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Experimental evidence on the value of time and structure in market negotiations

Author

Listed:
  • Karine Lamiraud

    (ESSEC Business School)

  • Julien Patris

    (Alnylam Pharmaceuticals)

  • Radu Vranceanu

    (ESSEC Business School)

Abstract

This paper reports the results from a multi-attribute market negotiation experiment to study how the structure of the negotiation process influences its efficiency. We found that, conditional on the success of the negotiation, the total value created increased with the time spent negotiating; by working one more minute, negotiators created on average 37 additional value units (1% of the maximal value). However, most of the gains were obtained in the early moments of the negotiation. Using a between-subject design, we analyzed the consequences of (1) guiding negotiations towards early wins, and (2) inviting negotiators to share information about their priority goals. In both treatments, the total value created exceeded the control value by approximately 9% of the maximal value. However, it was essentially the buyer who captured the additional value. Negotiator gender had an impact on the negotiation outcome, with women underperforming compared to men.

Suggested Citation

  • Karine Lamiraud & Julien Patris & Radu Vranceanu, 2023. "Experimental evidence on the value of time and structure in market negotiations," Working Papers hal-03989514, HAL.
    • Handle: RePEc:hal:wpaper:hal-03989514
    Note: View the original document on HAL open archive server: https://essec.hal.science/hal-03989514v2
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    References listed on IDEAS

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    Keywords

    Structured negotiation; Communication; Information sharing; Trust;
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