Top

Group Decision and Negotiation

Published in:

17-11-2018

Deep Pockets and Poor Results: The Effect of Wealth Cues on First Offers in Negotiation

Authors: Yossi Maaravi, Boaz Hameiri

Published in: Group Decision and Negotiation | Issue 1/2019

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

In this article, we examined the effect of external cues on first offers in negotiation. Specifically, we present the results of three experiments and an internal meta-analysis through which we investigated the relations between buyers’ external characteristics, which serve as cues of economic wealth, including their clothes, cars and country of origin, and sellers’ first offers in negotiation. We found that when external cues indicated wealth, counteroffers were less beneficial to those communicating the cues, resulting in higher first offers by their counterparts. We suggest, and provide empirical evidence, that these effects will emerge as long as the wealth signal is salient and perceived as an indication for the counterpart’s ‘deep pockets’, or ability to pay.

previous article Allocation of Disputable Zones in the Arctic Region

next article Compromise Rules Revisited

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Ambady N, Skowronski JJ (eds) (2008) First impressions. Guilford Press, New York

Babcock L, Laschever S (2009) Women don’t ask: negotiation and the gender divide. Princeton University Press, Princeton

Bahník S, Englich B, Strack F (2017) Anchoring effect. In: Pohl RF (ed) Cognitive illusions: Intriguing phenomena in thinking, judgment and memory, 2nd edn. Routledge, London, pp 223–241

Baron J (2000) Thinking and deciding. Cambridge University Press, Cambridge

Bazerman MH (2001) Smart money decisions: why you do what you do with money (and how to change it for the better). Wiley, New York

Bazerman MH, Neale MA (1992) Negotiating rationally. Free Press, New York

Belle N, Cantarelli P, Belardinelli P (2017) Cognitive biases in performance appraisal: experimental evidence on anchoring and halo effects with public sector managers and employees. Rev Public Pers Adm 37:275–294. https://doi.org/10.1177/0734371X17704891 CrossRef

Bickman L (1974) The social power of a uniform. J Appl Soc Psychol 4:47–61. https://doi.org/10.1111/j.1559-1816.1974.tb02599.x CrossRef

Buelens M, Van Poucke D (2004) Determinants of a negotiator’s initial opening offer. J Bus Psychol 19:23–35. https://doi.org/10.1023/B:JOBU.000 CrossRef

Chapman GB, Johnson EJ (1999) Anchoring, activation, and the construction of values. Organ Behav Hum Decis 79:115–153. https://doi.org/10.1006/obhd.1999.2841 CrossRef

Chin A, Peterson MA (1985) Deep pockets, empty pockets: who wins in Cook County jury trials. Rand Corporation, Santa Monica

Cialdini RB (2009) Influence: science and practice, 5th edn. Pearson Education, Boston

Doob AN, Gross AE (1968) Status of frustrator as an inhibitor of horn-honking responses. J Soc Psychol 76:213–218. https://doi.org/10.1080/00224545.1968.9933615 CrossRef

Englich B, Mussweiler T (2001) Sentencing under uncertainty: anchoring effects in the courtroom. J Appl Soc Psychol 31:1535–1551. https://doi.org/10.1111/j.1559-1816.2001.tb02687.x CrossRef

Evans JSB (2008) Dual-processing accounts of reasoning, judgment, and social cognition. Annu Rev Psychol 59:255–278. https://doi.org/10.1146/annurev.psych.59.103006.093629 CrossRef

Faul F, Erdfelder E, Buchner A, Lang AG (2009) Statistical power analyses using G*Power 3.1: tests for correlation and regression analyses. Behav Res Methods 41:1149–1160. https://doi.org/10.3758/BRM.41.4.1149 CrossRef

Galinsky AD, Mussweiler T (2001) First offers as anchors: the role of perspective-taking and negotiator focus. J Personal Soc Psychol 81:657–669. https://doi.org/10.1037/0022-3514.81.4.657 CrossRef

Galinsky AD, Schaerer M, Magee JC (2017) The four horsemen of power at the bargaining table. J Bus Ind Mark 32:606–611. https://doi.org/10.1108/JBIM-10-2016-0251 CrossRef

