Journal of Experimental Social Psychology 87 (2020) 103943

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Journal of Experimental Social Psychology

journal homepage: www.elsevier.com/locate/jesp

Case Report
T
Win-win in distributive negotiations: The economic and relational benefits
of strategic offer framing
⁎
Michael Schaerera, , Martin Schweinsbergb, Nico Thornleyc, Roderick I. Swaabc
a
Singapore Management University, Singapore
b
ESMT Berlin, Germany
c
INSEAD, Singapore

A R T I C LE I N FO A B S T R A C T

Keywords: In distributive negotiations, people often feel that they have to choose between maximizing their economic
Negotiation outcomes (claiming more value) or improving their relational outcomes (having a satisfied opponent). The
First offer present research proposes a conversational strategy that can help negotiators achieve both. Specifically, we show
Framing that using an offer framing strategy that shifts offer recipients' attention to their reservation price (e.g., “How
Satisfaction
does my offer compare to your minimum price?”) leads to both (a) an assimilation effect whereby recipients make
Power
more favorable counteroffers (economic benefit) as well as (b) a contrast effect whereby recipients feel more
Reservation price
satisfied with the negotiation (relational benefit). We find evidence for the effectiveness of this conversational
strategy across four experiments (N = 1522) involving different negotiation contexts (real estate, restaurant
sale) and participant samples (MBAs, sales agents, online participants), and also document negotiator power as
an important boundary condition. Overall, our research suggests that economic and relational benefits do not
have to be mutually exclusive in distributive negotiations, that the perceived extremity of an offer is subjective
and can be strategically influenced, and that assimilation and contrast effects can operate simultaneously when
they relate to separate outcomes.

1. Introduction point scale, t(135) = 14.52, p < 0.001 (see Supplemental Online
Materials).
Negotiation is an inherently economic activity involving the ex- Consistent with the findings from our survey, past research on dis-
change of scarce resources between parties with different interests tributive negotiations shows that strategies which maximize economic
(Pruitt, 1981). For example, in many buyer-seller transactions, sellers gains such as expressing dominant emotions and making ambitious first
want to sell at the highest possible price whereas buyers prefer to pay offers increase negotiators' economic gains but hurt the relationship
the lowest possible price. Yet, negotiation is also an inherently rela- between negotiators (Hart & Schweitzer, 2019; Hüffmeier, Freund,
tional activity. Negotiators want to feel good about themselves, the Zerres, Backhaus, & Hertel, 2014; Schweinsberg, Ku, Wang, & Pillutla,
negotiation process, and their counterpart (Curhan, Elfenbein, & Xu, 2012; Van Kleef & De Dreu, 2010). Moreover, recent research found
2006). A seller may not just care about the final price but also about that negotiators who pushed for more favorable agreements not only
how the buyer treated them during the negotiation. risked greater relational costs during the negotiation, but also under-
Negotiators often assume that maximizing economic gains will hurt mined their counterpart's motivation and productivity afterwards (Hart
their relationships in “distributive” negotiations, which involve com- & Schweitzer, 2019). This research also noted that “softer, more con-
petitive issues where parties' preferences are diametrically opposed. cessionary strategies […] often lead to better affective and relational
Indeed, when we asked 136 individuals to imagine a buyer-seller outcomes” but they “may not lead to high economic outcomes” (p. 3).
transaction and indicate their agreement with the statement “the less Thus, our survey and past research jointly suggest that negotiators as-
money the buyer offers the seller, the less happy the seller will be,” an sume that economic gains and relational outcomes are in conflict and
overwhelming majority (86%) agreed and the overall level of agree- that negotiators should sacrifice their own economic gains to maintain
ment (M = 5.63; SD = 1.31) was well above the midpoint of the 7- the relationship.

⁎
Corresponding author at: Singapore Management University, 50 Stamford Road, 178899, Singapore.
E-mail address: [email protected] (M. Schaerer).

https://doi.org/10.1016/j.jesp.2019.103943
Received 8 July 2019; Received in revised form 6 December 2019; Accepted 15 December 2019
Available online 27 December 2019
0022-1031/ © 2019 Elsevier Inc. All rights reserved.
M. Schaerer, et al. Journal of Experimental Social Psychology 87 (2020) 103943

