Getting To Harm: The Underexplored Externalities of Negotiation

Negotiation is usually considered beneficial not just for negotiators but for society. However, research rarely examines the effects of negotiations on external stakeholders, which is surprising since negotiated agreements often have wide-ranging implications. We theorize that negotiations encourage information-sharing, but the effects of this information-sharing depend on the negotiators’ intent. In particular, negotiations can harm external stakeholders in the common situation when negotiators are seeking to privately benefit themselves, meaning that the absence of a negotiation might have been better from a societal standpoint. Supporting this prediction, our studies find empirical support for a moderated mediation model: Negotiating benefits external parties through information-exchange when negotiators have neutral intentions toward external parties, but it hurts external parties through the same mechanism when negotiators seek to benefit themselves at the expense of external parties.