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The Dissatisfaction of Having Your First Offer Accepted: The Role of Counterfactual Thinking in Negotiations

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The Dissatisfaction of Having Your First Offer Accepted: The Role of Counterfactual Thinking in Negotiations

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Abstract

In this article, the authors explore the role of individuals’ counterfactual thoughts in determining their satisfaction with negotiated outcomes. When negotiators’ first offers are immediately accepted, negotiators are more likely to generate counterfactual thoughts about how they could have done better and therefore are less likely to be satisfied with the agreement than are negotiators whose offers are not accepted immediately. This reduction in satisfaction emerged even when the objective outcomes of negotiators whose first offers were immediately accepted were equal to or better than the outcomes of negotiators whose first offers were not immediately accepted. Evidence for a disconnect between objective outcomes and evaluations emerged in two scenario experiments and a simulated negotiation. The final experiment explored the functional and dysfunctional consequences of counterfactual activation following the immediate acceptance of first offers. Upward counterfactual thoughts were positively related to the amount of preparation for a subsequent negotiation; on the other hand, upward counterfactual thoughts were negatively correlated with the likelihood of making future first offers.

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... This work has developed critical insights into how the negotiation process impacts negotiated outcomes. Although scholars have also considered negotiators' satisfaction with their outcomes (Curhan, Elfenbein, & Xu, 2006;Galinsky, Seiden, Kim, & Medvec, 2002;Novemsky & Schweitzer, 2004;Oliver, Balakrishnan, & Barry, 1994), the extant literature has paid surprisingly little attention to what happens after an agreement has been reached (see review by Jang, Elfenbein, & Bottom, 2018). In fact, the dominant experimental paradigms used to study negotiations have presumed that the terms of a negotiated agreement fully reflect the economic value of a negotiation. ...
... We note, however, that in addition to the negotiation effect on relational conflict, the negotiation process may boost perceptions of autonomy by giving individuals greater influence in crafting their outcomes. Prior work has linked autonomy with both motivation and job performance (Deci et al., 2017;Gagné & Deci, 2005;Humphrey et al., 2007;Tyler & Blader, 2003), and the ability to negotiate customized deal terms could increase not only negotiator satisfaction (Galinsky et al., 2002;Kray & Gelfand, 2009), but also post-negotiation motivation and performance. This may be particularly true for complex negotiations in which negotiators are given wide latitude to structure terms of an agreement. ...
... Quite possibly, an exchange between two interdependent parties who react reciprocally and both stand to gain or lose in the negotiation may develop in a different way than our script allowed. Broadly, although in our studies we demonstrate that negotiation can promote relational conflict, the negotiation process has the potential to both promote and harm relationships (Galinsky et al., 2002;Kray & Gelfand, 2009;Schweitzer & Gomberg, 2001;Schweitzer & Kerr, 2000). ...
Article
The negotiation process can harm post-agreement motivation. For example, a homeowner might negotiate with a landscaper, but through the process of negotiating harm the landscaper’s motivation to deliver high quality service. In contrast to prior work that has assumed that negotiated agreements represent the full economic value of negotiated outcomes, we demonstrate that the act of engaging in a negotiation can itself influence post-agreement behavior in ways that change the economic value of an agreement. Across six studies, we demonstrate that negotiations can harm post-agreement motivation and productivity on both effortful and creative tasks. Specifically, we find that wage negotiations can harm post-agreement performance, even when the negotiation has integrative potential or is conducted face-to-face. The negotiation process can increase perceptions of relational conflict, and these conflict perceptions mediate the relationship between negotiation and performance. Compared to not negotiating, individuals who negotiate may secure favorable deal terms, but risk incurring affective, relational, and economic costs after the agreement. Our investigation fills a critical gap in our understanding of post-agreement behavior, and has particular relevance for negotiations that involve services. Our findings suggest that individuals should enter negotiations with caution, and we call for future work to explore not only what happens prior to an agreement, but also what happens after an agreement has been reached.
... • Satisfaction (Galinsky et al., 2002) • Willingness to Negotiate in Future (Maaravi et al., 2014) ...
... • Training (Maaravi & Levy, 2017) • Experience (Galinsky et al., 2002) • Power (Magee et al., 2007) • Entitlement (Neville & Fisk, 2019) ...
... Accordingly, Maaravi and Levy (2017) found that after training in decision-making and heuristics in the second year, 59% of the students showed a preference for making first offers. Similarly, Galinsky et al. (2002) found that past experiences can influence the propensity to make first offers. ...
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There is a wide consensus that first offers have a significant impact on negotiation outcomes by causing an anchoring effect. Many aspects of first offers have been analyzed, including factors that lead to making the first offer and characteristics that strengthen the impact of first offers. However, a holistic view of the process of first offers in negotiations remains missing, and significant research gaps must be filled to fully understand the mechanisms of first offers. Furthermore, while extant research contains anecdotal advice for negotiators, no holistic overview of research findings has been presented to date. This study conducted a structured literature review of 119 journal articles published since 1967, contributing to the field in four main ways: (a) proposing a definition of first offers, (b) integrating previous findings into a process model of first offers in negotiation, (c) summarizing the results to date in a structured literature review, and (d) identifying crucial research gaps that must be addressed. Future research should conduct systematic investigations of the influence of first offers on negotiation outcomes, employing a “negotiation lens” to emphasize the dyadic and interactive character of negotiations.
... The more negotiable issues there are, the greater the opportunity for the parties to find an integrative solution by trading issues based on each parties' different preferences. Despite the potential economic advantages of having multiple issues to negotiate and trade, a stream of research suggests that there is a disconnect between the economic outcomes from a multiple-issue negotiation and the negotiators' overall satisfaction with the achieved outcomes (Galinsky, Seiden, et al. 2002;Kahneman and Varey 1990;Medvec, Madey, and Gilovichm 1995;Naquin 2003). Negotiators frequently examine the economic outcomes in a post-hoc manner by considering what could have occurred relative to what actually occurred. ...
... This, in turn, can influence their future relationships and the desire for future negotiations with that partner (Novemsky and Schweitzer 2004;Oliver et al. 1994). Because negotiations characterize so many aspects of business life (Galinsky, Seiden, et al. 2002), an interesting research question that arises, then, is how to better manage multiple-issue negotiations so as to achieve the optimal integrative outcome, while also enhancing the negotiators' postnegotiation satisfaction. This study addresses this question. ...
... 558) Negotiations research has focused on the human element of negotiator satisfaction, which has been called "one of the most important measures of information systems success" (Wang, Lim, and Guo 2010, p. 282). Whether considering negotiation issues, such as first-offer positions (Galinsky, Seiden et al. 2002), regret reduction (Summerville 2011), pre-negotiation expectations and postnegotiation satisfaction (Doong and Lai 2008), or any other human element of a negotiation, there is little disagreement that electronic negotiation systems are useful for efficiently and effectively helping individuals evaluate alternative proposals, deals, and outcomes. Such systems allow a decision to be made more easily because alternative outcomes can be evaluated with greater certainty, and better or worse possibilities can be considered within the context of the proposed deal at hand. ...
Article
Negotiations research has identified both economic and social-psychological outcomes are important for negotiations. Despite the economic advantages of having multiple issues to negotiate, inconsistencies exist between objective economic outcomes and negotiator satisfaction. Although having more negotiable issues yields better objective payoffs, it can result in more thoughts about different possible outcomes. Such counterfactual thoughts about different outcomes can reduce overall satisfaction due to increased cognitive complexity and thoughts about different outcomes. In this study, we explore how information technology can influence negotiator satisfaction and better manage counterfactual thoughts and post-negotiation satisfaction. Results support the prediction that having a computer aid to better manage cognitively complex issues, even a relatively simple one, reduces participants’ counterfactual thoughts about better possible outcomes. As a result, the use of some type of technology—even a simple technology such as a spreadsheet—may improve overall negotiator satisfaction, while maintaining desirable economic outcomes.
... As a second extension of Allen et al. (1990), we include socioemotional outcomes (i.e., the opposing parties' perception of a hard-/softline negotiator) in our meta-analysis and investigate how these outcomes are affected by the type of bargaining strategies. 2 It has been shown that socioemotional outcomes can have a stronger impact on future relationships among negotiators and related negotiation opportunities than "mere" economic outcomes (Curhan, Elfenbein, & Xu, 2006). Analyzing this issue meta-analytically seems all the more important because initial evidence suggests that dissociations of the two types of negotiation outcomes often occur (e.g., Curhan et al., 2006;Galinsky, Seiden, Kim, & Medvec, 2002). ...
... Appropriate and contingent softline strategies (e.g., or a combination of hardand softline elements-such as extreme first offers and a subsequent contingent concession strategy-may, for example, be capable of maximizing both economic and socioemotional outcomes (cf. Galinsky et al., 2002;Hilty & Carnevale, 1993;Pruitt, 1981). ...
... This recommendation applies all the more when the negotiators know that the opposing party values an agreement, when one-time negotiations with male opposing parties are concerned and face-to-face contact among the negotiators is possible. When negotiators, however, prefer making the impression to be responsive to the counterpart's needs, they should either employ a contingent strategy with perfect reciprocity in terms of concessions and nonconcessions or possibly combine extreme first offers with a perfectly contingent softline strategy (e.g., Galinsky et al., 2002;Pruitt, 1981). Such a strategy possesses more potential than pure hardline strategies to secure optimal economic and socioemotional outcomes both in the short-and long-term and thereby helps to build and maintain long-term relationships. ...
Article
A meta-analysis (34 studies) is reported on the impact of hard- and softline bargaining strategies on economic (135 effect sizes) and socioemotional negotiation outcomes (30 effect sizes) in distributive negotiations. As expected, hardline strategies lead to higher economic outcomes, whereas softline strategies lead to higher socioemotional outcomes. Moreover, moderator variables are derived from the graduated reciprocation in tension-reduction model and the level of aspiration theory that are expected to qualify the relation of bargaining strategies and achieved economic outcomes. In accordance with this theoretical background, moderator analyses reveal that hardline negotiators gain the highest economic outcomes when visual contact is possible, when the opposing party is male, when negotiators are instructed to maximize individual outcomes, and when they know the bargaining zone. Also in line with the theoretical assumptions, softline negotiators gain the highest economic outcomes when they accurately reciprocate the opposing party's concessionary behavior. Contrary to the predictions, softline bargaining does, however, not prevail when the risk and cost of impasses are high. Based on the reported findings, needs for future research and theory building are identified and discussed.