Based on earlier work showing that economic outcomes and sub- counteroffers and leave them more satisfied with the negotiation.
jective evaluations can be disconnected (e.g., Galinsky, Mussweiler, &
Medvec, 2002; Schaerer, Swaab, & Galinsky, 2015), we propose that 3. Win-win through strategic offer framing
negotiators may be able to win both economically and relationally by
framing their offers strategically. Specifically, we posit that negotiators Negotiation outcomes are typically compared, coded, and evaluated
who make a first offer and shift their counterpart's attention to their relative to reference points (Neale & Bazerman, 1991). A critical re-
reservation price (e.g., “How does my offer compare to the minimum price ference point in negotiations is the reservation price (White, Valley,
you would be willing to accept?”) can receive more favorable counter- Bazerman, Neale, & Peck, 1994), which refers to a negotiator's bottom
offers but also increase their counterpart's satisfaction by shifting their line and helps them determine when to walk away from a negotiation.
attention to a lower reference point. We test this idea in four experi- Negotiators are advised to secure outcomes closer to advantageous re-
ments using different recipient-focus manipulations (exogenously and ference points such as their target price (e.g., their ideal outcome) and
opponent induced), different negotiation scenarios (real estate, res- farther from disadvantageous reference points such as their reservation
taurant sale), and different samples with varying levels of experience price (Thompson, 2011). We propose that the effectiveness of shifting
(MBAs, sales agents, online participants). others' attention to their bottom line relies on two distinct psychological
Our research makes important theoretical contributions. First, we processes–assimilation bias and contrastive evaluation–which in turn
show that economic and relational benefits are not mutually exclusive affect the offer recipient's economic decisions and subjective evalua-
in the context of distributive negotiations and that strategic offer tions.
framing can help negotiators achieve both. This finding extends earlier
research showing that changes in negotiator focus can differentially 3.1. Offer framing and assimilation bias
affect negotiators' deals and evaluations (Galinsky et al., 2002) by de-
monstrating that these insights can also be used as an interpersonal First, we propose that senders who make an offer and shift the re-
negotiation strategy. Moreover, we extend this research by showing cipient's focus to their reservation price create an assimilation bias in the
that negotiators are not naturally inclined to use this strategy and by recipient's counteroffer. For example, when a sender makes the re-
documenting negotiator power as an important boundary condition cipient's reservation price more salient by asking the recipient to ex-
that attenuates (and even reverses) these effects. Second, this research plicitly think about it, recipients anchor on this disadvantageous re-
contributes to the growing stream of research on offer framing in ne- ference point, insufficiently adjust away from this low anchor, and
gotiations (Majer, Troetschel, Galinsky, & Loschelder, 2019) which make less ambitious counteroffers.
examines how different offer frames can elicit greater cooperation. Research has repeatedly shown that salient reference points have
Third, we extend research on judgment and decision making, which pervasive effects on economic decisions by acting as anchors that in-
typically assumes that assimilation and contrast effects tend to be fluence subsequent judgments through a process called assimilation
mutually exclusive (Chapman & Johnson, 1999; Förster, Liberman, & (Tversky & Kahneman, 1974). Assimilation occurs because people in-
Kuschel, 2008) by demonstrating that both processes can operate si- sufficiently adjust away from a salient anchor (Epley & Gilovich, 2006)
multaneously when they pertain to different outcomes. Finally, this by making anchor-consistent information more accessible (Mussweiler
