Does paying back pay off? Effects of reciprocity and economic outcomes on trust emergence in negotiations

Keywords: negotiations, trust emergence, reciprocity, counterpart behavior, negotiation outcomes

Abstract: In two studies (n1 = 359; n2 = 455), we investigated the effects of reciprocal counterpart behavior and economic negotiation outcomes on interpersonal trust in dyadic negotiations. Moreover, counterparts’ power was considered as moderating factor. Using an experimental vignette approach, participants in both studies read a negotiation scenario, and imagined having conducted this negotiation. As part of the scenarios, we manipulated (a) positive (high, low) and (b) negative reciprocal counterpart behavior (escalating, high, low), (c) the economic negotiation outcome (advantageous, equal, disadvantageous; only Study 2), and (d) counterpart’s bargaining power (high, low; only Study 1). Results show that positive reciprocal counterpart behavior lead to higher trust in the counterpart, whereas escalating negative reciprocal counterpart behavior and disadvantageous economic outcomes reduced trust. However, this negative effect of escalating counterpart behavior was reduced when counterpart power was high. Implications of these results are relevant for sustainable trust development and long-term business relationships.