Experimental research on bilateral negotiation

Jesus Rios, Stefan Strecker, Jinbeak Kim, Simone Ludwig, Eva Chen
Two hundred undergraduate and graduate students from the two English universities in Montreal participated in our experiments. Subjects participated in a contract negotiation between an artist and an entertainment company. They negotiated as representatives of the respective sides. The contract was comprised of 4 fixed issues to negotiate: number of promotional concerts, number of new songs, royalties for CDs and contract signing bonus. Each issue had a fixed number of options to choose from. A
more » ... s to choose from. A complete offer consists of selecting one option per issue. In total, there were 240 possible contracts. The experiments were conducted in a lab setting in which the interaction between the negotiation parties was computer-mediated via a web browser. Each dyad had one hour to negotiate a contract by exchanging messages and complete offers for acceptance. Participants were also asked to fill in a pre and post negotiation questionnaire. Each participant was paid $24 cash for a 3 hours session. We have used a 2x2 factorial experiment design. One factor represents the availability of analytical support (AS) and the other the availability of quantitative information about the represented preferences. We note that we are not considering negotiations in which one of the sides has AS and the other has not. Thus, when AS is available or preference information is quantitatively given, it is for both parties in a negotiation. Each combination of one of the two levels per factor creates the four experimental treatments shown in Figure 1. Subjects were matched randomly in pairs and assigned to one of the experimental treatments. In total, we have obtained results for 100 negotiations, 24 correspond for treatment T3, 23 for T4 and 21 for T6 and T1 each. Figure 1: Experimental treatments Dagstuhl Seminar Proceedings 06461 Negotiation and Market Engineering