The Lemon Car Game Across Cultures: Evidence of Relational Rationality

Abstract

In cross-cultural business negotiation, culture is known to influence negotiation processes. As a lens to study this effect we deployed the Lemon Car Game, an online negotiation game developed for this purpose (Hofstede et al. in: Proceedings of 39th international simulation and gaming association conference (ISAGA). Technologia, Kaunas, pp 39-46, 2009a; Hofstede et al. in: David, Sichman (eds) Multi-agentbased simulation IX, international workshop, MABS 2008, revised selectedpapers, LNAI 5269. Springer, Berlin, pp 1-16, 2009b). In this article we report the results from the game, obtained from over 800 players from more than 70 countries. We employ several complementary analyses in a mixed-methods approach. Our findings show that to make sense of the players' actions during negotiation, economic rationality falls short. A pan-cultural individual-level analysis of actions and stated intentions also fails to yield a coherent picture. Within countries, however, actions and intentions do cohere, as shown by an ecological country-level factor analysis, from which three factors emerge for the sellers at country level: trustworthiness, opportunism, and fairness. We conclude from these findings that, in this game, players are driven by what we call relational rationality: they are rational from the perspective of the social world in which they live, with interpersonal relationships weighing heavily. Relational rationality changes players' perspective of economic rationality, and thus their observed behaviour in negotiation. Based on this evidence, we extrapolate that relational rationality significantly influences negotiation processes in all cultures.

Promoting Less Complex and More Honest Price Negotiations in the Online Used Car Market with Authenticated Data

“…Nevertheless, we confirm that the revelation of trusted and accurate information, even if this does not occur via the negotiator themselves as in previous research (Citera et al 2005 ; Yu et al 2021 ) but through a third, independent party, increases fact-related honesty and reliability of negotiation conversations. We claim that those findings hold for peer-to-peer negotiations in typical high-value transactions like in the used car market (Paese et al 2003 ; Hofstede et al 2019 ) or for example also in the real estate market (Galinsky et al 2016 ).…”

“…Interestingly, the accessibility of authenticated data did not change such behaviors: aspects of sympathy and expertise were still coming on the table, yet the data could be used to express or confirm one’s own expertise. Following Hofstede et al ( 2019 ) one can confirm that a negotiation is about more than pure economic rationality. Even in an online game environment, the players try to maintain positive relations.…”

“…Thus, buyers of a car can only approximate its true quality based on previous experiences or comparing similar offers and fall behind in negotiations with uncertainty and mistrust. These challenges make the used car market an appropriate area of investigation to understand the dynamics of buyer–seller negotiation behaviors (Paese et al 2003 ; Hofstede et al 2019 ) and measures to overcome information asymmetry. For instance, while it is usually vital to withhold certain information from a prospective buyer (e.g., an accident), it may be essential to disclose information (e.g., whether the car is accident-free).…”

Accelerating Cultural Dimensions at International Companies in the Evidence of Internationalisation

“…Power distance [5,12,14,15,51,[53][54][55][56][57][58][59][60][61][62][63][64][65][66] Individualism/ Collectivism [5,12,14,15,53,54,[56][57][58][59][64][65][66][67][68][69][70][71][72][73][74][75] Masculinity/ Femininity [5,12,14,15,53,54,[56][57][58][59]65,66,...…”

Positive Energy Districts : A pathway toward urban energy transition?

“…More recently, it has been remembered that individuals' decisions are not always based on economically rational deliberations [172] but often on relational rationality (i.e., being rational from the perspective of the social world in which individuals exist, prioritizing interpersonal relationships) [173]. Empirical studies reveal that individuals' behaviors and decisions often deviate from the assumptions of economic rationality and are not always driven by economically reasoned "optimal choice" but rather influenced by different cognitive shortcuts and biases [174], [175], [176], [177], [178].…”