... When bids are rejected in NYOP auctions, counterfactual thoughts for better possible scenarios may occur (e.g., I wish my bid had been accepted) (Roese & Hur, 1997;Roese & Olson, 1997;Sanna & Turley, 1996). Previous studies suggest that counterfactual thoughts also occur when the first offer is accepted because the bidder may think about how he or she could have done better (e.g., If I had bid lower, I could have gotten a better deal) (Galinsky et al., 2002;Roese & Hur, 1997;Sanna & Turley, 1996). These counterfactuals can influence future behaviors (e.g., bidding lower next time) (Boninger et al., 1994;Roese, 1994). ...
... In NYOP auctions, bidders tend to place relatively low first bids without much expectation that they will be accepted because they can bid again immediately after rejections. Thus, if an immediately accepted bid is an unexpected outcome, such an unexpected outcome is likely to evoke a counterfactual thought (Galinsky et al., 2002;Kahneman & Miller, 1986;Roese & Hur, 1997;Sanna & Turley, 1996). Once a bid is accepted, we believe it is natural that attention shifts from the winning of the bid to the amount of the bid to a certain degree (e.g., "I could have bid lower"). ...
... Because second chances are offered after rejected bids, rejections are less likely to generate upward counterfactual thoughts compared to accepted bids. In addition, Galinsky et al. (2002) found that compared to a delayed acceptance or negotiated acceptance of one's first offer, an immediate acceptance increases upward counterfactual activation. The reason why upward counterfactual thoughts are more likely to be activated when the first offer is immediately accepted is that an immediate acceptance is perceived as an "abnormal" cause (i.e., one that is exceptional rather than routine) and this exceptionality increases the occurrence of upward counterfactual thoughts (Galinsky et al., 2002;Kahneman & Miller, 1986). ...
Article
This research examines the effects of pre-counterfactual thinking and anticipated emotions on the amount of the first bid placed in Name-Your-Own-Price auctions. The results of Study 1 indicate that upward counterfactuals are elicited more than downward counterfactuals in response to both accepted and rejected bids. Study 2 investigates the effect of imagination of upward counterfactual thinking on the first bid. The results indicate that upward pre-counterfactual thinking about an accepted bid results in anticipated regret, which increases the amount of the first bid; however, the amount is not influenced by anticipated disappointment resulting from pre-counterfactual thinking of a rejected bid.
... For example, both schizophrenia patients (Hooker et al. 2000 ) and Parkinson's patients (McNamara et al. 2003 ) have diffi culty in articulating counterfactual thoughts. Considering counterfactuals helps people prepare more effectively for what is to come -engaging in counterfactual thinking helps people both capitalize on their successes and avoid their past failures (Roese 1994 ;Galinsky et al. 2002 ). Taken together, research on the counterfactual mind-set over the last 10 years (e.g., Galinsky and Kray 2004 ;Kray and Galinsky 2003 ;Kray et al. 2006Kray et al. , 2009 suggests that counterfactual thinking fundamentally alters how we approach the future. ...
... The way in which older adults ponder and consider past events, however, is relatively unknown. Recall that previous research has demonstrated that considering counterfactuals helps people both capitalize on previous successes and avoid past failures (Roese 1994 ;Galinsky et al. 2002 ). Healthy psychological adjustment leads to more frequent generation of such counterfactuals (Hooker et al. 2000 ) -presumably because over time, an individual gradually learns the benefi ts of engaging in such refl ections. ...
Chapter
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When major decisions arise, people make choices that immediately set them on particular life paths and trajectories. Such pivotal moments have been dramatized in literature (e.g., Frost's (1969) famous poem, The Road Not Taken), film (e.g., Sliding Doors), and even in a recent series of AT&T commercials that portray this phenomenon as it relates to modern day life. In one such commercial, the narrative moves backward in time from a president being inaugurated, to his early childhood, to his parents buying their first home, and to their first date at a movie theater. The commercial ends with a younger version of the president's father waiting idly for a train as he suddenly notices a gorgeous woman sitting in the passenger car across the platform. When he instantly changes his ticket (wirelessly, on his AT&T phone of course) so that he can have the opportunity to meet her, the tagline Any second could be the second plays across the screen. Naturally, we are left to wonder: What if he hadn't been able to change his train ticket? Would the course of his life have played out differently? Would another opportunity have arisen to unite him with his wife and mother of his child (the future president, no less)? In this chapter, we propose that how people think about past events and decisions - whether and how they consider those seemingly chance events and alternative realities that might have been - fosters an appreciation for both those defining moments from the past, as well as the present reality that these moments helped to construct. © 2013 Springer Science+Business Media Dordrecht. All rights reserved.
... Negotiation research has shown that negotiator satisfaction depends on more than the actual outcome, such as on how favorable the negotiator's outcome is as compared with the other party's outcome (i.e., social comparison, e.g., Gillespie et al., 2000;Loewenstein, Thompson, & Bazerman, 1989;Novemsky & Schweitzer, 2004) or whether the negotiator's outcome meets his or her expectations (e.g., Oliver, Balakrishnan, & Barry, 1994). Furthermore, negotiators have been found to be less satisfied when the other party accepted their offer immediately versus some time later (Galinsky, Seiden, Kim, & Medvec, 2002b), and when they had focused on the aspiration rather than the reservation price (Galinsky, Mussweiler, & Medvec, 2002a; see also Thompson, 1995), or when more, rather than less, negotiation issues were at stake (Naquin, 2003). This is because people may be more apt to engage in counterfactual thinking (i.e., consider whether other, possibly better, outcomes might have been possible) when (i) the other party's acceptance was immediate, (ii) they focused on the aspiration price, or (iii) there were many negotiation issues (for reviews on negotiator satisfaction, see Barry, Fulmer, & Goates, 2006;Neale & Fragale, 2006;Thompson, Wang, & Gunia, 2010). ...
... Exploring such underlying mechanisms could be an interesting avenue for future research. Thus, whereas previous research showed that objectively better outcomes are not necessarily more satisfactory due to counterfactual thinking (e.g., Galinsky et al., 2002aGalinsky et al., , 2002bNaquin, 2003) or social comparison (e.g., Gillespie et al., 2000;Loewenstein et al., 1989;Novemsky & Schweitzer, 2004), our findings suggest that the negotiation content itself can be influential. ...
Article
Full-text available
Negotiation research usually distinguishes between integrative and distributive outcomes. Integrative outcomes satisfy the negotiation parties' most important interests (by trading off less important for more important issues). In contrast, distributive outcomes require negotiators to give up their most important interests (as they make concessions on both less and more important issues). Integrative outcomes are more beneficial, but do they offer greater satisfaction? In this research, we hypothesized that satisfaction with integrative versus distributive outcomes depends on whether people negotiate interest-based or value-based issues. Three experiments consistently revealed that people in interest-based negotiations were more satisfied with integrative outcomes, whereas those in value-based negotiations tended to be more satisfied with distributive outcomes. Copyright © 2014 John Wiley & Sons, Ltd.
... Mental simulations also play an important role in negotiations. For instance, negotiators who had their first offer immediately accepted (compared to those who had to negotiate) were less satisfied after the negotiation because they engaged in greater counterfactual thinking, mental simulations about "what might have been" had they made a different offer (Galinsky, Seiden, Kim, & Medvec, 2002). Likewise, negotiators who negotiated more (vs. ...
... Past research on mental simulation has primarily relied on laboratory settings in which individuals' performance was independent of the behavior of other social actors and in which there were few, if any, structural constraints (Epstude & Roese, 2008;Roese, 1994Roese, , 1997. Even the few studies that tested the effects of mental simulation in contexts where actors are naturally interdependent generally focused on the cognitions and behavior of an isolated party or utilized tasks where agreement was relatively easy to achieve in contexts such as negotiations (e.g., Galinsky, Seiden, Kim, & Medvec, 2002;Kray et al., 2009), group decisionmaking (e.g., Galinsky & Kray, 2004), or inter-group settings (e.g., Stathi & Crisp, 2008;Turner, Crisp, & Lambert, 2007). Thus, it remains unclear whether the effectiveness of mental simulation is contingent on the behavior of the counterparty or structural aspects of a situation that make agreements more difficult to achieve. ...
Article
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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.
... More support for the idea that people interpret others' decision times as reflecting doubt comes from a set of studies by Galinsky, Seiden, Kim, and Medvec (2002). In one of their studies, negotiators in the role of a buyer were significantly less satisfied with the outcome of the negotiation when their first offer was immediately accepted by the seller. ...
... This occurred presumably because the internal comparison induced negotiators to focus their attention on the missed opportunity to claim even more surplus (Novemsky and Schweitzer, 2004). On the one hand this result shows that social comparison can dramatically influence negotiator satisfaction-independent of actual performance (see also, Galinsky, Seiden, Kim, and Medvec, 2002;Loewenstein, Thompson, and Bazerman, 1989;Thompson, Valley, and Kramer, 1995). On the other hand, this example illustrates that social comparisons undertaken in the context of negotiation can have qualitatively different outcomes, depending on whether people compare internally or externally. ...
Chapter
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We engage in social comparisons every day, comparing our outcomes, accomplish-ments, and even emotions with those ofothers. Jan Crusius and Thomas Mussweiler examine the implications ofsocial comparisons in bargaining behavior. They suggest new avenues for research in bargaining, and help us to better understand why we negotiate the way that we do. Jan Crusius is Assistant Professor of Social Psychology at the University of Cologne. He studies emotional influences on judgment and decision making and social comparison processes. Thomas Mussweiler is Professor of social psychology at the University of Cologne and an expert on social comparisons in a variety of settings. SOCIAL 'COMPARISON IN NEGOTIATION Social comparisons are an inevitable part of negotiations. Whether people try to get a pay raise, sell a house, or negotiate the appropriate bedtime with a toddler, negotiators compare their positions, demands, and outcomes to those of others. What do other people earn who have similar jobs? How stubborn is my boss? How happy was the buyer with the final price compared to me? How did my spouse Crusius, J., & Mussweiler, T. (2012). Social comparison in negotiation. In G. E. Bolton & R. T. A. Croson (Eds.), The Oxford handbook of economic conflict resolution (pp. 120¨C137). New York: Oxford University Press.
... People's dissatisfaction with their current career, job, and life grows stronger as they compare and imagine, as does their confidence in being competent in another professional identity, i.e., their self-efficacy. Entrepreneurial self-efficacy is an application of self-efficacy to the entrepreneurial domain and is a belief whereby individuals believe they are competent in different entrepreneurial roles and tasks [13]. Therefore, entrepreneurial self-efficacy is a key variable that influences the behavior of employees who have entrepreneurial dreams before they commit to action. ...