research has practical value because negotiators know few distributive & Strack, 2000) and because anchors can alter people's “mental rulers”
strategies that do not come at either an economic or relational cost. on which they make judgments (Frederick & Mochon, 2012).
Evidence of assimilation has also been documented in negotiations.
2. Outcomes and evaluations in distributive negotiations Indeed, reference points such as alternatives and market information
can be dominant cues that affect decisions in negotiations (Blount,
A central assumption of negotiation research and practice is that Thomas-Hunt, & Neale, 1996). For example, in distributive negotia-
economic outcomes and negotiators' satisfaction are deeply intertwined tions, the value of the first offer is strongly correlated with negotiation
and mutually exclusive in distributive negotiations (Brett & Thompson, outcomes (Gunia, Swaab, Sivanathan, & Galinsky, 2013; Schaerer,
2016; Thompson, Wang, & Gunia, 2010), such that strategies that im- Loschelder, & Swaab, 2016) because negotiators anchor on the value of
prove economic gains hurt relationships, and strategies improving re- the first offer and insufficiently adjust away from it. Thus, an offer
lationships hurt economic gains. Negotiators are therefore often ad- framing strategy whereby the offer sender shifts the recipient's focus on
vised to either claim value or to build relationships (e.g., Keiser, 1988; their reservation price should bias the recipient towards this reference
Thompson, 2011) point, cause less ambitious counteroffers and result in worse negotia-
In contrast to this advice, we propose that claiming more value and tion outcomes.
having a more satisfied opponent do not need to be mutually exclusive.
We base this argument on research suggesting that economic outcomes 3.2. Offer framing and contrast effects
and subjective evaluations are sometimes disconnected, implying that it
is possible to improve both economic gains and relationships (Ames & Second, we propose that the same strategy that causes assimilation
Mason, 2015; Galinsky et al., 2002; Lee & Ames, 2017; Neale & in counteroffers can simultaneously lead to contrast effects in subjective
Bazerman, 1983; Shirako, Kilduff, & Kray, 2015). For example, Lee and evaluations. Contrast effects suggest that “presenting a context stimulus
Ames (2017) found that using constraint-related rationales (“I can't pay changes the adaptation level of the judge so that the perception of the
more”), compared to disparagement rationales (“It's not worth more”), target stimulus is altered” (Mussweiler & Strack, 1999, p. 137). The
increased both accommodating negotiation behavior and trust by the philosopher John Locke (1690) was one of the first to document the
counterpart. Furthermore, Galinsky et al. (2002) showed that negotia- basic logic of the contrast effect; he noted that lukewarm water can feel
tors' outcomes and evaluations are disconnected, such that negotiators cold or hot, depending on whether one's hand has previously touched
who focused on a high anchor reached better deals but were less sa- hot or cold water. More recently, Medvec, Madey, and Gilovich (1995)
tisfied compared to negotiators who focused on a low anchor. showed that Olympic medalists winning bronze medals were more sa-
Building on the idea that outcomes and evaluations may are not tisfied (because they just made the top 3) than those winning silver
always be opposing forces in distributive negotiations, we propose an medals (because they missed gold).
interpersonal offer framing strategy that shifts negotiators' attention to The logic of contrastive judgment demonstrates that most evalua-
their bottom line (i.e., “How does my offer compare to the highest possible tions are relative and that people compare their outcomes with avail-
price you can afford/lowest possible price you're willing to accept?”), which able and salient evaluation standards because objective outcomes are
should cause the offer recipient to both make less ambitious difficult to judge without context (Loewenstein, Thompson, &

