Beating the Rival but Losing the Game

What is it about?

Decades of negotiations research has emphasized the importance of having alternatives. Negotiators with high-value outside offers tend to have greater power and claim higher values in the focal negotiation. We extend this line of work by proposing that the source of alternatives – that is, who negotiators receive an alternative offer from – can significantly shape their negotiation behavior and outcomes. Specifically, we examine how negotiators’ behavior changes when they face a counterpart who has an offer from their rival.

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Photo by Sebastian Herrmann on Unsplash

Photo by Sebastian Herrmann on Unsplash

Why is it important?

Our findings highlight the importance of considering the existing relationships among actors directly and indirectly involved in a negotiation, reveal a novel motive that can guide negotiators’ behavior and outcomes, and uncover a previously unexplored negotiation strategy. Negotiators often come to the table with the objective of ‘winning the game,’ aiming to claim more value in distributive negotiations. Yet, our findings suggest that this can change when negotiators discover that their counterpart has received an offer from their longstanding rival. Their motivation shifts towards outperforming the rival by securing a deal with the counterpart, leading them to make less aspirational offers and claim less value in final agreements. Consequently, they might succeed in ‘beating the rival’ albeit at the expense of ‘losing the game’ in the current negotiation.

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