Article
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Many people have entrepreneurial dreams in mind, yet existing research has neglected to focus on this phenomenon. This paper introduces the concept of entrepreneurial dreams, constructs a model of the relationship between entrepreneurial dreams and turnover intention to start-up, based on identity theory and prospect theory, and empirically analyses the mechanism of the effect of entrepreneurial dreams on turnover intention to start-up. Through the analysis of data from two multi-provincial and multi-wave employee studies (Study 1 N = 198, Study 2 N = 227), the findings show that: (1) employees’ entrepreneurial dreams positively influence turnover intention to start-up; (2) employees’ entrepreneurial dreams can stimulate employees’ sense of entrepreneurial self-efficacy, thus positively influencing turnover intention to start-up; (3) job embeddedness plays a moderating role in the relationship between entrepreneurial self-efficacy and turnover intention to start-up, specifically, the higher the degree of job embeddedness, the weaker the effect of entrepreneurial self-efficacy on turnover intention to start-up; (4) job embeddedness moderates the indirect effect of entrepreneurial dreams on turnover intention to start-up through entrepreneurial self-efficacy, specifically, the higher the degree of job embeddedness, the weaker the indirect effect of entrepreneurial dreams on turnover intention to start-up through entrepreneurial self-efficacy. This study reveals the mediating role of employees’ entrepreneurial self-efficacy and the moderating role of job embeddedness in the influence of entrepreneurial dreams on employees’ turnover intention to start-up, which provides theoretical and practical references for relevant organizations.
... When reflecting on actions that could have been taken ( " if only I would have made a more extreme opening offer " ) as opposed to actions that were taken ( " if only I hadn't settled so quickly, I would have done better " ), negotiators can derive the most benefit from counterfactual regret because this process facilitates the development of a roadmap for guiding future negotiations (Kray et al., 2009; Wong, Haselhuhn, & Kray, 2012). Having one's first offer accepted is a common elicitor of regret because it signals that a better outcome was obtainable (Galinsky, Seiden, Kim, & Medvec, 2002). ...
... In fact, the first offer represents the first chance for negotiators to make concessions. Previous research has associated first offers with subsequent patterns of concessions and, ultimately, negotiated outcomes (Galinsky et al., 2002). In our study, 10 participants from the experimental group and 9 participants from the control group made the first offer, so we found no link between the condition and the first offer. ...
Article
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This pilot study aimed to assess loving-kindness meditation as a mood induc-tion procedure and investigate the role of positive emotions on different as-pects of negotiation processes and outcomes. Thirty-eight undergraduatepsychology students formed dyads and were assigned to one of three condi-tions: in the first condition, positive emotions were induced to both parties ineach dyad; in the second condition, positive emotions were induced to one ofthe two counterparts, and in the third condition, individuals were not e x-posed to any emotional manipulation. The effectiveness of the meditationpractice was assessed using SPANE-8 to measure participants’ emotions and anegotiation simulation followed using a widely used cell phone negotiationexercise. The results showed that loving-kindness meditation led to increasedlevels of positive emotions and decreased levels of negative emotions. Also, itwas found that positive emotions relate to increased cooperation potentialand reduced possibilities for exit decisions, while it was also found that thehigher the levels of positive emotions, the less negotiation time is needed forindividuals to reach an agreement. The hypotheses about the relationship ofpositive emotions with negotiators’ first offer, aspirations, expectations, indi-vidual gains, and joint gains were not confirmed.
... When reflecting on actions that could have been taken ("if only I would have made a more extreme opening offer") as opposed to actions that were taken ("if only I hadn't settled so quickly, I would have done better"), negotiators can derive the most benefit from counterfactual regret because this process facilitates the development of a roadmap for guiding future nego- tiations ( Kray et al., 2009;Wong, Haselhuhn, & Kray, 2012). Having one's first offer accepted is a common elicitor of regret because it signals that a better outcome was obtainable (Galinsky, Seiden, Kim, & Medvec, 2002). ...
Chapter
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The behavioral decision research (BDR) perspective has been instrumental in uncovering erroneous assumptions and biases that prevent negotiators from achieving optimal solutions. This chapter examines negotiations through the BDR lens. After articulating signature characteristics of this approach and identifying cognitive research that has adopted it, the chapter explores how a consideration of affect and motivation further elucidate negotiations. It then considers the utility of the BDR approach in light of research highlighting the importance of relational performance measures to negotiators. The chapter also considers how BDR paradigm's emphasis on drawing comparisons to a normative economic standard can be leveraged to bring relational aspects of performance further into the negotiation landscape. The primary objective is to illustrate the BDR perspective by juxtaposing it with alternate theoretical perspectives. In so doing, it takes stock of behavioral negotiation theory, identifies its strengths and weaknesses, and suggests promising directions for future research.
... In addition to employees generating upward counterfactuals when experiencing PRS, employees experiencing PRL may also do the same: "if only I had denied the offer, then I would not have met the current abusive boss". In general, the generation of upward counterfactuals helps employees to prepare for future workplace negotiations (Galinsky, Seiden, Kim, & Medvec, 2002). ...
Article
We develop a theoretical framework for voluntary turnover decisions that captures employees' multiple turnover decisions. Our framework addresses both leaving and staying decisions in the voluntary turnover process in a continuous, sequential fashion, and we describe how past turnover decisions can leave “residuals” on future turnover decisions, thus influencing those latter decisions. In particular, we explain that employees make voluntary turnover decisions to achieve well-being, but may experience postdecision regret in the process if they negatively appraise their initial turnover decision. We therefore establish postdecision regret as an important antecedent in future turnover decisions and explain how employees try to manage it through counterfactual thinking and self-regulatory motivations.
... The current study explores the relationship between depression and counterfactual thinking, which refers to the process of comparing reality and "what might have been" had a different decision been made (Coricelli et al., 2007). Comparisons based on alternatives that improve on reality (i.e., upward counterfactual) generate feelings of regret and disappointment (Mandel, 2003;Zeelenberg et al., 1998), while comparisons based on alternatives that worsen reality (i.e., downward counterfactual) generate feelings of rejoice and gratification (Galinsky et al., 2002;Medvec and Savitsky, 1997). The influence of depression on counterfactual thinking has been examined by many studies, but the precise nature of this influence is still debated. ...
Article
Depression has been linked to counterfactual thinking in many behavioral studies, but the direction of this effect remains disputed. In the current study, the relationship between depression and counterfactual thinking was examined using the event-related potential (ERP) technique. In a binary choice gambling task, outcome feedback of the chosen option and that of the alternative option were both provided, so as to elicit the process of counterfactual comparison. By investigating ERP signals in response to outcome presentation, we discovered that when the fictive outcome was better or worse than the factual outcome, the amplitude of the P3 component was positively correlated with individual levels of depression, but not levels of anxiety. These results indicate that depression strengthens both upward counterfactual thinking and downward counterfactual thinking. The implication of this finding to clinical research is discussed. Copyright © 2015. Published by Elsevier B.V.
... 32 In the context of a salary negotiation that can affect years of future earnings, women also reported being more likely to breathe a sigh of relief when a recruiter agreed to the first figure they had put on the table than men did, whose reaction was more likely to involve regret. Although regret may sound like a less desirable reaction than relief, we know that the counterfactual process of thinking about how a negotiation might have unfolded more favorably, which tends to follow from feelings of regret, actually spurs negotiators to invest more in their future negotiation preparations, 33 thus promoting future success. A lack of enthusiasm reduces how committed negotiators are to a process that can vastly improve their lives. ...
Article
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With the controversy surrounding Larry Summers's comments about innate differences between men and women as a backdrop, this article examines whether and when gender differences exist in the competitive negotiation arena. It reviews research that documents the impact of negotiators' beliefs and motivations on performance, focusing on gender stereotypes and their message regarding women's inability to perform on par with their male counterparts in business dealings. It documents the distinct performance impact of stereotypes that operate below the threshold of consciousness versus stereotypes that are out in the open; and it specifically explores gender stereotypes in the context of the broader issue of bargaining power. Such stereotypes affect both objective and subjective power at the bargaining table. After providing insights into the way that gender stereotypes operate, this article identifies strategies for mitigating their potentially harmful effects and instead using them to encourage performance gains.
... Weiterhin wurde bereits mehrfach gezeigt, dass Verhandlungsparteien erwarten, dass es in Verhandlungen zu gegenseitigen Zugeständnissen kommt. Ohne ein solches Vorgehen sind Verhandlungsteilnehmer auch mit ökonomisch gleichwertigen Verhandlungsergebnissen unzufriedener (Galinsky, Seiden, Kim & Medvec, 2002;Kwon & Weingart, 2004). Entsprechend liegt ein weiterer Vorteil anspruchsvoller erster Angebote in der Möglichkeit, später der anderen Seite Zugeständnisse machen zu können, ohne dem eigenen Verhandlungsergebnis zu schaden. ...
Article
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Zusammenfassung. Die sozial- und organisationspsychologische Verhandlungsforschung hat in den letzten ca. 25 Jahren einen Aufschwung erlebt und zahlreiche wichtige Einzelbefunde hervorgebracht. Diese Befunde werden allerdings oft nur isoliert betrachtet, so dass eine Zusammenfuhrung der relativ abstrakten Grundprinzipien bislang fehlt. In unserem Beitrag geben wir eine Ubersicht zum aktuellen Forschungsstand und entwickeln darauf aufbauend ein integratives Phasenmodell der Verhandlungsfuhrung (IPV). In diesem Modell wird das mogliche Verhandlungsgeschehen in vier zeitliche Phasen von der Verhandlungsvorbereitung bis zu moglichen Nachverhandlungen untergliedert und anhand von insgesamt elf Leitfragen weiter strukturiert. Basierend auf empirischer Verhandlungsforschung ermoglicht das IPV nicht nur die Identifikation aktueller Fragen fur die weitere Forschung, sondern auch konkrete Empfehlungen fur praktisches Verhandlungsverhalten. Abschliesend werden Randbedingungen diskutiert, die die Vorhersagen des IPV ...
... They randomly assigned MBA students to respond to a scenario in which their first compensation request was either immediately accepted by the employer or in which there were several rounds of exchange of concessions before a compensation agreement was reached. Previous research suggested that the MBA students would feel less satisfied about the negotiation when their first offer was immediately accepted because a quick agreement would suggest they could have asked for more (Galinsky, Seiden, Kim, & Medvec, 2002). However, KIay and Gelfand hypothesized that, if it were unclear whether negotiating was socially appropriate (high norm ambiguity), having a first offer accepted would disappoint women less than men because prescriptive gender stereotypes make compensation negotiations more socially awkward for women than men (Bowles et aI., 2007). ...