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M. Schaerer, et al. Journal of Experimental Social Psychology 87 (2020) 103943

Bazerman, 1989). Similarly, in negotiations people often evaluate their 5. Study 1

outcomes using contextual cues to determine how well they did. For
instance, negotiators with low performance expectations were more Study 1 tested the hypothesis that offer recipients make less ambi-
satisfied with their agreements than those with high expectations tious counteroffers but will be more satisfied when they are asked to
(Oliver, Balakrishnan, & Barry, 1994), and negotiators who compared focus on their reservation price.
their outcome to a high value were less satisfied than those who com-
pared it to a low value (Galinsky et al., 2002). Thus, contrastive com- 5.1. Participants and design
parisons can make people subjectively happier about economically
worse outcomes. Participants were 444 professionals (mean age = 28.81; SD = 2.33;
We predict therefore that when senders make an offer and ask the 34.9% female) enrolled in an MBA program. Participants were ran-
recipient to compare the offer to their reservation price, recipients domly assigned to either a target-focus, reservation price-focus, or
evaluate the sender's offer more positively because the relatively dis- control condition.
advantageous reference point of the reservation price serves as a low
comparison standard. Conversely, when senders make an offer and ask 5.2. Procedure and experimental manipulations
recipients to compare the offer to their target price, a relatively ad-
vantageous reference point that serves as a high comparison standard, Participants received the study invitation via email and completed it
recipients will evaluate the offer as a loss, resulting in less positive online, outside of class. The negotiation was a single-issue distributive
evaluations. Senders are therefore more likely to reap both economic negotiation involving the price of a condominium. Participants were
benefits (more attractive counteroffers) and relational benefits (more sellers (offer recipients) who had to sell a 3-bedroom condo by nego-
satisfied recipients) when asking recipients how their offer compares to tiating with a potential buyer (offer sender). The target price at which
their reservation price rather than their target price or using no framing the condo could sell was $520,000 and their reservation price was
strategy. $380,000 because this was the best offer from another buyer.
To demonstrate the counterintuitive nature of the proposed We adopted a negotiator focus manipulation from past research
strategy, we coded a sample of 152 interactive negotiations amongst (Galinsky et al., 2002). Participants in the target-focus condition were
304 MBA students and found that only very few used a reservation price told “successful negotiators recommend that you should focus on your
framing (N = 4, 1.32% of all negotiators) or a target framing (N = 6, target price during the negotiation” and briefly described their target
1.97% of all negotiators) when making their offers (see Supplemental price and what it meant for their upcoming negotiation. In the re-
Online Materials). To examine what negotiators would do when they servation price-focus condition, participants read that “successful nego-
need to choose between these two frames, we presented three different tiators recommend that you should focus on your walk-away price
samples of MBA students (N = 234), undergraduates (N = 136), and during the negotiation” and briefly described their reservation price
MTurk participants (N = 107) with a recruiting negotiation scenario and what it meant for the upcoming negotiation. To test whether a
and asked them whether they preferred to use a target price or re- reservation price frame would improve outcomes above and beyond
servation price framing. The overwhelming majority preferred the using no strategy, we also added a control condition in which partici-
target price framing (MBAs: 68.8%; Undergraduates: 84.6%; MTurk: pants did not receive any additional information or prompts.
88.8%). When we asked the undergraduate sample why they preferred Next, all participants were informed that the potential buyer offered
the target frame over the reservation price frame, two-thirds (60.1%) $450,000 and then completed our dependent measures.
mentioned that they did so due to relational concerns (e.g., not of-
fending their counterpart, being polite). Together, these findings show 5.3. Measures
that negotiators are not naturally inclined to use a reservation price
framing, even when it is an explicit option. Despite the fact that most 5.3.1. Counteroffer
people were worried about offending the other party with a reservation Participants were asked “What is your counteroffer to the buyer?”
price frame, our studies ironically show that it is exactly this frame (and and entered their offer in a textbox. Lower counteroffers are more fa-
not their preferred target frame) that increases their opponent's sa- vorable for the buyer.
tisfaction.
5.3.2. Satisfaction
Our second dependent measure was participants' satisfaction with
4. Overview of the Present Research the offer they received. Participants indicated how happy, satisfied, and
pleased they were with the offer (1 = not at all; 7 = very much). The
We tested our predictions across four experiments. In Study 1, MBA three items were combined (α = 0.90).
students participated in a real estate negotiation and tested the pre-
diction that shifting offer recipients' focus on their reservation price 5.4. Results
would cause both less ambitious counteroffers and more positive eva-
luations of the offer they received. Study 2 sought to replicate this effect Because one of the dependent measures was numeric, we used a
with both online participants (Study 2a) and experienced negotiators two-step data cleaning approach to reduce the influence of extreme
(Study 2b) when the reservation price focus was induced by the values for counteroffers. First, a research assistant unfamiliar with the
counterpart. Finally, Study 3 aimed to replicate the effect in a different research corrected decimal errors. Because we did not restrict partici-
context and established recipient power as a boundary condition. pants' counteroffers to a specific range to better capture their intuitive
We calculated required cell size based on the conservative as- behavior, some participants used different units (e.g., entered $480
sumptions of a small effect size (f = 0.10) and a required power of 0.90, instead of $480,000). Second, we followed past negotiation research to
resulting in approximately 84 observations/cell. Across studies we exclude values that deviated more than 3SDs from the condition mean
therefore aimed to recruit 100 participants per experimental condition, (Schaerer et al., 2015; Schaerer, Schweinsberg, & Swaab, 2018). We
with the exception of Study 1 in which the sample size was even larger applied this procedure across all studies. In Study 1, four outliers were
due to the fixed MBA cohort size. We report all measures, manipula- dropped and we analyzed the remaining 440 observations.
tions, and exclusions. Sensitivity power analyses and manipulation We predicted that negotiators who focused on their reservation
checks are reported in the Supplemental Online Materials. price would lower their counteroffers but be more satisfied relative to
the other two conditions. This is what we found (Fig. 1). A 3(focus:

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M. Schaerer, et al. Journal of Experimental Social Psychology 87 (2020) 103943

550 7.0
Counteroffer
540 Satisfaction 6.5
530
6.0

Counteroffer ($ '000)
520
5.5

Satisfaction
510
5.0
500
4.5
490
4.0
480

470 3.5

460 3.0
Target Control Reservation
focus condition price focus
(N = 141) (N = 153) (N = 146)

Fig. 1. Counteroffers and satisfaction by condition (Study 1). Lower counteroffers and higher satisfaction reflect a more favorable outcome for the buyer.

reservation price vs. control vs. target) × 2(outcome: counteroffer vs. cause offer recipients to focus more on avoiding negative outcomes
satisfaction) mixed-design ANOVA produced a significant interaction rather than approaching positive outcomes.
effect, F(2, 437) = 18.69, p < .001, ηp2 = 0.08.
Negotiators who focused on their reservation price made less am- 7. Study 2a
bitious counteroffers (M = 510,092, SD = 36,206) than those in the
target-focus condition (M = 534,880, SD = 31,608), t(437) = 6.11, 7.1. Participants and design
p < .001, d = 0.73, and those in the control condition (M = 521,283,
SD = 35,019), t(437) = 2.81, p = .005, d = 0.31. Negotiators in the We recruited 306 individuals (mean age = 36.69; SD = 10.12;
target-focus condition made more ambitious offers than those in the 48.3% female) from the U.S. via Amazon's Mechanical Turk.
control condition, t(437) = 3.39, p = .001, d = 0.41. Participants received $1.00 for their participation. Participants were
However, we found opposite patterns for satisfaction. Negotiators randomly assigned to either a target-frame, reservation price-frame, or
who were asked to focus on their reservation price were more satisfied a control condition.
with the offer they received (M = 4.74, SD = 1.28) than those who
focused on their target (M = 3.30, SD = 1.30), t(437) = 10.02, 7.2. Procedure and experimental manipulations
p < .001, d = 1.12, and those in the control condition (M = 4.05,
SD = 1.07), t(437) = 4.84, p < .001, d = 0.58. Those in the target- The task was similar to Study 1, except that participants received a
focus condition were less satisfied than those in the control condition, t different reservation price ($320,000) and target price ($580,000), and
(437) = 5.34, p < .001, d = 0.64. the offer frame was directly embedded in a message coming from the
offer sender. Specifically, in the reservation price-frame condition, the
5.5. Discussion message said “My offer is $450,000. How does this offer compare to the
minimum price you are willing to accept?” In the target-frame condition
Study 1 suggests that offer recipients who are asked to focus on their the message read “My offer is $450,000. How does this offer compare to
reservation price will both make counteroffers that are more favorable your target price?” In the control condition, the message simply said:
to the sender and will be more satisfied. “My offer is $450,000.” Participants then completed our dependent
measures and a demographic questionnaire.
6. Studies 2a–b
7.3. Measures
Studies 2a-2b improved Study 1 in four ways. First, we embedded
the reservation price-focus manipulation directly in a message coming 7.3.1. Counteroffer
from the offer sender to test whether the observed effect would re- Participants responded to the prompt, “What is your counteroffer to
plicate in the context of strategic offer framing. Second, to establish the buyer?” and entered their offer in a textbox. A lower counteroffer
generalizability, Study 2 used different participant samples including again represents a more favorable outcome for the buyer.
MTurk workers (Study 2a) and professional sales people with extensive
negotiation experience (Study 2b) as past research suggests that experts 7.3.2. Willingness-to-accept (WTA)
react differently to negotiation strategies than amateurs (Loschelder, Extending Study 1, participants also indicated the lowest price they
Friese, Schaerer, & Galinsky, 2016). Third, in addition to measuring would be willing to accept. A lower WTA represents a more favorable
offer recipients' counteroffers, Study 2 also measured negotiators' outcome for the buyer.
lowest price they are willing to accept (WTA) as an additional proxy of
the negotiation outcome and to test whether offer framing also lowers 7.3.3. Satisfaction
negotiators' ultimate bottom line or just their counteroffers (see also Participants indicated how happy, satisfied, and pleased they were
Loschelder et al., 2016; Thomas, Simon, & Kadiyali, 2010). Finally, with the offer (1 = not at all; 7 = very much; α = 0.97).
Study 2a tested the alternative explanation that the effects of our offer
framing strategy are caused by changes in offer recipients' regulatory 7.3.4. Regulatory focus
focus (Higgins, 1998; Trötschel, Bündgens, Hüffmeier, & Loschelder, We adopted a 1-item regulatory focus measure developed by
2013), such that focusing on one's reservation price (vs. not) would Galinsky, Leonardelli, Okhuysen, and Mussweiler (2005). Participants

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M. Schaerer, et al. Journal of Experimental Social Psychology 87 (2020) 103943

550 7.0
Counteroffer
530
Satisfaction 6.5
510
6.0

Counteroffer ($ '000)
490

Satisfaction
470
5.5
450
5.0
430
410 4.5
390
4.0
370
350 3.5
Target Control Reservation
focus condition price focus
(N = 100) (N = 99) (N = 99)

Fig. 2. Counteroffers and satisfaction by condition (Study 2a). Lower counteroffers and higher satisfaction reflect more favorable outcomes for the buyer.

indicated whether they focused on avoiding negative outcomes or ap- (295) = 1.75, p = .082, d = 0.25. Thus, regulatory focus is unlikely to
proaching positive outcomes on a bi-polar 7-point scale. Higher scores explain why those in the reservation price-focus condition were less
indicate more focus on approaching positive outcomes. ambitious and more satisfied.

