roles was manip-
ulated in a situation in which outcomes were contingent on mutual
agreement. The consistent impact of negotiator focus on outcomes
across the three experiments is thus all the more remarkable. In
addition, the disconnection occurred regardless of whether the
target prices were exogenously provided (Experiment 1) or were
self-generated (Experiments 2 and 3), suggesting the robustness of
the effect.
It should be noted that the contrast effects we obtained on
participantssatisfaction ratings concur with peoples naive theo-
ries about how people feel in a situation in which they do not
obtain a given goal (e.g., Heath, Larrick, & Wu, 1999). This might
imply that participants were constructing judgments consistent
with naive theories without necessarily experiencing the full
weight of their expressed dissatisfaction. The fact that similar
contrastive consequences also hold in other paradigms in which
the connection between a comparison standard and the outcome is
less obvious (e.g., Mussweiler & Strack, 2000a) suggests that the
critical ratings reflect an actual decrease in participantssatisfac-
tion with their obtained outcome.
Achieving Objectively Superior Outcomes
One question that emerges from the present research concerns
the processes that underlie the achievement of superior outcomes
by target-focused negotiators. The numerical value of the outcome
is clearly assimilated, in a statistical sense, to the salient focal
point: High and aggressive focal pointstarget priceslead to
more favorable outcomes. Negotiator focal points attended to
before the negotiation serve as goals, and high goals increase
performance compared with low goals (Locke & Latham, 1990).
But what psychological mechanisms are responsible for this ef-
fect? There are a number of processes that can contribute to the
positive relationship between focal points and negotiated out-
comes. First, negotiator focal points (and goals, more generally)
can serve as anchors that help to selectively recruit information
that is consistent with that anchor (Mussweiler & Strack, 2000b).
It has been demonstrated that exposure to a judgmental anchor
selectively increases the accessibility of anchor-consistent knowl-
edge about the target (e.g., Mussweiler & Strack, 1999, 2000b). In
the realm of negotiation, this suggests that an individual who is
selling a car and is focused on a high anchor value (e.g., a target
price) has semantic knowledge consistent with high prices (e.g.,
luxury features, reliability, low mileage) made selectively more
accessible. This knowledge will help when the seller attempts to
persuade the buyer to accept a high price for the car (Galinsky &
Mussweiler, 2001). Negotiator focus also influenced the extremity
of participantsfirst offer in the negotiations: Target-focused ne-
gotiators made more advantageous first offers than did BATNA-
focused negotiators. Because anchors have a positive influence on
estimates of numerical values, the construction of a first offer is
affected by and assimilated to the point (i.e., target vs. BATNA) on
which negotiators are focused. In addition, first offers have a
powerful, assimilative influence on outcomes by affecting the
counteroffers an opponent makes; that is, ones first offer anchors
an opponents counteroffers, partly by activating information con-
sistent with that first offer in ones opponent (Galinsky & Muss-
weiler, 2001). The selective accessibility of anchor-consistent
knowledge, the assimilative effect of focal points on first offers,
and the assimilative effect of first offers on counteroffers and
outcomes suggest that the underlying cognitive processes that
contribute to the superior performance of target-based negotiators
are assimilative in nature.
An additional mechanism, however, is contrastive in nature. It
has been suggested that goals can be considered to be reference
points that are used to divide outcomes into regions of desirable
outcomes (i.e., gains or successes) and undesirable outcomes (i.e.,
losses or failures; Heath et al., 1999; Kahneman, 1992; Kahneman
& Tversky, 1979). Heath et al. argued that goals can function like
reference points and thus serve as evaluative standards, not only
after performance has occurred but also before and during perfor-
mance. That is, negotiators may evaluate the marginal benefit of
making or receiving a particular concession by comparing it with
1137
DISCONNECTING OUTCOMES AND EVALUATIONS
an accessible focal point. High goals are motivating because they
place many potential outcomes in the domains of losses, which
result in both loss aversion and heightened sensitivity to conces-
sions near but below the high goal (i.e., target price). Heath et al.
argued that goals increase performance by changing how each
performance point (e.g., proposed settlement) is evaluated. Here,
reference points change motivation by altering value, a contrastive
effect. High goals lead negotiators to perceive each of their own
concessions as more painful and each concession by their oppo-
nent above their reservation price as more valuable than do low
goals. The value functionseparation of outcomes into gains and
lossesof reference points can increase performance and decrease
satisfaction through the same contrastive mechanism.
The above analysis suggests that focal points can have a positive
influence on negotiated outcomes through both assimilative and
contrastive mechanisms. In fact, it is precisely because focal points
can increase performance through the assimilative effect of an-
chors and the contrastive effect of the value function of reference
points that makes their effect on outcomes so powerful. Despite the
fact that a negotiators performance depended on securing agree-
ment from the opponent (which seems to decrease the probability
of finding an effect of goals on outcomes), negotiator focus had a
consistent effect on outcomes.