... The proposition that even downward internal social comparison values may lower satisfaction is consistent with prior work that has found that negotiators tend to be less satisfied when they believe that they could have earned higher outcomes. For example, Galinsky, Seiden, Kim, and Medvec (2002) find that even when negotiators earned more surplus, they were less satisfied when their counterpart immediately accepted their first offer than when their counterpart did not immediately accept their first offer. In other work, Naquin (2003) finds that negotiators are less satisfied when their negotiation involves a large number of issues than when their negotiation involves a small number of issues, because negotiators are concerned that they will miss opportunities for increasing their surplus-a legitimate concern (Moran & Ritov, 2002;Pinkley, Griffith, & Northcraft, 1995). ...
Article
This paper 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 paper 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.
... The recruiter was a confederate who was blind to experimental condition and to the study hypotheses. Consistent with prior negotiation studies [35,36], the recruiter's responses were predetermined and the same confederate was used for all participants. The confederate was a military veteran with ten years of corporate experience and was therefore older than the majority of participants, allowing him to realistically portray a corporate recruiter. ...
Article
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Prior research suggests that stress can be harmful in high-stakes contexts such as negotiations. However, few studies actually measure stress physiologically during negotiations, nor do studies offer interventions to combat the potential negative effects of heightened physiological responses in negotiation contexts. In the current research, we offer evidence that the negative effects of cortisol increases on negotiation performance can be reduced through a reappraisal of anxiety manipulation. We experimentally induced adaptive appraisals by randomly assigning 97 male and female participants to receive either instructions to appraise their anxiety as beneficial to the negotiation or no specific instructions on how to appraise the situation. We also measured participants’ cortisol responses prior to and following the negotiation. Results revealed that cortisol increases were positively related to negotiation performance for participants who were told to view anxiety as beneficial, and not detrimental, for negotiation performance (appraisal condition). In contrast, cortisol increases were negatively related to negotiation performance for participants given no instructions on appraising their anxiety (control condition). These findings offer a means through which to combat the potentially deleterious effects of heightened cortisol reactivity on negotiation outcomes.
... Zwick and Chen (1999) investigate a preference for fairness in an alternating-offers bargaining game. Galinsky et al (2002) consider the impact of counterfactual thinking, specifically on one's satisfaction when a better deal could have been reached. The back-and-forth nature of extended negotiations is shown to be associated with higher levels of satisfaction than when an opening offer is accepted. ...
... Finally, this moderating impact of precision is expected to particularly foster the potency of anchors that are less plausible (more extreme) in the first place: In negotiations, buyers (sellers) who receive a first offer are commonly aware that the offer is too high (low) and will be adjusted subsequently (Galinsky, Seiden, Kim, & Medvec, 2002). The more extreme a first offer, the less plausible the anchor and the more recipients are aware that the anchor needs adjustment. ...
Article
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In negotiations, higher first offers from sellers drive up sale prices—reversely, buyers benefit from lower first offers. Whereas abundant research has replicated this robust anchoring effect of opening offers, little is known about the impact of anchors’ precision or the interplay of extremity and precision. We propose that precision moderates the effect of anchor extremity, in that precise anchors gain in plausibility and thereby magnify the first-mover advantage. Two experiments tested this assumption. Study 1 shows that increasing precision strengthens the anchoring potency of first offers—sellers assimilate more to strong and precise anchors, which ultimately results in a particularly pronounced first-mover advantage. Study 2 replicates this moderating effect for buyers and indicates that an increased plausibility of precise anchors accounts for the findings. Implications for anchor theorizing, negotiation research, and the first minutes at a bargaining table are discussed.
... The fourth exchange strategy mentioned in the conventional literature concerns the process used for making concessions. While counterintuitive, rather than being satisfied, a negotiator is likely to be dissatisfied when his or her first offer is met with acceptance since immediate acceptance of an offer implies that the negotiator could have done better (Galinsky, Seiden, Kim, & Medvec, 2002). Why is this? ...
... Conversely, if men's enthusiasm is not met with success later, men likely feel regret (see Kray & Gelfand, 2009). Regret is "a signpost for upward counterfactual thought" (Kray & Gelfand, 2009: 433), such as when an opportunity for individual gains is left untapped (see Galinsky, Seiden, Kim, & Medvec, 2002). Thus, when men are ultimately unable to achieve the high individual gains to which they aspire, they likely feel regret. ...
Article
A pervasive phenomenon in the workplace is that men appear eager to show how “tough” they are as negotiators. We introduce the Masculinity Effects in Negotiations (MEN) model to explain men’s negotiation behaviors and outcomes. According to the model, men perceive negotiating as an activity in which they can signal their masculinity and pursue social status, but they also recognize that their masculinity might be questioned and that they might lose social status. As a result, men can become enthusiastic but also anxious about negotiations and these emotions lead them to display a number of agentic negotiation behaviors to protect and underscore their masculinity and their social status. Depending on their own and their counterpart’s behavior, men then either succeed or fail to obtain favorable economic negotiation outcomes, which influence their subsequent emotions (e.g., pride or shame). With our model, we advance a novel explanation for gender differences in negotiations and expand the understanding of men’s workplace behaviors and outcomes (e.g., their pay, position, and reputation).
... This subjective assessment of the negotiation, referred to as the winner's curse, is at least partially based on counter-factual thinking by the negotiator. Instead of admitting to themselves that they were obviously not sufficiently informed of the counterparty's position or the value of the item for negotiation and that they have made an error with their initial offer, they interpret the negotiation in light of a "what would have happened, if I had submitted a higher offer?" with a correspondingly unsatisfactory response ( Galinsky et al. 2002). ...
Chapter
Transactions in the industrial plant and project business are generally concluded by negotiations between the purchasing organization and the supplier company. The outcomes of these negotiations are predominantly responsible for determining the profitability of the order for the supplier and the benefits and quality of the solution for the purchaser. This chapter provides an overview of the characteristics of the negotiation situation in the industrial plant and project business with regard to the aspects of time, organization and content. The current modeling in relation to negotiation situations is then presented, which distinguishes between distributive and integrative negotiations. The customary measures for assessing the success of negotiations are also discussed: negotiated gains, efficiency and satisfaction. This chapter focuses on the consideration of influencing factors on negotiations, which can be broken down into static context and personnel factors as well as dynamic determinants, i.e. psychological and interaction processes. Both their characteristics and effects are presented and they are also discussed from the current theoretical perspectives. The section at the end of the chapter is dedicated to specific preparatory measures that a negotiating party can take in order to ensure that they receive the greatest possible benefit from negotiations in the project and industrial plant business.
... Furthermore, past research suggests that the immediate acceptance of an offer is viewed as unusual. For example, Galinsky, Seiden, Kim, and Medvec (2002) surveyed participants to judge the typicality of three negotiation scenarios in which the buyer (1) immediately accepted, (2) accepted after a delay, or (3) engaged in multiple rounds of negotiations before reaching an agreement. Participants judged the immediate acceptance of an offer as the least typical scenario followed by the delayed acceptance and the negotiation scenario. ...
Article
Prior research shows that precise first offers strongly anchor negotiation outcomes. This precision advantage, however, has been documented only when the parties were already in a negotiation. We introduce the concept of negotiation entry, i.e., the decision to enter a negotiation with a particular party. We predict that precise prices create barriers-to-entry, reducing a counterpart’s likelihood of entering a negotiation. Six studies (N=1,580) and one archival analysis of real estate data (N=11,203) support our barrier-to-entry prediction: Potential negotiators were less likely to enter a negotiation with precise- versus round-offer makers. Using both statistical mediation and experimental-causal-chain analyses, we establish that perceptions of offer-maker inflexibility underlie the precision barrier. Furthermore, we demonstrate that the precision mechanism (inflexibility) is distinct from the extremity mechanism (being offended) that produces barriers-to-entry from extreme first offers. The discussion theoretically integrates research on first-offer precision and extremity by offering the Precision-Extremity Model of First Offers.
... As illustrated in Figure 1, when one's counterpart makes a first offer that exceeds one's expectations and is thus accepted immediately, the agreement will be framed as a gain from the focal negotiator perspective (path 3 in Figure 1). On the other hand, when the first offer made by the focal negotiator is accepted immediately by his or her counterpart (path 2), the initiator is more likely to perceive the agreement as a loss (Galinsky, Seiden, Kim & Medvec, 2002). Since losses influence decisions more than gains, it is hypothesized that lay people, those who are not aware of the positive effect of first offers, will prefer to move second. ...
Article
The literature on behavioral decision-making and negotiations to date usually advocates first-mover advantage in distributive negotiations, and bases this preference on the anchoring heuristic. In the following paper, we suggest that the preference for moving first vs. moving second in negotiations may not be as clear-cut as presumed, especially in situations characterized by information asymmetry between negotiating counterparts. In Study 1, we examined people’s initiation preferences and found that unless taught otherwise, people intuitively often prefer to move second. In Studies 2–4, we experimentally tested the suggested advantage of moving second, and demonstrated that in information-asymmetry scenarios – when one party has perfect background information and the other has none — it is actually preferable for both counterparts not to give the first offer while negotiating. We discuss the implications of our findings on the field of negotiation and decision-making, and lay the groundwork for future studies examining this issue. © 2017, Society for Judgment and Decision making. All rights reserved.
... Yawns suddenly settle. Having recaptured everyone's attention, I describe an interesting research study in which sellers were always instructed to make the first offer, and buyers were randomly assigned to either immediately accept the seller's first offer or negotiate it (Galinsky, Seiden, Kim, & Medvec, 2002b). 1 When buyers immediately accepted the seller's offer, whatever it was, how favorable of a deal do you think they usually got? Not very: given the immutable laws of economics, sellers naturally made high offers, and buyers who accepted them naturally did crummy. ...
Article
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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.
... Further evidence documents the link from counterfactuals to performance. Among the more compelling domains in which to study counterfactual thinking is negotiation (Galinsky, Seiden, Kim, & Medvec, 2002). When two or more individuals bargain over limited resources, a mutually beneficial agreement is far from certain. ...