7.4. Results 8. Study 2b

We used the same data cleaning approach as in Study 1 and dropped 8.1. Participants and design
8 observations as a result, leaving 298 observations.
We predicted that recipients would make less ambitious counter- We recruited 201 professional salespeople (mean age = 32.10;
offers, have a lower WTA, and would be more satisfied with the offer SD = 10.07; 55.5% female, 42.5% male, 3.5% not indicated) from
when senders ask them to focus on their reservation price. A 3(offer Prolific Academic in exchange for £1.50 and a chance to win one of
frame: reservation price vs. control vs. target) × 3(outcome: counter- three £100 Amazon vouchers. Participants had to be full-time em-
offer vs. WTA vs. satisfaction) mixed-design ANOVA produced a sig- ployees and their job had to involve both direct customer sales and
nificant interaction effect, F(2, 295) = 31.45, p < .001, ηp2 = 0.18. negotiating. Participants were predominantly from English-speaking
Negotiators who received the reservation price-frame made less countries (U.K. = 71.1%, U.S. = 23.7%, other = 5.2%). Job descrip-
ambitious counteroffers (M = 470,200, SD = 54,696) than those in the tions of participants included real estate agents, car sales, insurance
control condition (M = 506,778, SD = 35,016), t(295) = 5.76, sales, medical device sales, antique dealers, etc. Participants were
p < .001, d = 0.82, and those in the target-frame condition, randomly assigned to a target-frame or reservation price-frame condi-
(M = 522,717, SD = 42,361), t(295) = 8.27, p < .001, d = 1.17. tion.
Negotiators in the target-frame condition made higher offers than
control participants, t(295) = 2.50, p = .013, d = 0.36 (Fig. 2). 8.2. Procedure, experimental manipulations, and measures
Similarly, negotiators in the reservation price-frame condition re-
ported lower WTAs (M = 433,900, SD = 59,223) than those in the The scenario was identical to Study 1, with two exceptions. First,
control condition (M = 466,515, SD = 35,519), t(295) = 5.00, and similar to Study 2a, the offer frame manipulation was embedded in
p < .001, d = 0.71, and those in the target-frame condition, a message from the offer sender. Specifically, in the reservation price-
(M = 484,899, SD = 39,416), t(295) = 7.83, p < .001, d = 1.11. frame condition, the message said “My offer is £450,000. How does that
Negotiators in the target-frame condition reported higher WTAs than compare to your fallback offer?” In the target-frame condition the mes-
those in the control condition, t(295) = 2.81, p = .005, d = 0.40. sage read “My offer is £450,000. How does that compare to your
We again found the opposite patterns for negotiator satisfaction. target?” Second, we changed the currency to British Pounds. After ex-
Although they made lower counteroffers, negotiators who focused on posure to the offer frame manipulation, participants reported their
their reservation price were also more satisfied (M = 5.37, SD = 1.28) counteroffers, WTA, and satisfaction (α = 0.93).
than those in the control condition (M = 4.91, SD = 1.29), t
(295) = 2.39, p = .018, d = 0.34, and those in the target-frame 8.3. Results
condition, (M = 4.16, SD = 1.51), t(295) = 6.26, p < .001, d = 0.89.
Negotiators in the target-frame condition were less satisfied than con- We used the same data cleaning rule as in the previous studies,
trol participants, t(295) = 3.86, p < .001, d = 0.55 (Fig. 2). leading to the removal of 11 outliers (final N = 190).
Finally, we tested whether changes in regulatory focus could explain We predicted that recipients would make less ambitious counter-
why negotiators in the reservation price-focus condition made less ag- offers, have a lower WTA, and be more satisfied when senders ask them
gressive counteroffers than negotiators in the other conditions. There to focus on their reservation price. A 2(offer frame: reservation price vs.
were no notable differences in regulatory focus between the reservation target) × 3(outcome: counteroffer vs. WTA vs. satisfaction) mixed-
price-frame condition (M = 6.52, SD = 1.56) and the control condition design ANOVA produced a significant interaction, F(2, 187) = 19.37,
(M = 6.32, SD = 1.87), t(295) = 0.83, p = .41, d = 0.12, and the p < .001, ηp2 = 0.17.
target-frame condition, (M = 6.74, SD = 1.56), t(295) = 0.92, p = .36, Follow-up contrast analyses showed that negotiators who were
d = 0.13. Negotiators in the target-frame condition were marginally asked to focus on their reservation price made less ambitious counter-
more promotion-focused than those in the control condition, t offers (M = 483,155, SD = 30,151) than those who focused on their

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M. Schaerer, et al. Journal of Experimental Social Psychology 87 (2020) 103943

500 7.0
Willingness-to-accept
490
Satisfaction
6.5

Willingness-to-accept (£ '000)
480
470
6.0

Satisfaction
460
450 5.5
440
5.0
430
420
4.5
410
400 4.0
Target Reservation price
frame frame
(N = 94) (N = 96)

Fig. 3. Willingness-to-accept and satisfaction by condition (Study 2b).