The Disconnection of Outcomes and Evaluations
In the present experiments, negotiator focus first affected out-
comes and only later affected evaluations, but concerns over
satisfaction can also lead to decreases in objective outcomes. For
example, responders in ultimatum games may reject profitable
offers because of accusations of unfairness, because of anger, and
even out of spite (Pillutla & Murnighan, 1996). Spite is an emotion
that, by definition, increases satisfaction, but at a cost to objective
outcomes.
An improvement in satisfaction at an objective cost also occurs
when individuals choose to negotiate with acquaintances rather
than strangers. Although negotiators often prefer to negotiate with
those they know because it increases their satisfaction with the
exchange, relationship ties can lead to bargaining inefficiencies
(Tenbrunsel, Wade-Benzoni, Moag, & Bazerman, 1998). Pro-
cesses that increase outcomes can decrease evaluations, and con-
cerns with expected satisfaction can undermine objective out-
comes, suggesting that a one-to-one mapping between objective
outcomes and evaluations of those outcomes is less typical than
economic models predict.
Negotiator focus led to a systematic disconnection between
outcomes and evaluations in the present experiments. Other mech-
anisms can also lead to a similar disconnection. The activation of
counterfactual thoughts, for example, often causes outcomes and
evaluations to become disconnected (Galinsky et al., 2002; Med-
vec et al., 1995; Medvec & Savitsky, 1997). Galinsky et al. (2002)
found that the immediate acceptance of a negotiators first offer, an
atypical negotiation sequence but one that results in higher objec-
tive outcomes, activated counterfactual thoughts that led to de-
creased levels of satisfaction. Thinking about what might have
been can lead people to be blind to the riches they have achieved.
The disconnection between outcomes and evaluations also
raises questions over the future consequences of this disconnec-
tion. The activation of counterfactual thoughts, for example, can
have both functional and dysfunctional consequences for future
behavior (Galinsky et al., 2002; Roese, 1994). In a negotiation
context, counterfactual thoughts lead negotiators to spend more
time preparing for a subsequent negotiation, a functional effect.
But when a negotiators first offer is immediately accepted, he or
she becomes less inclined to want to make a first offer in the future
(Galinsky et al., 2002), despite the fact that making the first offer
affords negotiators a powerful bargaining tool (Galinsky & Muss-
weiler, 2001). What might be the effects of procuring beneficial
outcomes but incurring distressing evaluations? Does this lead to
self-destructive behavior? If negotiators base the choice between
different strategies (focusing on ones BATNA vs. focusing on
ones target price) not on their objective outcomes but rather on
their evaluations of the negotiated outcomeswhich is likely to be
the casethen in the future they may be more likely to select those
strategies that produce worse objective outcomes, such as focusing
on minimally acceptable points.
Even if negotiators do not abandon ship at the first sign of
dissatisfaction and continue to focus on target prices, dissatisfac-
tion may be a persistent problem. Although a target-focused ne-
gotiator may, over time, obtain profitable outcomes and an ever-
increasing state of objective wealth, that negotiator may not be
able to appreciate the rewards gained. This state of dissatisfaction
despite increases in overall wealth is not unlike the hedonic tread-
mill, in which adaptation to improving circumstance prevents
individuals from appreciating advances in objective wealth (Brick-
man & Campbell, 1971). Adaptation to any circumstance dramat-
ically reduces variance in evaluations, resulting in such surprising
findings as the fact that lottery winners end up being only mar-
ginally happier than paraplegics (Brickman, Coates, & Janoff-
Bulman, 1978). Through adaptation, objective gains may fail to get
translated into enduring increases in overall satisfaction. Adapta-
tion and the hedonic treadmill, like reference points and counter-
factual thoughts, can conspire to keep outcomes and evaluations
perpetually disconnected.
Our third experiment points to a way out of this predicament.
Focusing on their target price before and during the course of a
negotiation and then focusing on their lower bound after the
negotiation allowed negotiators to have their cake and eat it, too:
objectively superior outcomes topped with an icing of satisfaction.
In fact, focusing on ones BATNA after the negotiation not only
increased satisfaction but also led outcomes and evaluations to be
connected rather than disconnected.
The third experiment also raises important questions over the
durability of the disconnection between evaluations and outcomes.
Is the disconnection fragile or robust, temporary or enduring? On
the one hand, negotiators may be motivated to find alternative
focal points to assuage their current pain; thus, focusing on ones
BATNA after the negotiation could be a strategy that naturally
emerges. People do seem to possess a psychological immune
system that sets off to repair their discontentment and reduce their
dissonance (Gilbert, Pinel, Wilson, Blumberg, & Wheatley, 1998;
Gilovich & Medvec, 1995). In addition, other events and informa-
tion can intercede to decrease the observed disconnection between
objective outcomes and evaluations. For example, discovering
aggregate market information or specific social comparisons with
which ones own outcome compares favorably could lead out-
comes and evaluations to become connected.