Chapter
Thinking about what might have been-counterfactual thinking-is a common feature of the mental landscape. Key questions about counterfactual thinking center on why and how they occur and what downstream cognitive and behavioral outcomes they engender. The functional theory of counterfactual thinking aims to answer these and other questions by drawing connections to goal cognition and by specifying distinct functions that counterfactuals may serve, including preparing for goal pursuit and regulating affect. Since the publication of our last theoretical statement (), numerous lines of empirical evidence support, or are rendered more readily understandable, when glimpsed through the lens of the functional theory. However, other lines of evidence have called into question the very basis of the theory. We integrate a broad range of findings spanning several psychological disciplines so as to present an updated version of the functional theory. We integrate findings from social psychology, cognitive neuroscience, developmental psychology, clinical psychology, and health psychology that support the claim that episodic counterfactual thoughts are geared mainly toward preparation and goal striving and are generally beneficial for individuals. Counterfactuals may influence behavior via either a content-specific pathway (in which the counterfactual insight informs behavior change) or a content-neutral pathway (in which the negative affect from the counterfactual motivates generic behavior change). Challenges to the functional theory of counterfactual thinking center on whether counterfactuals typically cohere to a structural form amenable to goal striving and whether behavioral consequences are mainly dysfunctional rather than functional. Integrating both supporting and challenging evidence, we offer a new theoretical synthesis intended to clarify the literature and guide future research in multiple disciplines of psychology.
... Although a few studies have examined the effects of integration on more than one outcome measures (e.g., Liu et al., 2012a), existing research typically only includes one economic outcome and some subjective outcomes (Curhan et al., 2006), without assessing a broader spectrum of outcome dimensions. Galinsky et al. (2002) show that objective and subjective outcome measures do not always converge. We believe that the shared cognition and identity developed during the process of negotiation influence both outcome quality and different aspects of perceptions (Rognes and Schei, 2010). ...
Article
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The U.S.–China relationship was of crucial importance, said [Chinese diplomat] Dai. China would do its best to cooperate with the United States wherever possible. "If we expand the pie for the common interest, the pie will be larger and more delicious." Together, the two sides should work collabora-tively for the good of the world, especially since the two countries were "pas-sengers in the same boat". Dai urged careful management of the relationship and respect for each other's core interests and concerns. Wikileaks, 18 (S) The above quote shows how a Chinese diplomat understands Sino–American relationships and hopes for the understanding and metaphors to be shared by both parties. A shared mental model, or a common understanding of some situation or phenomenon among a dyad of individuals, has been an important goal for negotiators to pursue. Negotiation is a social exchange where individuals perceive themselves as having opposing interests regarding scarce resources (Bazerman et al., 2000). To be effective, each negotiation party needs to seek to claim as much of the resources as possible. At the same time, they need to establish agreements on not leaving resources on the bargaining table (Swaab et al., 2007). Thus, a key challenge for most negotiators is to align individual and group interests, which requires individual negotiators to recognize some overarching commonalities leading them to pursue outcomes that benefit themselves as well as others (Swaab et al., 2007). This is precisely what a shared mental model and identity may offer: They positively influence each other and group outcomes because they give rise to an understanding of underlying interests as well as a willingness to make trade-offs. Our purpose in this chapter is to propose an integrative input-output framework that organizes current literature and future directions on the study of shared cognition and identity in negotiation. We maintain that the input factors reflect negotiators' perceptions of various anteced-ents to a dynamic process that cultivates shared cognition and identity. The output factors convey the expressed manifestation or outcomes of such dynamic processes. OLEKALNS 9781781005897 PRINT (M3139).indd 75 OLEKALNS 9781781005897 PRINT (M3139).indd 75 09/04/2013 13:28 09/04/2013 13:28
... Diese subjektive Bewertung der Verhandlung als winner's curse beruht zumindest teilweise auf kontrafaktischem Denken des Verhandlers. Anstatt sich einzugestehen, dass er offenbar nicht ausreichend über die Lage der Gegenpartei oder den Wert des Verhandlungsgegenstands informiert war und daher mit seinem Erstangebot einen Fehler begangen hat, interpretiert er die Verhandlung vor dem Hintergrund eines "Was wäre gewesen, wenn ich ein höheres Angebot gemacht hätte?" und reagiert entsprechend unzufrieden ( Galinsky et al. 2002). ...
Chapter
Transaktionen im Anlagen- und Projektgeschäft werden in der Regel durch Verhandlungen zwischen Bestellerorganisation und Anbieterunternehmen beschlossen. Die Ergebnisse dieser Verhandlungen determinieren daher in einem großen Maße die Profitabilität des Auftrags für den Anbieter und den Nutzen bzw. die Qualität der Problemlösung für den Besteller. Das vorliegende Kapitel gibt einen Überblick über die Charakteristika der Verhandlungssituation im Anlagen- und Projektgeschäft hinsichtlich zeitlicher, organisationaler und inhaltlicher Gesichtspunkte. Daran anschließend wird die gängige Modellbildung zur Betrachtung von Verhandlungssituationen vorgestellt, indem distributive und integrative Verhandlungen unterschieden werden. Weiterhin werden die üblichen Maße zur Beurteilung des Erfolgs von Verhandlungen diskutiert: Verhandlungsgewinn, -effizienz, und -zufriedenheit. Den Schwerpunkt des Kapitels bildet die Betrachtung von Einflussfaktoren auf Verhandlungen, die in statische Kontext- und personelle Faktoren sowie dynamische Determinanten, d. h. psychologische und Interaktionsprozesse, gegliedert werden können. Diese werden sowohl in ihren Charakteristika und Effekten dargestellt als auch anhand der gängigen theoretischen Blickwinkel erklärt. Den Abschluss des Kapitels bildet ein Abschnitt, der sich den konkreten Vorbereitungen widmet, die eine Verhandlungspartei vornehmen kann, um Verhandlungen im Projekt- und Anlagengeschäft möglichst zu ihren Gunsten zu beeinflussen.
Article
Profit maximization requires that decision makers assess marginal profits. We demonstrate that decision makers often confound marginal profits with changes in average profits (e.g., changes in return-on-investment). This results in systematic deviations from profit maximization where decision makers forgo profit-enhancing investments that reduce average profits or engage in loss-enhancing investments that decrease average losses. In other words, average profit becomes an anchor by which new investments are assessed. We conduct two decision-making experiments that show this bias and demonstrate it is pronounced when average profit data are accessible or task-relevant. Moreover, we find within-subject effects across experiments, which helps demonstrate the mechanism that invokes the bias. Copyright © 2013 John Wiley & Sons, Ltd.
Article
In this study, we examined real‐world sales negotiations by collecting data in collaboration with a large Taiwanese eyeglasses company. We found, as has been established previously, that higher first offers predict higher company profits and that the impact of high opening offers can be muted by greater customer awareness of prices at other stores. When we investigated a more qualitative outcome, customers’ perceptions of service quality, a different set of predictors emerged. Our results indicate that salespeople who spent more time introducing the products and services were perceived by the customers as providing higher service quality, but this effect only occurred for those salespeople who reported high levels of job satisfaction. Also, price reduction by salespeople did not improve customer satisfaction. Our results indicate that customer satisfaction does not require negotiated price concessions, but rather depends on extensive interaction with salespeople who are happy in their work. This is the first study to show that negotiator job satisfaction can affect important negotiation outcomes.
Article
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This paper examines whether earning a college or graduate degree in a recession or an economic boom has lasting effects on job satisfaction. Across three studies, well-educated graduates who entered the workforce during economic downturns were more satisfied with their current jobs than those who entered during more prosperous economic times. Study 1 showed that economic conditions at college graduation predicted later job satisfaction even after accounting for different industry and occupational choices. Study 2 replicated these results and found that recession-era graduates were more satisfied with their jobs both early and later in their careers and even when they earned less money. A third cross-sectional study showed that people who entered the workforce in bad economies were less likely to entertain upward counterfactuals, or thoughts about how they might have done better, and more likely to feel grateful for their jobs, both of which mediated the relationship between economic conditions at workforce entry and job satisfaction. While past research on job satisfaction has focused largely on situational and dispositional antecedents, these results suggest that early workforce conditions also can have lasting implications for how people affectively evaluate their jobs.
Article
In negotiations, people tend to perceive a deadline as more detrimental to themselves than to their opponents. This phenomenon is termed myopic perception. The present research proposes that myopic perception can be understood as a result of an anchoring effect due to the question order used in probing the perception of a deadline. When people estimate deal prices before rating the influence of a deadline, their judgements are anchored on their negotiation outcomes, making their perception egocentric, which leads to myopic perception. As a result, myopic perception was hypothesized to be reduced by reversing the above question order to change the respondents' judgement anchor from negotiation outcomes to negotiation procedures. In Study 1, myopic perception disappeared when participants rated the general influence of a deadline before estimating deal price in a negotiation scenario. In Study 2, pairs of participants negotiated under a tight deadline. Myopic perception of a deadline was manipulated before the negotiation. Dyads without myopic perception had a smaller discrepancy in reservation price. However, myopic perception had no effect on impasse rates or final deal prices. The results are discussed with respect to behavioural forecasting and practical implications of myopic perception.
Data
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This paper examines whether earning a college or graduate degree in a recession or an economic boom has lasting effects on job satisfaction. Across three studies, well-educated graduates who entered the workforce during economic downturns were more satisfied with their current jobs than those who entered during more prosperous economic times. Study 1 showed that economic conditions at college graduation predicted later job satisfaction even after accounting for different industry and occupational choices. Study 2 replicated these results and found that recession-era graduates were more satisfied with their jobs both early and later in their careers and even when they earned less money. A third cross-sectional study showed that people who entered the workforce in bad economies were less likely to entertain upward counterfactuals, or thoughts about how they might have done better, and more likely to feel grateful for their jobs, both of which mediated the relationship between economic conditions at workforce entry and job satisfaction. While past research on job satisfaction has focused largely on situational and dispositional antecedents, these results suggest that early workforce conditions also can have lasting implications for how people affectively evaluate their jobs.
Article
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With the growth of e-commerce and e-markets, there is an increasing potential for the use of software agents to negotiate business tasks with human negotiators. Guided by design science methodology, this research prescribes and validates a win-win seeking negotiation agent using strategies of "simultaneous-equivalent offers" and "delayed acceptance" and compares their effects against the use of conventional sequential-single offer and immediate acceptance strategies. To evaluate the alternate strategies, a negotiation agent system was implemented and an experiment was conducted in which 110 agent-human dyads negotiated over a four-issue online purchase task. Our results indicate that the proposed agent strategies can enhance the economic performance of the negotiated outcome (counterpart agreement ratio, individual utility, joint utility, and the distance to Pareto-efficient frontier) and maintain the human counterparts' positive perceptions toward the outcome and the agent. The findings confirm the efficacy of the proposed design and showcase an innovative system to facilitate e-commerce transactions.
