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An Analytical Process Model of Two-Party Negotiations

Author

Listed:
  • P. V. (Sundar) Balakrishnan

    (Business Administration Program, University of Washington, MS/XB-05, Canyon Park Business Center, 2201 26th Avenue, SE, Bothell, Washington 98021)

  • Jehoshua Eliashberg

    (Department of Marketing, The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

Abstract

There has been a call to investigate the negotiation process (Gale [Gale, D. 1986. Bargaining and competition part I: Characterization. Econometrica 54(4) 785--806.], Shubik [Shubik, M. 1982. Game Theory in the Social Sciences: Concepts and Solutions. M. I. T. Press, Boston, MA.]), as it is felt that this would yield important insights beyond those obtained by outcome-oriented theories (Roth [Roth, A. E. 1979. Axiomatic Models of Bargaining. Springer-Verlag.]). This paper proposes a new analytical process model that captures both behavioral and economic aspects related to two-party negotiations. The proposed model, inspired by Pruitt's (Pruitt, D. G. 1981. Negotiation Behavior. Academic Press, New York.) work, explicitly incorporates concepts which are both relevant and crucial, such as the negotiators' power, concession points, aspiration level, limit, and time pressure. Based on this process model, it is possible to predict (1) conditions under which agreements will not be reached despite the existence of a zone of agreement, (2) conditions under which agreements will be reached, and (3) the patterns of the negotiators' offers and counteroffers.

Suggested Citation

  • P. V. (Sundar) Balakrishnan & Jehoshua Eliashberg, 1995. "An Analytical Process Model of Two-Party Negotiations," Management Science, INFORMS, vol. 41(2), pages 226-243, February.
    • Handle: RePEc:inm:ormnsc:v:41:y:1995:i:2:p:226-243
    DOI: 10.1287/mnsc.41.2.226
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    Citations

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    Cited by:

    1. Luiz de Mello, 2009. "Avoiding the Value Added Tax," Public Finance Review, , vol. 37(1), pages 27-46, January.
    2. Patton, Charles & Balakrishnan, P.V. (Sundar), 2010. "The impact of expectation of future negotiation interaction on bargaining processes and outcomes," Journal of Business Research, Elsevier, vol. 63(8), pages 809-816, August.
    3. Ayman M. Wasfy & Yasser A. Hosni, 1998. "Two-Party Negotiation Modeling: An Integrated Fuzzy Logic Approach," Group Decision and Negotiation, Springer, vol. 7(6), pages 491-518, November.
    4. Michael Filzmoser & Patrick Hippmann & Rudolf Vetschera, 2016. "Analyzing the Multiple Dimensions of Negotiation Processes," Group Decision and Negotiation, Springer, vol. 25(6), pages 1169-1188, November.
    5. G.E. Kersten & S.J. Noronha, 1997. "Supporting International Negotiation with a WWW-Based System," Working Papers ir97049, International Institute for Applied Systems Analysis.
    6. Atul Bhandari & Nicola Secomandi, 2011. "TECHNICAL NOTE---Revenue Management with Bargaining," Operations Research, INFORMS, vol. 59(2), pages 498-506, April.
    7. Sascha Alavi & Johannes Habel & Marco Schwenke & Christian Schmitz, 2020. "Price negotiating for services: elucidating the ambivalent effects on customers’ negotiation aspirations," Journal of the Academy of Marketing Science, Springer, vol. 48(2), pages 165-185, March.
    8. Patton, Charles & Balakrishnan, P.V. (Sundar), 2012. "Negotiating when outnumbered: Agenda strategies for bargaining with buying teams," International Journal of Research in Marketing, Elsevier, vol. 29(3), pages 280-291.
    9. Michael Filzmoser & Rudolf Vetschera, 2008. "A Classification of Bargaining Steps and their Impact on Negotiation Outcomes," Group Decision and Negotiation, Springer, vol. 17(5), pages 421-443, September.
    10. Rajdeep Grewal & Gary Lilien & Sundar Bharadwaj & Pranav Jindal & Ujwal Kayande & Robert Lusch & Murali Mantrala & Robert Palmatier & Aric Rindfleisch & Lisa Scheer & Robert Spekman & Shrihari Sridhar, 2015. "Business-to-Business Buying: Challenges and Opportunities," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 2(3), pages 193-208, September.
    11. Joydeep Srivastava & Dipankar Chakravarti & Amnon Rapoport, 2000. "Price and Margin Negotiations in Marketing Channels: An Experimental Study of Sequential Bargaining Under One-sided Uncertainty and Opportunity Cost of Delay," Marketing Science, INFORMS, vol. 19(2), pages 163-184, October.
    12. Jeff S. Johnson & Ravipreet S. Sohi, 2016. "Understanding and resolving major contractual breaches in buyer–seller relationships: a grounded theory approach," Journal of the Academy of Marketing Science, Springer, vol. 44(2), pages 185-205, March.
    13. Lenz, Annika & Kaya, Muhammed & Melzer, Philipp & Schmid, Andreas & Witt, Josepha & Schoop, Mareike, 2019. "Data quality and information loss in standardised interpolated path analysis: Quality measures and guidelines," Hohenheim Discussion Papers in Business, Economics and Social Sciences 08-2019, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    14. Balakrishnan, P.V. (Sundar) & Gómez, Juan Camilo & Vohra, Rakesh V., 2011. "The Tempered Aspirations solution for bargaining problems with a reference point," Mathematical Social Sciences, Elsevier, vol. 62(3), pages 144-150.

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