1138 GALINSKY, MUSSWEILER, AND MEDVEC
However, there is other evidence to point to the durability of this
disconnection. Medvec et al. (1995) quoted an Olympic silver
medalist who, even at the age of 91, continued to lament his
second place finish. Medvec et al. found that bronze medal win-
ners were happier than silver medalists despite their objectively
inferior outcome, not only immediately after performance but also
later, on the medal stand. Other evidence in support of the dura-
bility of the disconnection comes from the literature on cognitive
dissonance. Although dissonance is often reduced through self-
affirmation (Steele, 1988), such reduction is vulnerable to rein-
statement. If the affirmation gets invalidated in any way, then
dissonance will remerge, sometimes to a greater extent than ini-
tially experienced (Galinsky, Stone, & Cooper, 2000). In addition,
being reminded of a counterattitudinal act without the security of
consonant cognitions, such as lack of free choice, can provoke
dissonance a week later, even when no dissonance was initially
experienced (Higgins, Rhodewalt, & Zanna, 1979). Other pro-
cesses, such as adaptation, can, over time, conspire to sever a
connection between outcomes and evaluations. It may be that
whichever focal pointtarget price or BATNAis attended to
will determine the current state of negotiator satisfaction. Thus,
participants who showed a reconnection in Experiment 3 and who
were later reminded of their target price may have their dissatis-
factionand thus the disconnection between objective outcomes
and satisfactionreemerge. It is the strategic use of goals and
standards, knowing when to focus on which one, that can lead
negotiators to appreciate their objective gains.
The Dark Side of Setting High Goals
Although setting aggressive goals increases persistence, effort,
and, ultimately, performance (Locke & Latham, 1990), these goals
are not without their downsides. In the present experiments, fo-
cusing on a high goala target priceimproved objective out-
comes but left negotiators displeased with those outcomes. Simi-
larly, comparing oneself with a high goal can improve
performance on an intellectual task but leave one questioning
ones overall intelligence (Mussweiler & Strack, 2000). Although
setting high goals improves distributive outcomes, it can also
increase bargaining inefficiencies. White and Neale (1994) found
that focusing on extreme targets in a single-issue distributive
negotiation can increase impasses even when a positive bargaining
zone is present. When both negotiators set high goals and there are
integrative possibilities in a multi-issue negotiation, outcomes also
become Pareto-inefficient (Huber & Neale, 1987). Similarly, set-
ting specific, challenging goals leads negotiators to focus on the
distributive elements of a negotiation at the expense of those issues
with integrative potential (Polzer & Neale, 1995). Thus, high goals
help negotiators claim value, but they can prevent negotiators from
creating value, from expanding the pie. Negotiators with challeng-
ing goals also are less likely to incorporate new information
presented during the course of a negotiation (Polzer & Neale,
1995) and to learn from feedback about failing courses of actions
(Larrick, Heath, & Wu, 2001). In trying to reach high goals,
individuals choose riskier gambles and riskier strategies (Larrick et
al., 2001). Setting high goals can thus not only lessen satisfaction
and decrease evaluations of ones own abilities but also lead
to unwise courses of action, the inability to learn from feedback
and capitalize on new information, and, ultimately, bargaining
inefficiencies.
Conclusion
Across three experiments, a systematic disconnection between
objective outcomes and evaluations of those outcomes was ob-
served. Focusing on a target price produced superior negotiated
outcomes but lowered satisfaction with those outcomes, compared
with focusing on a lower bound or minimally acceptable point.
When the same focal point was attended to before, during, and
after the negotiation, this disconnection between outcomes and
evaluations appeared. However, when negotiators focused on tar-
get prices before and during the negotiation but used a different
focal point following the negotiation (i.e., BATNA), then out-
comes and evaluations became connected, with those who did
better also feeling better. Negotiator focus has systematic effects
on both outcomes and evaluations, and harnessing the benefits of
each type of focal point can allow negotiators to enjoy the fruits of
their successes.
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Received September 24, 2001
Revision received March 14, 2002
Accepted March 26, 2002
1140 GALINSKY, MUSSWEILER, AND MEDVEC
... Did the supplier somehow offer a price that was below your expectations, prompting you to squirm in your chair with excitement? Since it all depends on what exactly you were expecting (Galinsky, Mussweiler, & Medvec, 2002a), surprisingly positive offers come in more often than you would think. In sum, your response to the supplier's first offer should probably depend on your own reactions to the content of the offer. ...