Ganzach Y (2000) Judging risk and return of financial assets. Organ Behav Hum Dec 83:353–370. https://doi.org/10.1006/obhd.2000.2914 CrossRef

Gardiner PC, Edwards W (1975) Public values: multiattribute-utility measurement for social decision-making. In: Kaplan MF, Schwarz S (eds) Human judgement and decision processes. Academic Press, New York, pp 1–37

Gillath O, Bahns AJ, Ge F, Crandall CS (2012) Shoes as a source of first impressions. J Res Personal 46:423–430. https://doi.org/10.1016/j.jrp.2012.04.003 CrossRef

Goh JX, Hall JA, Rosenthal R (2016) Mini meta-analysis of your own studies: some arguments on why and a primer on how. Soc Personal Psychol Compass 10:535–549. https://doi.org/10.1111/spc3.12267 CrossRef

John OP, Robins RW (1994) Accuracy and bias in self-perception: individual differences in self-enhancement and the role of narcissism. J Personal Soc Psychol 66:206–219. https://doi.org/10.1037/0022-3514.66.1.206 CrossRef

Johnson M (1927) More maxims of Mark. Privately Printed, Ann Arbor

Kahneman D (2003) A perspective on judgment and choice: mapping bounded rationality. Am Psychol 58:697–720. https://doi.org/10.1037/0003-066X.58.9.697 CrossRef

Kahneman D (2011) Thinking, fast and slow. Farrar, Straus and Giroux, New York

Kraus MW, Keltner D (2009) Signs of socioeconomic status: a thin-slicing approach. Psychol Sci 20:99–106. https://doi.org/10.1111/j.1467-9280.2008.02251.x CrossRef

Kraus MW, Mendes WB (2014) Sartorial symbols of social class elicit class-consistent behavioral and physiological responses: a dyadic approach. J Exp Psychol Gen 143:2330–2340. https://doi.org/10.1037/xge0000023 CrossRef

Kraus MW, Stephens NM (2012) A road map for an emerging psychology of social class. Soc Personal Psychol Compass 6:642–656. https://doi.org/10.1111/j.1751-9004.2012.00453.x CrossRef

Kraus MW, Park JW, Tan JJ (2017) Signs of social class: The experience of economic inequality in everyday life. Perspect Psychol Sci 12:422–435. https://doi.org/10.1177/1745691616673192 CrossRef

Kristensen H, Gärling T (1997) Determinants of buyers’ aspiration and reservation price. J Econ Psychol 18:487–503. https://doi.org/10.1016/S0167-4870(97)00020-2 CrossRef

Lefkowitz M, Blake RR, Mouton JS (1955) Status factors in pedestrian violation of traffic signals. J Abnorm Soc Psychol 51:704–706. https://doi.org/10.1037/h0042000 CrossRef

Loschelder DD, Trötschel R, Swaab RI, Friese M, Galinsky AD (2016) The information-anchoring model of first offers: when moving first helps versus hurts negotiators. J Appl Psychol 101:995–1012. https://doi.org/10.1037/apl0000096 CrossRef

Maaravi Y, Levy A (2017) When your anchor sinks your boat: information asymmetry in distributive negotiations and the disadvantage of making the first offer. Judgm Decis Mak 12:420–429

Maaravi Y, Ganzach Y, Pazy A (2011a) Negotiation as a form of persuasion: arguments in first offers. J Personal Soc Psychol 101:245–255. https://doi.org/10.1037/a0023331 CrossRef

Maaravi Y, Pazy A, Ganzach Y (2011b) Pay as much as you can afford: Counterpart’s ability to pay and first offers in negotiation. Judgm Decis Mak 6:275–282

Malhotra D, Bazerman MH (2007) Negotiating genius. Bantam, New York

Malhotra D, Bazerman MH (2008) Psychological influence in negotiation: an introduction long overdue. J Manag 34:509–531. https://doi.org/10.1177/0149206308316060

Nisbett RE, Wilson TD (1977) The halo effect: evidence for unconscious alteration of judgments. J Personal Soc Psychol 35:250–256. https://doi.org/10.1037/0022-3514.35.4.250 CrossRef

