Parties Beyond The Table: The Effects of External Parties’ Presence and Veto Right On Negotiators’ Decisions

Authors:

Abstract: Previous research has predominately focused on negotiators’ decision-making at the bargaining table while overlooking that the negotiation agreements may generate externalities on external parties who are not involved in the negotiations. A recent line of research investigated such situations and showed that negotiators tended to overlook the external parties’ interests: they were more successful in discovering the integrative potential with their negotiation counterpart than for the external parties. Given this, the current research seeks to investigate conditions under which negotiators consider the external parties’ interests and reconcile the interests of parties both at and beyond the table. We investigate the effects of the presence and veto of the external parties on negotiators’ decisions. Two experiments showed that when the external parties had a veto over the final agreements, negotiators considered the external parties’ interests more and achieved better outcomes for all parties related to the negotiations.

Track: NEG

Keywords: negotiation, externalities, veto, presence