... What if the supplier's $532, while not your dream offer, compares favorably enough to the $527 you were planning to offer, not to mention the $533 you were authorized to pay? Having received a mediocre offer, most people's temptation is to compare it against their bottom line rather than their planned first offer (Galinsky et al., 2002a). "Great, I'm clearing my bottom line by $1!" They then tend to use that comparison as a justification for avoiding any negotiation. ...
... Since we set our own expectations using a wide variety of figures-our goals, our bottom lines, random figures from the web (Galinsky et al., 2002a)-we often get first offers that sound surprisingly good. Perhaps you, the purchaser, were hoping to pay no more than $535 and fearing you'd have to pay $550, but then-voila!-the supplier came in at $532. ...
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Drawing from a wealth of negotiation research, my previous installment of Negotiating Life advised negotiators to make the first offer if they can. But sometimes they can’t. Sometimes, despite a negotiator’s best efforts, the other side moves first. In this article, I provide a framework for responding to another negotiator’s first offer, suggesting that the appropriate response varies markedly depending on the quality of the offer. This makes for a more comprehensive strategy for making and managing early offers in a negotiation.
... To supplement the negotiation field's longstanding rationalist perspective, researchers have recently become increasingly interested in social-psychological factors in negotiation (for a review, see Bazerman, Curhan, & Moore, 2001). The present study focused on negotiators' feelings of satisfaction, which can be influenced by a range of factors, including aspiration levels (Galinsky, Mussweiler, & Medvec, 2002), the timing of concessions (Kwon & Weingart, 2004), and the number of negotiation issues (Naquin, 2003). Because many factors other than the objective terms of the deal can influence negotiator satisfaction, negotiator satisfaction can become disconnected from the economic value of settlements (Galinsky et al., 2002). ...
... The present study focused on negotiators' feelings of satisfaction, which can be influenced by a range of factors, including aspiration levels (Galinsky, Mussweiler, & Medvec, 2002), the timing of concessions (Kwon & Weingart, 2004), and the number of negotiation issues (Naquin, 2003). Because many factors other than the objective terms of the deal can influence negotiator satisfaction, negotiator satisfaction can become disconnected from the economic value of settlements (Galinsky et al., 2002). For instance, negotiators who received false feedback indicating that their counterpart was happy felt less successful than did those who were told that their counterpart was disappointed, even though there was no difference in the economic outcomes across these conditions (Thompson, Valley, & Kramer, 1995). ...
... In fact, in certain situations, economic value can be negatively correlated with subjective value (SV). Notably, negotiators who were induced to set high aspiration levels achieved greater economic gains but felt less satisfied with their outcomes, given the greater difficulty in achieving these more ambitious goals (Galinsky et al., 2002). ...
... Evaluations are often contrastive (Kahneman, 1992) and so whether a particular outcome is perceived as a gain or loss depends on a reference point's relative position. Individuals who compare their outcomes to a low reference point tend to be more satisfied than those who compare their outcome to a high reference point (Galinsky, Mussweiler, & Medvec, 2002;Medvec, Madey, & Gilovich, 1995;Medvec & Savitsky, 1997). Thus, negotiators who mentally simulate aspirational alternatives may end up feeling less satisfied about a financially better outcome. ...
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This research demonstrates that people can act more powerfully without having power. Researchers and practitioners advise people to obtain alternatives in social exchange relationships to enhance their power. However, alternatives are not always readily available, often forcing people to interact without having much power. Building on research suggesting that subjective power and objective outcomes are disconnected and that mental simulation can improve aspirations, we show that the mental imagery of a strong alternative can provide some of the benefits that real alternatives provide. We tested this hypothesis in one context of social exchange – negotiations – and demonstrate that imagining strong alternatives (vs. not) causes powerless individuals to negotiate more ambitiously. Negotiators reached more profitable agreements when they had a stronger tendency to simulate alternatives (Study 1) or when they were instructed to simulate an alternative (Studies 3-6). Mediation analyses suggest that mental simulation enhanced performance because it boosted negotiators’ aspirations and subsequent first offers (Studies 2-6), but only when the simulated alternative was attractive (Study 5). We used various negotiation contexts, which also allowed us to identify important boundary conditions of mental simulations in interdependent settings: mental simulation no longer helped when negotiators did not make the first offer, when their opponents simultaneously engaged in mental simulation (Study 6), and even backfired in settings where negotiators’ positions were difficult to reconcile (Study 7). An internal meta-analysis of the file-drawer produces conservative effect size estimates and demonstrates the robustness of the effect. We contribute to social power, negotiations, and mental simulation research.
... We hypothesize that inaccurate estimates outside the bargaining zone will tend to be disconfirmed, such that they end up close to or perhaps even inside the bargaining zone (Bottom & Paese, 1999). Ambitious estimates are likely to lead to ambitious opening offers (Galinsky & Mussweiler, 2001;Galinsky, Mussweiler, & Medvec, 2002) that are outside the opponent's reservation price. These offers will be rejected, as they must be. ...
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