Does Closing a Package Close a Deal or Close a Door? Issue Packaging and Agenda Setting in Integrative Negotiations

Keywords: negotiations, issue packaging, agenda setting, mental closing, integrative agreements

Abstract: The present research investigates when and why packaging multiple issues into smaller subsets helps achieving integrative agreements. We predict that subset issue packaging will help parties accomplish more mutually beneficial outcomes than negotiating all issues at the same time, albeit only when parties do not close the package (i.e., conclude with an agreement) before negotiating the next one. Two experiments tested these predictions. When parties packaged issues into smaller subsets and negotiated issue packages throughout the negotiations, they achieved higher economic outcomes than parties negotiating the entire set of issues together and parties packaging the issues only at the beginning or from the middle phase of the negotiation (Experiment 1). However, when parties had to reach an agreement on one issue package before proceeding with the next one, this issue-packaging advantage disappeared. Mediation analyses demonstrate that parties’ integrative judgment accuracy and their logrolling behavior accounted for the issue-packaging effect sequentially.