Purpose This paper aims to review and synthesize the existing literature related to negotiation complexity and provides an integrative model to systematically identify and examine factors contributing to negotiation complexity and how they affect negotiating parties’ behaviors and economic and subjective outcomes. Design/methodology/approach The approach was to combine relevant literature from negotiation in general and from negotiation complexity in particular and to develop and support an integrative model of complexity in real-world negotiations. Findings The literature on negotiation complexity and previous analytical frameworks are reviewed from a cross-disciplinary perspective. Based on the integrative review, an integrative model of negotiation complexity is proposed for identifying important complexity contributory factors. Six contributory factors are distinguished based on the three negotiation components – negotiation task, dynamic variables of negotiators and negotiation context. Their effects on negotiation complexity are examined and discussed with respect to four complexity dimensions (i.e. informational and computational, procedural, social and strategic dimensions). Finally, the effects of negotiation complexity on parties’ behaviors and outcomes are examined based on previous theoretical and empirical research and practical tools for managing negotiation complexity are delineated. Originality/value The integrative review and conceptualization of negotiation complexity are helpful for gaining a better understanding of negotiation complexity and its management in various real-world domains.
Five experiments (N = 1275) investigate how negotiators cognitively process proposals and outcomes when a broad set of issues are negotiated simultaneously. Based on seminal research on mental accounting, we predict that negotiators strive to reduce complexity in multi-issue negotiations by mentally creating subsets of issues (i.e., topical mental accounting; Thaler, 1999; Tversky & Kahneman, 1981). We propose that such mental accounting processes play out as a double-edged sword: creating mental accounts on issues that include the integrative potential within subsets of issues will help negotiators to reduce complexity and explore beneficial tradeoffs. By contrast, creating mental accounts on issues that scatter the integrative potential between subsets of issues will impede the discovery of win-win agreements. Experiment 1 explored the cognitive process of mental parsing (i.e., creating cognitive subsets of issues) in multi-issue negotiations. Experiments 2 and 3 investigated how the way the issue subsets were created impacted parties’ perceptions, behaviors, and outcomes. Experiments 4 and 5 sought to investigate a cognitive tool (i.e., integrated outcome editing, Thaler, 1999) that helps parties to overcome detrimental effects arising from the mental accounting process. Overall, our findings highlight when, how, and why mental accounting helps versus hurts negotiators in complex multi-issue negotiations.
Psychological research on negotiation is shaped by the fundamental belief that social interaction between negotiators is unconditionally beneficial to negotiation outcomes. Over a series of four experiments, we provide the first empirical test of this belief. Drawing on an experimental paradigm established in group performance research, we compare interactive negotiations with non-interactive, nominal negotiation methods, allowing us to identify process gains or losses in different negotiation settings. Our first three experiments show considerable benefits of social interaction in both distributive (Experiments 1 and 2) and integrative (Experiment 3) negotiations, independent of motivational and coordinative challenges. However, our fourth experiment demonstrates that process gains in negotiations are not unconditional. After adding explicit transaction costs to a distributive price negotation, interactive negotiators could no longer surpass their nominal counterparts in terms of negotiation outcomes. On the contrary, by embedding the negotiation in a series of different tasks, we were able to show that longer negotiation durations for interactive negotiators led to a significantly worse overall task performance compared to nominal negotiators.
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