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A study of computer-supported negotiation : Mode of communication, incentive scheme, and decision support tools

University of British Columbia

This paper examines the effects of mode of communication (computer-mediated versus face-to-face), incentive scheme (divisional versus mixed), and the availability of a decision support tool that calculates the optimal solutions on the outcome and process of negotiations. An experiment was conducted in which subjects were involved in two-person bilateral bargaining in a transfer pricing setting. Subjects played the role of either the Marketing Manager (the buyer division) or the Production Manager (the seller division); their task was to negotiate the transfer price and quantity of an intermediate commodity. Thirty-two negotiation dyads were randomly assigned to one of the experimental treatments so that there was an equal number of dyads in each condition. A negotiation support system (NSS) was used in all the experimental sessions. The system provides subjects with various decision support tools as well as an electronic linkage which allows the transmission of both textual and graphical information. Three main dependent variables were measured: (1) negotiation outcome, (2) communication and process variables, and (3) perception on communication efficiency and co-operation. Results showed that in the presence of an NSS, the difference in experimental treatments led to no differences on the negotiation outcome. More exchanges of remarks were found in the face-to-face condition but there was no evidence that the communication medium resulted in a more efficient and co-operative negotiation. A mixed-incentive scheme, however, was found to enhance communication efficiency and promote co-operative behaviour in negotiations.

Thesis/Dissertation

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2009-01-09

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http://hdl.handle.net/2429/3444

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University of British Columbia

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