Does Expanding the Pie spoil the Cake? How and Why the number of Issues affect Behaviors and Outcomes in Integrative Negotiation

Keywords: integrative negotiation, number of issues, trade-offs, joint outcomes, Pareto efficiency

Abstract: How does adding issues affect integrative negotiations? There are two opposing positions in the literature: One emphasizes advantages of more issues because more issues increase opportunities for trade-offs. The other emphasizes disadvantages because more issues also increase complexity. In the present research, we reconcile these competing positions. In a laboratory experiment we found that 1.) given a constant integrative potential, parties negotiating on a high (vs. low) number of issues made more, but less integrative trade-offs (quantity vs. quality of trade-offs), reached lower joint profits (absolute outcomes) and less Pareto efficient agreements (relative outcomes); 2.) when more issues corresponded with a higher integrative potential parties negotiating on a high (vs. low) number of issues still made more, and less integrative trade-offs, but reached higher joint profits. Nonetheless, they ended up with less Pareto efficient agreements. Mediation analyses showed how negotiators’ cognitive categorization processes accounted for these effects.