IDEAS home Printed from https://ideas.repec.org/a/eee/jobhdp/v151y2019icp34-48.html
   My bibliography  Save this article

The power of phantom alternatives in negotiation: How what could be haunts what is

Author

Listed:
  • Pinkley, Robin L.
  • Conlon, Donald E.
  • Sawyer, John E.
  • Sleesman, Dustin J.
  • Vandewalle, Don
  • Kuenzi, Maribeth

Abstract

We examine the notion of a Phantom BATNA – a negotiation alternative that may or may not materialize – and its impact on a current negotiation. Across three studies, we investigate the impact of such alternatives on negotiation, and compare them to when negotiators have a certain BATNA, when they have no BATNA, or when they are provided no information whatsoever regarding a BATNA. We demonstrate that perceptions of power mediate the effects of BATNA likelihood on the performance-related outcomes (final settlements or counter-offers) of negotiators. We establish these effects when the alternative has a known or an unknown likelihood of occurring. Additionally, BATNA likelihood influences the extent to which negotiators mention the possibility of an alternative to their counterpart during the negotiation. Based on our investigation, we offer BATNA likelihood as an important dimension of BATNA influence that can enhance theoretical and practical understanding, and stimulate future research.

Suggested Citation

  • Pinkley, Robin L. & Conlon, Donald E. & Sawyer, John E. & Sleesman, Dustin J. & Vandewalle, Don & Kuenzi, Maribeth, 2019. "The power of phantom alternatives in negotiation: How what could be haunts what is," Organizational Behavior and Human Decision Processes, Elsevier, vol. 151(C), pages 34-48.
    • Handle: RePEc:eee:jobhdp:v:151:y:2019:i:c:p:34-48
    DOI: 10.1016/j.obhdp.2018.12.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0749597817300547
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.obhdp.2018.12.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Moore, Don A. & Cain, Daylian M., 2007. "Overconfidence and underconfidence: When and why people underestimate (and overestimate) the competition," Organizational Behavior and Human Decision Processes, Elsevier, vol. 103(2), pages 197-213, July.
    2. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    3. Pinkley, Robin L. & Neale, Margaret A. & Bennett, Rebecca J., 1994. "The Impact of Alternatives to Settlement in Dyadic Negotiation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 57(1), pages 97-116, January.
    4. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    5. Sondak, Harris & Bazerman, Max H., 1991. "Power balance and the rationality of outcomes in matching markets," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(1), pages 1-23, October.
    6. Peter H. Farquhar & Anthony R. Pratkanis, 1993. "Decision Structuring with Phantom Alternatives," Management Science, INFORMS, vol. 39(10), pages 1214-1226, October.
    7. Kagel, John H. & Kim, Chung & Moser, Donald, 1996. "Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs," Games and Economic Behavior, Elsevier, vol. 13(1), pages 100-110, March.
    8. Daniel Ellsberg, 1961. "Risk, Ambiguity, and the Savage Axioms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 75(4), pages 643-669.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sleesman, Dustin J., 2019. "Pushing through the tension while stuck in the mud: Paradox mindset and escalation of commitment," Organizational Behavior and Human Decision Processes, Elsevier, vol. 155(C), pages 83-96.
    2. Brady, Garrett L. & Inesi, M. Ena & Mussweiler, Thomas, 2021. "The power of lost alternatives in negotiations," Organizational Behavior and Human Decision Processes, Elsevier, vol. 162(C), pages 59-80.
    3. Daisung Jang & Hyeran Choi & Jeffrey Loewenstein, 2021. "Integration Through Redefinition: Revisiting the Role of Negotiators’ Goals," Group Decision and Negotiation, Springer, vol. 30(5), pages 1113-1131, October.
    4. Hart, Einav & Schweitzer, Maurice E., 2022. "When we should care more about relationships than favorable deal terms in negotiation: The economic relevance of relational outcomes (ERRO)," Organizational Behavior and Human Decision Processes, Elsevier, vol. 168(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    2. Wu, Haixia & Ge, Yan & Li, Jianping, 2023. "Uncertainty, time preference and households’ adoption of rooftop photovoltaic technology," Energy, Elsevier, vol. 276(C).
