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The Effect of Friendship on Personal Business Transactions

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  • Jennifer J. Halpern

    (Cornell University)

Abstract

A laboratory study examined effects of friendship on expectations of pricing in personal business transactions. Friends expect to pay more but charge less for a variety of commodities than do strangers. Remarkably, without discussion, friends agree on prices for commodities, whereas strangers do not. The result was replicated in a second study and extended to other commodities. The effect may be due to cognitive scripts for transactions with friends.

Suggested Citation

  • Jennifer J. Halpern, 1994. "The Effect of Friendship on Personal Business Transactions," Journal of Conflict Resolution, Peace Science Society (International), vol. 38(4), pages 647-664, December.
    • Handle: RePEc:sae:jocore:v:38:y:1994:i:4:p:647-664
    DOI: 10.1177/0022002794038004003
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    References listed on IDEAS

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    1. Shiller, Robert J & Boycko, Maxim & Korobov, Vladimir, 1991. "Popular Attitudes toward Free Markets: The Soviet Union and the United States Compared," American Economic Review, American Economic Association, vol. 81(3), pages 385-400, June.
    2. Roth, Alvin E & Murnighan, J Keith, 1982. "The Role of Information in Bargaining: An Experimental Study," Econometrica, Econometric Society, vol. 50(5), pages 1123-1142, September.
    3. Carroll, John S. & Bazerman, Max H. & Maury, Robin, 1988. "Negotiator cognitions: A descriptive approach to negotiators' understanding of their opponents," Organizational Behavior and Human Decision Processes, Elsevier, vol. 41(3), pages 352-370, June.
    4. Kenneth E. Boulding, 1973. "Love, Fear and the Economist," Challenge, Taylor & Francis Journals, vol. 16(3), pages 32-39, July.
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    Cited by:

    1. Leonard Greenhalgh & Deborah I. Chapman, 1998. "Negotiator Relationships: Construct Measurement, and Demonstration of Their Impact on the Process and Outcomes of Negotiation," Group Decision and Negotiation, Springer, vol. 7(6), pages 465-489, November.
    2. Eva-Maria Pesendorfer & Sabine T. Koeszegi, 2007. "Social Embeddedness in Electronic Negotiations," Group Decision and Negotiation, Springer, vol. 16(4), pages 399-415, July.
    3. Jennifer Halpern, 1997. "The Transaction Index: A Method for Standardizing Comparisons of Transaction Characteristics Across Different Contexts," Group Decision and Negotiation, Springer, vol. 6(6), pages 557-572, December.
    4. Qi Li & Ni Liang & Eldon Y. Li, 2018. "Does friendship quality matter in social commerce? An experimental study of its effect on purchase intention," Electronic Commerce Research, Springer, vol. 18(4), pages 693-717, December.
    5. Jaime Ramirez-Fernandez & Jimena Y. Ramirez-Marin & Lourdes Munduate, 2018. "I Expected More from You: The Influence of Close Relationships and Perspective Taking on Negotiation Offers," Group Decision and Negotiation, Springer, vol. 27(1), pages 85-105, February.
    6. Leonard Greenhalgh & Roderick Gilkey, 1997. "Clinical Assessment Methods in Negotiation Research: The Study of Narcissism and Negotiator Effectiveness," Group Decision and Negotiation, Springer, vol. 6(4), pages 289-316, July.
    7. Rudolf Vetschera & Guenther Kainz, 2013. "Do Self-Reported Strategies Match Actual Behavior in a Social Preference Experiment?," Group Decision and Negotiation, Springer, vol. 22(5), pages 823-849, September.

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