Article
At work, sources of anxiety abound. Individuals worry about the quality of their work, their job security, and impressing their bosses. At the same time, many managers induce anxiety, incidentally or deliberately, in an effort to motivate their employees. Until now, the study of anxiety in organizations has been surprisingly sparse. Previous anxiety research has focused on anxiety as a personality trait. In contrast, I focus on state anxiety, an unpleasant emotional state triggered by novelty and the potential for adverse consequences, which has profound effects on cognition and behavior. Across three chapters, I examine the intrapersonal experience and interpersonal effects of state anxiety. Using a variety of methods, including survey, archival, and experimental data, I test the influence of anxiety on negotiations, advice taking, emotional reappraisal, and high-pressure performance. In Chapter 1, I find that anxious negotiators tend to make low first offers, exit prematurely, and ultimately obtain worse outcomes. In Chapter 2, I find that feeling anxious leads individuals to rely more heavily on advice, even when the advice is obviously bad. These effects are mediated by low self-efficacy; Feeling anxious lowers self-efficacy, which causes negotiators to exit negotiations and causes individuals to rely more heavily on others' advice. Finally, in Chapter 3, I investigate a counterintuitive strategy to contend with the harmful effects of anxiety: reappraising anxiety as excitement. I find that, compared to the intuition to calm down or reduce anxiety, reappraising pre-performance anxiety as excitement primes an opportunity mindset (as opposed to a threat mindset) and improves subsequent performance across public and private performance tasks.
Research
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Pazarlık, Açılış Teklifleri, Alış-veriş pazarlıkları, Bilişsel Zafiyetler
Article
Negotiation researchers have conducted a large number of experimental lab studies to identify the factors that affect negotiation outcomes, but it remains unclear whether those results can be generalized to real-world negotiations. To explore this question, we analyzed the dynamic international iron ore annual negotiations that took place from 2005 to 2009. We found evidence that supports two important findings from previous experiments. Specifically, we focused on the impact of negotiators’ best alternatives and first offers on negotiation prices using multiple case study analysis. We found that iron ore prices increased more when the gap between the previous year's negotiated price and the price on the alternative spot market, a public market in which commodities are traded for immediate delivery, was larger, which suggested that buyers were sensitive to the strength of this alternative, supporting the literature on the role of alternatives. We also found that the first offer price significantly influenced the final price. Our findings extend two important experimental findings from the negotiation literature to large-scale business negotiations in the real world.
Book
Cambridge Core - International Relations and International Organisations - International Negotiation - by Ho-Won Jeong
Article
The use of agents in negotiations is ubiquitous. Little is known, however, about the divergent psychological experiences of agents and principals in negotiations and their potential downstream consequences. The current research investigated how one’s role in a negotiation (as a principal or an agent) affects feelings of control, and how these feelings determine subjective value. In Studies 1 and 2, participants were randomly assigned to role‐play principals or agents in deal‐making negotiations. In both studies, agents reported feeling more control than principals, and control positively predicted the subjective value derived from the negotiation. In Studies 3 and 4, experimentally enhancing feelings of control influenced subjective value for principals. These findings point to the potential psychological costs of using agents. The findings advance research on subjective value in negotiations and highlight the critical role of control in principal–agent relationships.
Article
This paper analyses how the knowledge shared between employees and suppliers within a private enterprise social network affects process improvement. Data was collected from internal documents, and the internal and external enterprise social networks used by an international insurance company; the average cycle time for handling 8494 claims and 3240 messages posted on the internal and external social networks was analysed. Social network analysis techniques were combined with principal component analysis and structural equation modeling, and the results demonstrate that the knowledge shared within the internal and external social network can explain 35.10% of process improvement variability, while the knowledge shared within the internal social network explains 89.90% of external social network variability. The analysis also demonstrates that: (i) the knowledge shared among employees positively affects process improvement; (ii) the knowledge shared among suppliers negatively affects process improvement; and (iii) the knowledge shared among employees positively affects the knowledge shared among supply chain members. These findings have theoretical and practical implications. They extend the literature in the knowledge management and information management field by offering empirical evidence of how the knowledge shared through an enterprise social network affects business process improvement, using the objective data provided by Yammer. They also provide a strategic tool for managers that will allow them to better understand how they can use the enterprise social network for business processes improvement.
Article
This research investigates the role of financial literacy on initiating and achieving a favorable negotiation outcome in an employment context. With a goal of improving long-term financial well-being, extant research examines whether increasing a person's understanding of basic financial concepts (“financial literacy”) improves his/her financial decision-making. The current research proposes broader effects of financial literacy via negotiation behavior. We follow prior research to measure financial literacy both objectively (as the accurate assessment of basic financial concepts, “financial knowledge”) and subjectively (as confidence in the application of basic financial skills and concepts, “financial confidence”). In a series of studies engaging students from undergraduate business courses and adults recruited from an online crowdsourcing service, this research examines the relationship between these measures of financial literacy and (a) the likelihood of initiating a negotiation and (b) the likely outcome from a negotiation, if initiated. Results suggest that financial confidence impacts participants’ willingness to engage in negotiation, while financial knowledge impacts the level of participants’ first offer. These findings suggest financial literacy has important implications for career advancement and compensation, as well as the successful management of interpersonal communications, even in fields not traditionally thought of as focusing on numerical reasoning skills.
Article
Purpose - Our goal is to examine counterfactual thinking as a key mediator of the effects of failed recovery (vs. failed delivery) on negative electronic word-of-mouth (eWOM). We further investigate the effectiveness of using recovery co-creation in minimizing customers’ counterfactual thinking. Design/methodology/approach - This research includes textual analysis of online reviews (Study 1) and three scenario-based experiments (Studies 2, 3a, and 3b). In addition to using item-response scales, we analyze negative online reviews and participants’ open-ended responses to capture their counterfactual thinking. Findings - Failed recovery (vs. failed delivery) increases counterfactual thinking, which in turn increases negative eWOM. These mediating effects of counterfactual thinking are consistent across textual analyses and experimental studies, as well as across different measures of counterfactual thinking. Counterfactual thinking also impacts customer anger in experiments; however, anger alone does not explain the effects of failed recovery on negative eWOM. Counterfactual thinking can be minimized by co-created recovery, especially when it is used proactively. Practical implications - Our findings demonstrate the detrimental effects of counterfactual thinking and offer managerial insights into co-creation as a strategy to minimize customers’ counterfactual thinking. We also highlight the importance and ways of tracking counterfactual thinking in digital outlets. Originality/value - We contribute to counterfactual thinking and service recovery research by demonstrating the effects of failed recovery on counterfactual thinking that in turn impacts negative eWOM and offering a novel way to measure its expression in online narratives. We provide guidance on how to utilize co-creation in the service recovery process to minimize counterfactual thinking.
Article
Precise asking-prices (e.g., $249,800), compared with round ones (e.g., $250,000), are stronger anchors, leading buyers to counter closer to the asking-price. This ‘precision effect’ is driven by (i) higher evaluation of the seller's competence, and (ii) buyers using a finer-grained numerical scale when the asking-price is precise compared with round. But are buyers more susceptible to precise anchors, the more they take the seller's perspective? If so, what are the underlying mechanisms leading to this increased susceptibility? We examine the potential moderating role of trait (Experiment 1) and manipulated (Experiment 2) perspective-taking on the price precision effect and its underlying mechanisms. We test the prediction that the more buyers take the seller's perspective, the more they will evaluate a precise-opening seller as competent, which in turn will increase buyers' susceptibility to precise prices (H1). We further test two competing predictions regarding the moderating role (H2a) of perspective-taking versus lack thereof (H2b) on buyers' use of a finer-grained numerical scale when countering a precise asking-price. Results revealed that precise asking-prices lead to counteroffers closer to the asking-price. This price precision effect was driven by the scale granularity, but not the perception of seller's competence mechanism. Further, perspective-taking did not moderate the price precision effect. Exploratory analyses revealed that perspective-taking leads to higher perception of seller's competence, which in turn leads to counteroffers that are closer to the asking-price. Overall, both price precision and perspective-taking shape counteroffers (but not in an interaction), making the two factors important in negotiation processes.
Article
A central question in public conflict resolution is how to obtain better negotiation outcomes. Previous work in this area has mainly focused on objective outcome and has been limited to the comparison-based subjective outcome. The results of a scenario questionnaire and a laboratory simulated negotiation revealed two different mechanisms of forming subjective outcome of negotiation: one by comparing the profit with different criteria, and the other by assessing negotiators' feelings during the negotiation process. Mediation analysis, moderated mediation analysis, and moderation analysis verified that when comparison information was presented, the evaluation of negotiators' profit mediated the effect of negotiators' profit on subjective outcome. When the comparison information was not presented, negotiators' feelings during the process of negotiation predicted the subjective outcome of negotiation, and, simultaneously, negotiators could not evaluate their profit properly. The implication for negotiation subjective outcome, individual subjective well-being, and future direction was also discussed.
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In this article, we attempt to distinguish between the properties of moderator and mediator variables at a number of levels. First, we seek to make theorists and researchers aware of the importance of not using the terms moderator and mediator interchangeably by carefully elaborating, both conceptually and strategically, the many ways in which moderators and mediators differ. We then go beyond this largely pedagogical function and delineate the conceptual and strategic implications of making use of such distinctions with regard to a wide range of phenomena, including control and stress, attitudes, and personality traits. We also provide a specific compendium of analytic procedures appropriate for making the most effective use of the moderator and mediator distinction, both separately and in terms of a broader causal system that includes both moderators and mediators. (46 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Three experiments tested whether counterfactual events can serve as primes. The evidence supports the hypothesis that counterfactuals prime a mental simulation mind-set that leads people to consider alternatives. Exposure to counterfactual scenarios affected person perception judgments in a later, unrelated task and this effect was distinct from semantic construct priming. Moreover, these effects were dependent on the availability of salient possible outcomes in the person perception task. Direction of the counterfactual comparison, upward or downward, did not moderate any of the effects, providing evidence that the process of thinking counterfactually, and not the content of the counterfactuals, was responsible for the priming effects. These experiments also provide evidence that the effects of mind-set accessibility, similar to semantic construct accessibility, are limited by the applicability of the primes to the later judgments. Implications for the nature of priming effects are discussed.
