The impact of concession patterns on negotiations: When and why decreasing concessions lead to a distributive disadvantage

• Main Authors: TEY, Kian Siong, SCHAERER, Michael, MADAN, Nikhil, SWAAB, Roderick I.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2021
• Subjects: negotiations; concessions; reservation price; offers; signaling; distributive; Organizational Behavior and Theory
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/6735; https://ink.library.smu.edu.sg/context/lkcsb_research/article/7734/viewcontent/Tey__Schaerer__Madan____Swaab_OBHDP2021_decreasing_concession_patterns_in_negotiations.pdf
• Institution: Singapore Management University

We propose that making a series of decreasing concessions (e.g., $1,500–1,210–1,180–1,170) signals that negotiators are reaching their limit and that this results in a negotiation disadvantage for offer recipients. Although we find that most negotiators do not use this strategy naturally, seven stud...