target (M = 497,914, SD = 19,265), t(188) = 4.01, p < .001, 9.1. Participants and design
d = 0.58.
Similarly, negotiators who were asked to focus on their reservation We recruited 603 MTurkers (mean age = 36.69; SD = 10.12; 48.3%
price reported a lower WTA (M = 448,026, SD = 34,096) than those female) in exchange for $1.00. Participants were randomly assigned to
who focused on their target (M = 472,713, SD = 19,378), t a 3(offer frame: reservation price vs. control vs. target) × 2(recipient
(188) = 6.12, p < .001, d = 0.89 (see Fig. 3). power: low vs. high) between-subjects design.
Also, as predicted, negotiators asked to focus on their reservation
price were more satisfied (M = 5.02, SD = 1.07) than those who fo- 9.2. Procedure, experimental manipulations, and measures
cused on their target (M = 4.31, SD = 1.11), t(188) = 4.50, p < .001,
d = 0.65 (see Fig. 3). Participants assumed the role of the retiring owner of a restaurant
chain called “Vindaloo's”, trying to sell their business. An independent
accountant had estimated its value at $10.5 million (their target price)
8.4. Discussion and that a venture capital firm had already offered $4.5 million (low
power condition) or $9.5 million (high power condition), which was the
Study 2 demonstrated that directing offer recipients' focus on their lowest price they would be willing to accept (their reservation price).
reservation price through strategic offer framing causes them to make Participants then read a message from a buyer who offered $7.5 mil-
less ambitious counteroffers and set lower bottom lines while exhibiting lion.
increased satisfaction. Study 2a suggests regulatory focus is unlikely to In the reservation price-frame condition the message said “My offer for
explain these effects. Finally, Study 2b demonstrated that this strategy Vindaloo's is $7.5 million. How does this offer compare to the minimum
was also effective with experienced negotiators. price you would be willing to accept?” In the target-frame condition, the
message said “My offer for Vindaloo's is $7.5 million. How does this
offer compare to the ideal price you would like to achieve?” In the
9. Study 3 control condition, the message simply said: “My offer for Vindaloo's is
$7.5 million.” Participants then reported their counteroffers and sa-
The purpose of Study 3 was twofold. First, we wanted to test our tisfaction (α = 0.99) and completed a demographic questionnaire.
theoretical assumptions using a moderation-by-process approach
(Spencer, Zanna, & Fong, 2005), while simultaneously identifying a 9.3. Results
practically-relevant boundary condition. Our theorizing suggests that
for the reservation price frame to cause assimilation and contrast ef- We used the same data cleaning approach as before. Nine ob-
fects, offer recipients' reservation price should be relatively less at- servations were dropped (final N = 594).
tractive than their target price (see also Galinsky et al., 2002). An im- We predicted that recipients would make less ambitious counter-
portant factor that impacts the relative attractiveness and the offers and be more satisfied when senders ask them to focus on their
willingness to comply with a request is a negotiator's power. Indeed, reservation price, but not when the offer recipient is high in power. A
negotiators who have a lot of power (i.e., have an attractive outside 3(offer frame) × 3(recipient power) × 2(outcome) mixed ANOVA
offer) tend to have higher reservation prices than negotiators who have produced a significant three-way interaction, F(2, 588) = 11.78,
less power (Galinsky, Schaerer, & Magee, 2017; Pinkley, Neale, & p < .001, ηp2 = 0.04.
Bennett, 1994; Schaerer, Teo, Madan, & Swaab, 2020) and tend to be We first analyzed the outcomes of low-power recipients. Replicating
less affected by the opponent's influence tactics (Van Kleef, De Dreu, Studies 1–2, negotiators who received the reservation price-frame made
Pietroni, & Manstead, 2006). Thus, in Study 3 we manipulated whether less ambitious counteroffers (M = 8.58, SD = 1.10) than those in the
offer recipients had a very weak or very strong reservation price and control condition (M = 9.04, SD = 1.11), t(294) = 3.04, p = .003,
predicted that strategic offer framing would be less effective when offer d = 0.43, and those in the target-frame condition, (M = 9.05,
recipients have a lot of power because this would direct their focus on a SD = 0.97), t(294) = 3.11, p = .002, d = 0.44. There was no differ-
relatively strong reservation price. A second goal of Study 3 was to ence between the target-frame and control conditions, t(294) = 0.05,
replicate the effect using a different negotiation context. p = .96, d = 0.01. Again, we found opposite effects for satisfaction.

6
M. Schaerer, et al. Journal of Experimental Social Psychology 87 (2020) 103943

Low Power Recipient 9.4. Discussion

10.0 7.0
Counteroffer Study 3 replicated our effects in another negotiation setting, iden-
9.5 Satisfaction tified an important moderator suggesting that assimilation and contrast
6.5 effects are likely responsible for the win-win effect, and identified a
Counteroffer ($ million)

9.0 practically-relevant boundary condition: negotiator power. When ne-

6.0 gotiators had a lot of power (i.e., a strong outside offer) and thus a very
8.5

Satisfaction
high reservation price, shifting their attention on their reservation price
backfired.
8.0 5.5

7.5 10. General discussion

5.0
7.0 Scholars and practitioners often assume that economic and rela-
4.5 tional benefits are conflicting in distributive negotiations. In contrast,
6.5 we propose that these are not mutually exclusive and that offer framing
can help negotiators achieve both. This was supported in four studies
6.0 4.0
Target Control Reservation documenting that strategically shifting an offer recipient's focus on
focus condition price focus their reservation price causes both a) an assimilation effect that reduces
(N = 99) (N = 98) (N = 100) the size of the recipient's counteroffer and b) a contrast effect that
improves the recipient's satisfaction. We also showed that the strategy
High Power Recipient was no longer effective (and even backfired) when recipients had a lot
11.5 4.0 of power.
Counteroffer These studies make important contributions to research on nego-
11.0 Satisfaction tiations and judgment and decision-making. First, the idea of a “win-
3.5
win” outcome in which both negotiators walk away from the bar-
Counteroffer ($ million)