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Five studies examined D. Kahneman and A. Tversky's (see record 1986-21899-001) hypothesis that events become more "normal" and generate weaker reactions the more strongly they evoke representations of similar events. In each study, Ss were presented with 1 of 2 versions of a scenario that described the occurrence of an improbable event. The scenarios equated the a priori probability of the target event, but manipulated the ease of mentally simulating the event by varying the absolute number of similar events in the population. Depending on the study, Ss were asked to indicate whether they thought the event was due to chance as opposed to (a) an illegitimate action on the part of the benefited protagonist, or (b) the intentional or unintentional misrepresentation of the probability of the event. As predicted, the fewer ways the events could have occurred by chance, the less inclined Ss were to assume that the low-probability event occurred by chance. The implications of these findings for impression-management dynamics and stereotype revision are discussed. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Counterfactuals generated by victims of traumatic events were examined to elucidate their significance for the coping process. In Study 1, respondents were interviewed 4-7 years after the loss of their spouse or child in a motor vehicle accident. In Study 2, respondents were interviewed at 3 weeks and 18 months following the death of their child from Sudden Infant Death Syndrome. Across both studies, (a) counterfactuals were commonly reported; (b) the focus of counterfactuals was typically on one's own (in)actions, rather than on the behavior of others; (c) the more frequently respondents were undoing the event, the more distress they reported; and (d) this relation held after controlling for more general ruminations. These field studies demonstrate that even in situations that lack the highly mutable circumstances described in scenario research, people coping with traumatic events appear unhindered in their ability to generate counterfactuals. Theoretical implications, with an emphasis on field studies of undoing, are discussed.
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The “winner's curse” occurs in competitive situations when a successful buyer finds that he or she has paid too much for a commodity of uncertain value. This study provides an experimental demonstration of the winner's curse, and identifies factors that affect the existence and magnitude of this bidding abnormality. In an auction setting, two factors are shown to affect the incidence and magnitude of the winner's curse: (1) the degree of uncertainty concerning the value of the item up for bid and (2) the number of competing bidders. Increasing either factor will increase the range of value estimates and bids, making it more likely that the winning bidder will overestimate the true value of the commodity and thus overbid.
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Three studies examined the motivational implications of thinking about how things could have been worse. It was hypothesized that when these downward counterfactuals yield negative affect, through consideration of the possibility of a negative outcome, motivation to change and improve would be increased (the wake-up call). When downward counterfactuals yield positive affect, through diminishing the impact of a potentially negative outcome, motivation to change and improve should be reduced (the Pangloss effect). Results from three studies supported these hypotheses. Studies 1 and 2 showed that a manipulation of the counterfactual made about an investment influenced decisions toward that investment. Study 3 showed that students’ academic motivation was influenced by a manipulation of the type of downward counterfactual they made after an exam and that affect mediated the relationship between the counterfactual and motivation.
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Counterfactual thinking involves the imagination of non-factual alternatives to reality. We investigated the spontaneous generation of both upward counterfactuals, which improve on reality, and downward counterfactuals, which worsen reality. All subjects gained $5 playing a computer-simulated blackjack game. However, this outcome was framed to be perceived as either a win, a neutral event, or a loss. "Loss" frames produced more upward and fewer downward counterfactuals than did either "win" or "neutral" frames, but the overall prevalence of counterfactual thinking did not vary with outcome valence. In addition, subjects who expected to play the game again made more upward counterfactuals and were less satisfied with the outcome than were subjects who did not expect to play again. However, once subjects saw the cards from which they could have selected had they "hit" again (two winning cards and two losing cards), all subjects generated primarily upward counterfactuals and showed a corresponding decrease in satisfaction. These results implicate both cognitive and motivational factors in the generation of counterfactuals and tell us something about the functional value of counterfactual thinking: downward counterfactuals provide comfort; upward counterfactuals prepare one for the future.
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Counterfactual thoughts ("might-have-been" reconstructions of past outcomes) may serve an affective function (feeling better) and a preparative function (future improvement). Three studies showed that counterfactuals varying in their direction and structure may differentially serve these 2 functions. Direction influenced affect such that downward (vs upward) counterfactuals caused more positive affect. Direction influenced intentions such that upward (vs downward) counterfactuals heightened intentions to perform success-facilitating behaviors. Both direction and structure influenced performance on an anagram task such that upward and additive (vs downward and subtractive) counterfactuals engendered greater improvement. These findings suggest that people can strategically use downward counterfactuals to make themselves feel better and upward and additive counterfactuals to improve performance. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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The theory of downward comparison posits that persons experiencing negative affect can enhance their subjective well-being through comparison with a less fortunate other, the process occurring on either a passive or active basis. The present author discusses the basic principle of downward comparison and its corollaries and suggests that these represent the motivational process for phenomena observed in several areas of social psychology. Evidence is considered from studies of the fear-affiliation effect, choice of others for social comparison, scapegoating, projection, aversive environmental events and attraction toward others, social prejudice, hostile aggression, and humor. It is shown that downward comparison principles encompass empirical evidence from these areas, account for nonreplications as well as confirmatory findings, and provide a theoretical basis for the relation among the various phenomena. (111 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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We propose that people imagine alternatives to reality (counterfactuals) in assessing the casual role of a prior event. This process of mental simulation (D. Kahneman and A. Tversky, 1982) is used to derive novel predictions about the effects of default events on causal attribution. A default event is the alternative event that most readily comes to mind when a factual event is mentally mutated. The factual event is judged to be causal to the extent that its default undoes the outcome. In Experiment 1, a woman was described as having died from an allergic reaction to a meal ordered by her boss. When the boss was described as having considered another meal without the allergic ingredient, people were more likely to mutate his decision and his causal role in the death was judged to be greater than when the alternative meal was also said to have the allergic ingredient. In Experiment 2, a paraplegic couple was described as having died in an auto accident after having been denied a cab ride. People perceived the cabby's refusal to take the couple as a stronger cause of the deaths when his taking the couple would have undone the accident than when it would have not have. We conclude that an adequate theory of causal judgment requires an understanding of these counterfactual simulations. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Counterfactuals are mental representations of alternatives to the past and produce consequences that are both beneficial and aversive to the individual. These apparently contradictory effects are integrated into a functionalist model of counterfactual thinking. The author reviews research in support of the assertions that (a) counterfactual thinking is activated automatically in response to negative affect, (b) the content of counterfactuals targets particularly likely causes of misfortune, (c) counterfactuals produce negative affective consequences through a contrast-effect mechanism and positive inferential consequences through a causal-inference mechanism, and (d) the net effect of counterfactual thinking is beneficial.
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Many decisions are based on beliefs concerning the likelihood of uncertain events such as the outcome of an election, the guilt of a defendant, or the future value of the dollar. Occasionally, beliefs concerning uncertain events are expressed in numerical form as odds or subjective probabilities. In general, the heuristics are quite useful, but sometimes they lead to severe and systematic errors. The subjective assessment of probability resembles the subjective assessment of physical quantities such as distance or size. These judgments are all based on data of limited validity, which are processed according to heuristic rules. However, the reliance on this rule leads to systematic errors in the estimation of distance. This chapter describes three heuristics that are employed in making judgments under uncertainty. The first is representativeness, which is usually employed when people are asked to judge the probability that an object or event belongs to a class or event. The second is the availability of instances or scenarios, which is often employed when people are asked to assess the frequency of a class or the plausibility of a particular development, and the third is adjustment from an anchor, which is usually employed in numerical prediction when a relevant value is available.
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Three studies examined the effects of expectancy violation and outcome valence on spontaneous counterfactual thinking. In Study 1, prior expectations and outcome valence were varied orthogonally in a vignette. More counterfactuals were generated after failures and unexpected outcomes. Also, more additive than subtractive counterfatuals were found after failure, particularly unexpected failure, and more subtractive than additive counterfactuals were found after unexpected success. Evidence for the generality of these results was obtained in Study 2, in which counterfactuals were assessed after students' real-life exam performances. In Study 3, the authors further assessed nonspontaneous counterfactuals, which were shown to differ in number and structure from spontaneous counterfactuals. Discussion centers around antecedents to spontaneous counterfactual thinking and comparisons to research on spontaneous causal attributions.
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Two experiments suggested differential determinants of the activation versus content of counterfactual thinking. Activation refers to whether counterfactuals consciously come to mind and was assessed by thought-listing and response-latency measures. Content refers to which antecedent forms the basis of the counterfactual and was assessed using categorical codings of thought-listings. Counterfactual activation was facilitated by negative as opposed to positive outcomes, and this effect was mediated by affective experience. Expectancy violation did not influence counterfactual activation. Normality (whether an outcome was preceded by exceptional versus normal events) had no effect on activation, but it did influence content in such a way that counterfactuals more often mutated exceptional than normal antecedents. These findings are consistent with a functionalist depiction of counterfactual thinking.
Article
Counterfactual intensity, the strength with which counterfactuals are experienced, influenced the magnitude of affective and preparative reactions. Intensity influenced reactions when counterfactual numbers were held constant for samples of participants' actual experiences (Study 1) and contributed significantly to responses over counterfactual numbers (Study 2) and reaction times (Study 3) after performing laboratory tasks. This was found when participants spontaneously generated counterfactuals (Study 2), and when participants responded to counterfactual statements (Study 3). As upward counterfactuals became intense, so did greater preparation and worse moods; as downward counterfactuals became intense, so did better moods and lesser preparation. Intense moods also conversely influenced the intensity of counterfactuals (Study 3). Conceptual and methodological implications and possibilities for future research are discussed. Copyright © 2000 John Wiley & Sons, Ltd.
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Presents a theory of norms and normality and applies the theory to phenomena of emotional responses, social judgment, and conversations about causes. Norms are assumed to be constructed ad hoc by recruiting specific representations. Category norms are derived by recruiting exemplars. Specific objects or events generate their own norms by retrieval of similar experiences stored in memory or by construction of counterfactual alternatives. The normality of a stimulus is evaluated by comparing it with the norms that it evokes after the fact, rather than to precomputed expectations. Norm theory is applied in analyses of the enhanced emotional response to events that have abnormal causes, of the generation of predictions and inferences from observations of behavior, and of the role of norms in causal questions and answers. (3 p ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Close counterfactuals are alternatives to reality that "almost happened." A psychological analysis of close counterfactuals offers insights into the underlying representation of causal episodes and the inherent uncertainty attributed to many causal systems. The perception and representation of causal episodes is organized around possible focal outcomes, evoking a schema of causal forces competing over time. A distinction between 2 kinds of assessments of outcome probability is introduced: dispositions, based on causal information available prior to the episode, and propensities, based on event cues obtained from the episode itself. The distinction is critical to the use of almost, which requires the attribution of a strong propensity to the counterfactual outcome. The final discussion focuses on characteristic differences between psychological and philosophical approaches to the analysis of counterfactuals, causation, and probability. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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The impact of outcome controllability on the direction of counterfactual thoughts (reconstructions of past outcomes based on "might have been"alternatives) was examined in two laboratory experiments. Counterfactual direction reflects the distinction between upward counterfactuals (focusing on how things could have been better) and downward counterfactuals (focusing on how things could have been worse). Previous research has shown that upward counterfactuals are more frequent after failure, even though consideration of downward counterfactuals is affectively self-enhancing. Two studies showed that outcome controllability affects counterfactual direction: Upward counterfactuals were more frequent following controllable outcomes, whereas downward counterfactuals were more frequent following uncontrollable outcomes. Paralleling past research, upward counterfactuals were more frequent after failure, whereas downward counterfactuals were more frequent after success. These findings are consistent with an emerging functional theory of counterfactual thinking.