    3. Jacobs Martin, 2016. "Accounting for Changing Tastes: Approaches to Explaining Unstable Individual Preferences," Review of Economics, De Gruyter, vol. 67(2), pages 121-183, August.
    4. Zahra Murad & Martin Sefton & Chris Starmer, 2016. "How do risk attitudes affect measured confidence?," Journal of Risk and Uncertainty, Springer, vol. 52(1), pages 21-46, February.
    5. David Cesarini & Magnus Johannesson & Patrik K. E. Magnusson & Björn Wallace, 2012. "The Behavioral Genetics of Behavioral Anomalies," Management Science, INFORMS, vol. 58(1), pages 21-34, January.
    6. Lunn, Pete, 2011. "The Role of Decision-Making Biases in Ireland's Banking Crisis," Papers WP389, Economic and Social Research Institute (ESRI).
    7. Hammond, Peter J & Zank, Horst, 2013. "Rationality and Dynamic Consistency under Risk and Uncertainty," The Warwick Economics Research Paper Series (TWERPS) 1033, University of Warwick, Department of Economics.
    8. Grieco, Daniela & Hogarth, Robin M., 2009. "Overconfidence in absolute and relative performance: The regression hypothesis and Bayesian updating," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 756-771, October.
    9. Matthias Sutter & Martin G. Kocher & Daniela Glätzle-Rützler & Stefan T. Trautmann, 2013. "Impatience and Uncertainty: Experimental Decisions Predict Adolescents' Field Behavior," American Economic Review, American Economic Association, vol. 103(1), pages 510-531, February.
    10. Zimper, Alexander, 2009. "Half empty, half full and why we can agree to disagree forever," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 283-299, August.
    11. Hiroki Nishimura & Efe A. Ok & John K.-H. Quah, 2017. "A Comprehensive Approach to Revealed Preference Theory," American Economic Review, American Economic Association, vol. 107(4), pages 1239-1263, April.
    12. Manuel Ramos-Francia and Santiago García-Verdú, 2017. "On the relationship between macroprudential policy and other policies," BIS Papers chapters, in: Bank for International Settlements (ed.), Macroprudential policy frameworks, implementation and relationships with other policies, volume 94, pages 239-255, Bank for International Settlements.
    13. Oren Bar-Gill & Christoph Engel, 2018. "How to Protect Entitlements: An Experiment," Journal of Law and Economics, University of Chicago Press, vol. 61(3), pages 525-553.
    14. Peter D. Lunn, 2013. "Telecommunications Consumers: A Behavioral Economic Analysis," Journal of Consumer Affairs, Wiley Blackwell, vol. 47(1), pages 167-189, April.
    15. Mario GRAZIANO & Daniele SCHILIRÒ, 2011. "Rationality And Choices In Economics: Behavioral And Evolutionary Approaches," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 2(2), pages 182-195.
    16. Lisa A. Robinson & James K. Hammitt, 2013. "Behavioral economics and the conduct of benefit–cost analysis: towards principles and standards," Chapters, in: Scott O. Farrow & Richard Zerbe, Jr. (ed.), Principles and Standards for Benefit–Cost Analysis, chapter 10, pages 317-363, Edward Elgar Publishing.
    17. Astrid Gamba & Anna Bottasso, 2019. "Consumer inertia in energy markets: Insights from behavioral economics," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2019(3), pages 113-130.
    18. Christopher P. Chambers & Federico Echenique & Alan D. Miller, 2023. "Decreasing Impatience," American Economic Journal: Microeconomics, American Economic Association, vol. 15(3), pages 527-551, August.
    19. Daniele Pennesi, 2017. "Uncertain discount and hyperbolic preferences," Theory and Decision, Springer, vol. 83(3), pages 315-336, October.
    20. Soo Hong Chew & Junjian Yi & Junsen Zhang & Songfa Zhong, 2016. "Education and anomalies in decision making: Experimental evidence from Chinese adult twins," Journal of Risk and Uncertainty, Springer, vol. 53(2), pages 163-200, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jobhdp:v:151:y:2019:i:c:p:34-48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/obhdp .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.