10.5
gaining table with a mutually beneficial deal typically refers to in-
3.0 tegrative negotiations in which negotiators trade-off issues to create
10.0
Satisfaction

value (Brett & Thompson, 2016). In contrast, our research contributes

9.5 2.5 to a growing stream of research (e.g., Ames & Mason, 2015; Neale &
Bazerman, 1983; Shirako et al., 2015) suggesting that even distributive
9.0 negotiations can create better deals for oneself and more satisfied op-
2.0
ponents. We also extend the findings from Galinsky et al. (2002) by
8.5
showing that shifting a negotiator's attention to their walkaway price a)
1.5 can be used as an interpersonal strategy, b) is counterintuitive and not
8.0
naturally used, c) improves economic and relational outcomes when
7.5 1.0 compared to a baseline condition, and d) can backfire when recipients
Target Control Reservation have a lot of power.
focus condition price focus Second, recent research has suggested that negotiators react nega-
(N = 101) (N = 98) (N = 98) tively to overly ambitious offers (Schweinsberg et al., 2012). Building
Fig. 4. Counteroffers and satisfaction by condition (Study 3). Lower counter- on this work, we suggest that offer extremity may lie in the eye of the
offers and higher satisfaction reflect a more favorable outcome for the buyer. beholder, and that this is influenced by salient reference points which
can be changed by offer-framing strategies.
Third, our studies contribute to research on assimilation and con-
Negotiators who focused on their reservation price were more satisfied
trast effects (Chapman & Johnson, 1999; Damisch, Mussweiler, &
(M = 5.45, SD = 0.99) than those in the control condition (M = 5.05,
Plessner, 2006; Förster et al., 2008; Mussweiler, 2001b; Sherif, Taub, &
SD = 1.29), t(294) = 2.29, p = .023, d = 0.33, and those in the target-
Hovland, 1958), which has assumed that comparing a particular value
frame condition, (M = 4.46, SD = 1.34), t(294) = 5.74, p < .001,
either leads to assimilation or contrast. For example, Sherif et al. (1958)
d = 0.81. Negotiators in the target-frame condition were less satisfied
found that people's estimates tend to converge towards the anchor
than control participants, t(294) = 3.43, p = .001, d = 0.49 (Fig. 4, top
(assimilation effect) if the anchor is relatively close to the stimuli being
panel).
judged, but move away from the anchor (contrast effect) if the anchor is
We next analyzed the outcomes for high-power recipients. High-
relatively distant. Extending this work, we show that the same anchor
power negotiators who received the reservation price-frame made more
(i.e., a reservation price) can simultaneously lead to assimilation and
ambitious counteroffers (M = 10.34, SD = 1.15) than those in the
contrast effects.
control condition (M = 9.82, SD = 1.47), t(294) = 2.73, p = .007,
Finally, the four studies combined provide robust evidence for the
d = 0.39, and similarly to those in the target-frame condition,
effectiveness of this conversational strategy. This is a valuable con-
(M = 10.25, SD = 1.41), t(294) = 0.46, p = .65, d = 0.07.
tribution to negotiation practice because our studies clearly indicate
Counteroffers in the target-frame conditions were higher than those in
that this strategy is counterintuitive and not naturally used.
the control condition, t(294) = 2.26, p = .024, d = 0.32. We also
The present work also provides exciting opportunities for future
found a reversal of the satisfaction effect. High-power negotiators who
research. First, our studies focused on the initial stage of the negotiation
focused on their reservation price were less satisfied (M = 1.54,
(for a similar approach, see Loschelder et al., 2016) as past research has
SD = 1.16) than those in the control condition (M = 2.04, SD = 1.77),
already established strong correlations between offers and negotiation
t(294) = 2.44, p = .015, d = 0.35, and the difference to the target-
outcomes (e.g., Ames & Mason, 2015; Galinsky & Mussweiler, 2001).
frame condition was not significant, (M = 1.77, SD = 1.34), t
Future research could test the long-term effects of offer framing as re-
(294) = 1.11, p = .27, d = 0.16. There was no difference between the
search suggests that anchoring effects can persist undiminished for up
target-frame and control conditions, t(294) = 1.32, p = .19, d = 0.19
to a week (Mussweiler, 2001a). Second, our studies relied on reserva-
(Fig. 4, bottom panel).
tion prices as “low” reference points to shift the counterpart's focus.

7
M. Schaerer, et al. Journal of Experimental Social Psychology 87 (2020) 103943

Although research suggests that reservation prices tend to be the most 10.1016/j.obhdp.2017.05.002.
salient and influential reference points in negotiations (White et al., Locke, J. (1690). An essay concerning human understanding. London: Thomas Basset.
Loewenstein, G. F., Thompson, L., & Bazerman, M. H. (1989). Social utility and decision
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(e.g., market information) could achieve the same goal. Finally, future 426.
research may examine whether and when negotiators misrepresent Loschelder, D. D., Friese, M., Schaerer, M., & Galinsky, A. D. (2016). The too-much-
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