Article
In recent years, basic research and theory on social comparison activities has been applied to understanding the coping processes of people undergoing stressful events. These investigations have both elucidated coping and highlighted issues that need reconsideration in traditional social comparison frameworks. These issues include the predominant motives that guide social comparison activity; the role of cognitive processes in the creation of targets and the selection of dimensions for evaluation; the limits imposed on available social comparison information by stressful or victimizing circumstances; the role of similarity in social comparisons under threat; the inherent meaning of upward and downward comparisons; and the divergence of evaluative versus information-seeking comparative activities. Implications for theoretical integration and for understanding coping and social support are discussed.
Article
Norm theory (Kahneman & Miller, 1986) identifies factors that determine the ease with which alternatives to reality can be imagined or constructed. One assumption of norm theory is that the greater the availability of imagined alternatives to an event, the stronger will be the affective reaction elicited by the event. The present two experiments explore this assumption in the context of observers' reactions to victims. It was predicted that negative outcomes that strongly evoked positive alternatives would elicit more sympathy from observers than negative outcomes that weakly evoked positive alternatives. The ease of counterfactual thought was manipulated in the first experiment by the spatial distance between the negative outcome and a positive alternative, and in the second experiment by the habitualness of the actions that precipitated the victimization. Consistent with norm theory, subjects recommended more compensation for victims of fates for which a positive alternative was highly available. Implications of the results for various types of reactions to victims are discussed.
Article
Previous work has shown that counterfactual thinking, or the imagination of alternatives to reality, yields an affective contrast effect: Thinking about how things could have been better (an upward counterfactual) brings about negative affect, and thinking about how things could have been worse (a downward counterfactual) brings about positive affect. The present research documents affective assimilation: under certain conditions, upward counterfactuals lead to positive affect and downward counterfactuals lead to negative affect. In two studies, participants recalled recent autobiographical events, and were instructed to make specific types of counterfactuals about those events. Results from two studies showed that a focus on a vividly imagined counterfactual simulation (termed an experiential mode) yields affective assimilation, and an evaluative focus on the factual event (termed an evaluative mode) yields affective contrast.
Article
The mental processes by which people construct scenarios, or examples, resemble the running of the simulation model. Mental simulation appears to be used to make predictions, assess probabilities and evaluate casual statements. A particular form of simulation, which concerns the mental undoing of certain events, plays an important role in the analysis of regret and close calls. Two rules of mental undoing are proposed. According to the downhill rule, people undo events by removing surprising or unexpected occurrences. According to the focus rule, people manipulate the entities on which they focus. The implications of the rules of undoing and mental simulation to the evaluation of scenarios are discussed. (Author)
Article
Most experiments in social psychology are considered defective because the investigators, lacking social perspective, set up their problems within the culture of their own communities. The writer has no sympathy for the controversy between the individual and the social approaches. The individual is regarded as basic, and any valid psychological principle should apply to the individual, alone, in a group, or in relation to his whole culture. Throughout psychology, in perception, in judgment, in affectivity, etc., the frame of reference is shown to be an important determinant of experience. Variations in culture are shown to be variations in frames of reference common to various groups. Social frames of reference (social norms, i.e. values, customs, stereotypes, conventions, etc.) are regarded first as stimuli which meet the individual in his associations with others and then become interiorized. The process of establishing a social norm is illustrated experimentally in an unstable perceptual situation (autokinetic phenomenon). Observing alone, the individual establishes his own frame of reference, which is modified in the direction of conformity when he observes in a group. Observing first in a group, frames of reference are set up which determine subsequent reports when the individual observes alone (illustrating the factual basis for the contentions that supra-individual qualities arise in group situations). Social values in relation to personal needs are discussed in the light of this experiment. A final chapter describes "human nature" as dependent upon the norms peculiar to the individual's group. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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[discuss] the role played by counterfactual thinking in belief formation, regret, and decision making generally / [explore] a deeper understanding of counterfactual thinking—its origins, constraints, and consequences / summarize the implications of our analysis, giving special attention to conceptual problems remaining and to empirical prospects beckoning / explore possible links between counterfactual thought and superstitions superstitious beliefs and counterfactual thought / biased memory for events that almost did not happen / anticipatory regret: trying to avoid a mental kicking (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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According to most economists, economic behavior is a rational undertaking. It is assumed that we know what we want, strive to get it, and accept the verdict of the market for our effort. In this profound and provocative work, Richard Thaler challenges the received economic wisdom by revealing many of the paradoxes that abound even in the most painstakingly conducted transactions. He presents literate, challenging, and often funny examples of the various anomalies that confront and confound people in everyday economic life—such as "the winner's curse," a dynamic wherein winners become losers by miscalculating the value of a purchase made in a common value auction. He also demonstrates that markets do not always operate with the traplike efficiency we impute to them. Thaler argues that recognizing these sometimes topsy-turvy facts of economic behavior will compel economists, as well as those who live by their lights in our jobs and organizations, to adopt a more balanced view of human nature, one reflected in Adam Smith's professed belief that despite our selfishness, there is something within our natures that prompts us to enjoy, even promote, the happiness of others. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Attempted to provide the theoretical basis for a tripartite linkage between counterfactuals (CFs), the hindsight bias (HB), and causal attributions (CAs). 100 Ss participated in Exp 1, designed to show that a manipulation of CF availability can influence causal and hindsight judgments. 85 Ss participated in Exp 2, in which the effect of outcome information on likelihood estimates to document the HB in its traditional between-Ss guise and the mediating role of CAs were assessed. Exp 3 integrated the findings of Exp 1 and 2 to combine the between-Ss HB and the standard CF. Results of Exps 1 and 3 showed that manipulations of CF thinking heighten the HB. All 3 experiments suggest that a facilitative effect of CFs on the HB is mediated by causal inference. Overall results indicate that negative outcomes are more likely to trigger sensemaking cognitions (e.g., CF and CA), thereby increasing the HB, than are positive outcomes. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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This article examines the ability of the individual differences, motivational, and cognitive approaches of negotiation to account for empirical research on dyadic negotiation. Investigators have typically focused on objective, economic measures of performance. However, social-psychological measures are important because negotiators often do not have the information necessary to make accurate judgments of the bargaining situation. Negotiators' judgments are biased, and biases are associated with inefficient performance. Personality and individual differences appear to play a minimal role in determining bargaining behavior; their impact may be dampened by several factors, such as homogeneity of S samples, situational constraints, and self-selection processes. Motivational and cognitive models provide compelling accounts of negotiation behavior. A psychological theory of negotiation should begin at the level of the individual negotiator and should integrate features of motivational and cognitive models. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Article
Conducted 2 experiments with a total of 100 male undergraduates in a laboratory bargaining simulation to investigate 3 hypotheses about the effect of 1 bargainer's concessions on the concessions of the opposing bargainer. Results indicate that Ss conceded more when the programed opponent made small concessions than when the opponent made large concessions (Exp I). The effect of the opponent's concessions on S's concessions appeared to be mediated by S's aspiration level. S's aspiration level, concessions, and perception of the opponent's strength were affected by the degree of time pressure (Ss were limited to 5-8 offers) and the S's knowledge of the opponent's payoffs as well as by the opponent's offers (Exp II). Discrepancies with previous studies are discussed. (16 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Counterfactual thoughts of "what might have been" have been shown to influence emotional responses to outcomes. The present investigation extends this research by proposing a model of how categorical cutoff points, or arbitrary values that impose qualitative boundaries on quantitative outcomes, induce counterfactual thoughts and influence individuals' satisfaction. In particular, just making a cutoff for a category is hypothesized to elicit downward counterfactual comparisons, boosting satisfaction, whereas just missing a cutoff prompts upward counterfactual thoughts, decreasing satisfaction. In some circumstances, this asymmetry can reverse the usual relationship between objective outcome and satisfaction, causing people who do objectively better to feel worse than those they outperform. This hypothesis is supported by the results of 1 naturalistic study and 2 scenario experiments. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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ending up with the wrong causal inference / unnecessary negative affect / costly changes in behaviors [hindsight bias, foreseeability, self-handicapping] / costly maintenance of dysfunctional behaviors (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Article
Hypothesized that later occurrences in a series of events tend to evoke counterfactual alternatives more strongly and, hence, tend to be blamed more for ensuing negative outcomes than do earlier occurrences. In Study 1, Ss played the role of students whose task it was to read an article and then to identify the questions they thought a teacher might include on a test of it. Consistent with the hypothesis, Ss were less critical of a teacher whose test questions did not match their own when the teacher generated his or her questions before they did than when he or she generated them after they did. In Study 2, Ss played the role of teachers whose task it was to select questions to be answered by a student. Presumably, because of a greater fear of being blamed, Ss selected easier questions when their selection of questions occurred after the student had finished studying than when it occurred before the student began studying. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Article
We demonstrate that counterfactuals prime a mental simulation mind-set in which relevant but potentially converse alternatives are considered and that this mind-set activation has behavioral consequences. This mind-set is closely related to the simulation heuristic (Kahne-man & Tversky, 1982). Participants primed with a counterfactual were more likely to solve the Duncker candle problem (Experiment 1), suggesting that they noticed an alternative function for one of the objects, an awareness that is critical to solving the problem. Participants primed with a counterfactual were more likely to simultaneously affirm the consequent and select the potentially falsifying card, but without selecting the irrelevant card, in the Wason card selection task, suggesting that they were testing both the stated conditional and its reverse (Experiment 2). The increased affirmations of the consequent decreased correct solutions on the task—thus, the primed mind-set can bias or debias thought and action. Finally, Experiment 3 provides further evidence that counterfactual primes increase the accessibility of relevant alternatives. Counterfactual primes attenuated the confirmation bias in a trait hypothesis testing context by increasing the selection of questions designed to elicit hypothesis-disconfirming answers, but without increasing the selection of neutral questions. The nature of priming effects and the role of counterfactual thinking in biasing and debiasing thought and action are discussed.