Interpersonal negotiation is a fundamental part of our everyday lives. We negotiate one-on-one, with groups and organizations, and sometimes over and over again with the same parties. If you’re someone who conducts repeated negotiations with the same counterparts, then you may have experienced that your “subjective assessment”—the feeling you have after one negotiation—affects the success of the next. In other words, when you walk away feeling good, the next negotiation generally goes well; when you walk away feeling bad, the next negotiation tends to falter.
There is science to back up this phenomenon. A number of recent studies, such as this two-round negotiation study, demonstrate that social psychological outcomes from prior negotiations are positively related to performance—including economic outcomes—in subsequent negotiations.
But what about “sequential negotiations”—multiple back-to-back negotiations with different parties. Does the same hold true? Purchasing managers, lawyers, HR professionals, and politicians, for example, often find themselves flipping from one deal to the next. Does their subjective assessment have the same affect in these unique circumstances?
As it turns out, while there is substantial negotiation research examining one-time deals or repeated interactions between the same parties, very little was known about how people perform in such sequential negotiations—until now.
In two experiments, MIT Sloan Professor Jared R. Curhan, working with Virginia Tech professor William J. Becker, looked at the habits of people who negotiate consecutively with many different partners. In one of the experiments, Curhan and Becker studied the actual negotiations of employees of a U.S. transportation company as they bargained for lower rates from various fuel suppliers. They found that when negotiators got a good outcome in one negotiation, they felt positive emotions, which triggered a sense of pride. They then carried this pride into their next negotiation with a new partner—where it became a liability.
By contrast, Curhan and Becker found that people who did less well in a negotiation, and didn’t experience pride, often rebounded and reached better outcomes in their next deal.
“Although we predicted that emotional spillover across sequential negotiations could have benefits as well as drawbacks,” says Curhan, “Our findings only supported the drawbacks of pride.”
Curhan and Becker confirmed these results in a controlled laboratory experiment where undergraduate business students played the role of a buyer or seller in a negotiation simulation, four times in a row, facing a different counterpart each time. Here again, better feelings (in particular, pride) in the wake of a negotiation backfired in the subsequent negotiation, and vice versa. (It is also of interest that, in this experiment, pride explained this effect for men, but not women.)
What is the explanation? Pride may make us overly confident that our performance in one deal will carry over to the next. In negotiation, overconfidence can lead us to cut corners and make careless mistakes.
Fortunately, there are ways to prevent emotions triggered by one negotiation sabotaging our next deal.
“Give yourself a cooling off period and do some reflecting,” says Curhan. While cooling off, negotiators should strive for a humble, learning mindset to tamp down any overconfidence.
At an organizational level, firms should give their employees flexibility to space out their negotiations so that any pride they experience has time to dissipate.
In his MIT Sloan Executive Education course, Negotiation for Executives, Professor Curhan presents a comprehensive framework to facilitate efficient and effective negotiation preparation. See upcoming sessions.