Thinking Beyond the Negotiation Table: Impacts of Externalities on Negotiators’ Perceptions, Behaviors, and Outcomes

Abstract: Over the past decades, there has been a growing awareness that the reconciliation of diverse interests between individuals or groups must be thoroughly addressed at all levels of society. Despite the societal significance of the reconciliation of interests across parties, the majority of negotiation research has limited its focus on processes that affect the resolution of conflicts at the immediate bargaining table, and it has ignored the fact that social conflicts being resolved between the negotiating parties may impact the interests of other parties who are absent from the table (i.e., externalities arising from negotiations). Given this, the current research seeks to investigate parties’ perceptions and decisions in negotiations with externalities. Building on research from social science and social psychology, it is proposed that the reconciliation of diverse interests of stakeholders beyond the negotiation table is a crucial challenge for negotiators at the table. In a series of five experiments (N = 601), we systematically investigated whether, when, and why negotiators will take the external parties’ interests into account when making decisions.

Keywords: negotiation externalities, proximity effect, (inter)dependence