Northcraft GB, Neale MA (1987) Experts, amateurs, and real estate: an anchoring-and-adjustment perspective on property pricing decisions. Organ Behav Hum Dec 39:84–97. https://doi.org/10.1016/0749-5978(87)90046-x CrossRef

Oakes JM, Rossi PH (2003) The measurement of SES in health research: current practice and steps toward a new approach. Soc Sci Med 56:769–784. https://doi.org/10.1016/S0277-9536(02)00073-4 CrossRef

Oesch JM, Galinsky AD (2003) First offers in negotiations: Determinants and effects. Paper presented at the International Association of Conflict Management Meetings (IACM) 16th annual conference, Melbourne

Pinkley RL, Neale MA, Bennett RJ (1994) The impact of alternatives to settlement in dyadic negotiation. Organ Behav Hum Dec 57:97–116. https://doi.org/10.1006/obhd.1994.1006 CrossRef

Pruitt DG, Carnevale PJ (1993) Negotiation in social conflict. Open University Press, Buckingham

Raiffa H, Richardson J, Metcalfe D (2002) Negotiation analysis: the science and art of collaborative decision making. Harvard University Press, Cambridge

Ritov I (1996) Anchoring in simulated competitive market negotiation. Organ Behav Hum Dec 67:16–25. https://doi.org/10.1006/obhd.1996.0051 CrossRef

Shalvi S, Moran S, Ritov I (2010) Overcoming initial anchors: the effect of negotiators’ dispositional control beliefs. Negot Confl Manag R 3:232–248. https://doi.org/10.1111/j.1750-4716.2010.00059.x CrossRef

Sinaceur M, Maddux WW, Vasiljevic D, Nückel RP, Galinsky AD (2013) Good things come to those who wait: late first offers facilitate creative agreements in negotiation. Personal Soc Psychol Bull 39:814–825. https://doi.org/10.1177/0146167213483319 CrossRef

Thompson L (2005) The mind and heart of the negotiator, 3rd edn. Prentice Hall, Upper Saddle River

Todorov A (2017) Face value: the irresistible influence of first impressions. Princeton University Press, PrincetonCrossRef

Todorov A, Mandisodza AN, Goren A, Hall CC (2005) Inferences of competence from faces predict lection outcomes. Science 308:1623–1626. https://doi.org/10.1126/science.1110589 CrossRef

Tversky A, Kahneman D (1974) Judgment under uncertainty: heuristics and biases. Science 185:1124–1131. https://doi.org/10.1126/science.185.4157.1124 CrossRef

Tversky A, Sattath S, Slovic P (1988) Contingent weighting in judgment and choice. Psychol Rev 95:371–384. https://doi.org/10.1037/0033-295X.95.3.371 CrossRef

White SB, Neale MA (1991) Reservation prices, resistance points, and BATNAs: determining the parameters of acceptable negotiated outcomes. Negot J 7:379–388. https://doi.org/10.1111/j.1571-9979.1991.tb00633.x CrossRef

Title: Deep Pockets and Poor Results: The Effect of Wealth Cues on First Offers in Negotiation
Authors: Yossi Maaravi
Boaz Hameiri
Publication date: 17-11-2018
Publisher: Springer Netherlands
Published in: Group Decision and Negotiation / Issue 1/2019
Print ISSN: 0926-2644
Electronic ISSN: 1572-9907
DOI: https://doi.org/10.1007/s10726-018-9599-1

Springer Professional

Abstract

Please log in to get access to your license.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Other articles of this Issue 1/2019

The Dollar Auction Game: A Laboratory Comparison Between Individuals and Groups

Allocation of Disputable Zones in the Arctic Region

Compromise Rules Revisited

Nonlinear Negotiation Approaches for Complex-Network Optimization: A Study Inspired by Wi-Fi Channel Assignment

Combining Social Choice Theory and Argumentation: Enabling Collective Decision Making

A Value-Focused Multiple Participant-Multiple Criteria (MPMC) Decision Support Approach for Public Policy Formulation