Breaking Precedent: Divergent Effects of Two Primary Tactics for Refuting Negotiation Precedents

Abstract: Negotiators often face the challenge of refuting undesirable precedents. We propose that the two primary tactics for doing so create a critical trade-off. The relevance tactic, arguing one “should not” repeat a deal due to situational differences, preserves relational outcomes like fairness but compromises economic value. Conversely, the legitimacy tactic, arguing one “cannot” repeat a flawed deal, protects economic value but harms relational outcomes. Across five studies (N = 1,475), we examine this trade-off and test a solution. While negotiators intuitively preferred the relevance tactic (Study 1), counterparts perceived it as signaling a lower reservation value (Studies 2–4). The legitimacy tactic protected economic interests but was seen as less fair. Finally, Study 5 identified a solution: pairing the legitimacy tactic with a statement of openness resolved the dilemma, securing economic benefits without incurring relational costs.

Keywords: Negotiation tactic, Precedent, Economic outcome, Relational outcome