Agreement Pressure and Opponent Strategies in Oligopoly Bargaining

Abstract

Previous research has shown the softest strategy to be superior to tougher strategies in oligopoly bargaining. However, initial offer and subsequent strategy were confounded in previous research. Female students from introductory psychology classes played the role of buyers and bargained with programmed seller strategies under high or low agreement pressure. Subjects were afforded the opportunity to bargain with the strategy (seller) of their choice and to change sellers as they wished. As hypothesized, (a) high agreement pressure reduced the total amount of bargaining but produced more profit for the seller; (b) the soft initial strategy was more effective than the tough initial strategy; and (c) the advantage of the soft initial strategy was more pronounced under high agreement pressure. These results suggest that in oligopoly bargaining first impressions created by initial bargaining strategies have important consequences, especially under pressures to reach agreement quickly.

Get full access to this article

View all access options for this article.

References

Chertkoff, J. M. , & Esser, J. K. (1976). A review of experiments in explicit bargaining. Journal of Experimental Social Psychology, 12, 464-486.

Fouraker, L. E. , & Siegel, S. (1961). Bargaining behavior II: Experiments in oligopoly. University Park: Pennsylvania State University, Departments of Psychology and Economics.

Komorita, S. S. , & Barnes, M. (1969). Effects of pressures to reach agreement in bargaining. Journal of Personality and Social Psychology, 13, 245-252.

Lawler, E. J. , & MacMurray, B. K. (1980). Bargaining toughness: A qualification of level-of-aspiration and reciprocity hypotheses. Journal of Applied Social Psychology, 10, 416-430.

Leventhal, G. S. , & Bergman, J. T. (1969). Self-depriving behavior as a response to unprofitable inequity. Journal of Experimental Social Psychology, 5, 153-171.

Liebert, R. M. , Smith, W. P. , Keiffer, M. , & Hill, J. M. (1968). The effects of information and magnitude of initial offer on interpersonal negotiation. Journal of Experimental Social Psychology, 4, 431-441.

Pruitt, D. G. (1981). Negotiation behavior. Orlando, FL: Academic Press.

Pruitt, D. G. , & Drews, J. L. (1969). The effect of time pressure, time elapsed, and the opponent's concession rate on behavior in negotiation. Journal of Experimental Social Psychology, 5, 43-60.

Rubin, J. Z. , & Brown, B. R. (1975). The social psychology of bargaining and negotiation. Orlando, FL: Academic Press.

10.

Schmitt, D. R. , & Marwell, G. (1972). Withdrawal and reward allocation as responses to inequity. Journal of Experimental Social Psychology, 8, 207-221.

11.

Seholm, K. J. , Walker, J. L. , & Esser, J. K. (1985). A choice of alternative strategies in oligopoly bargaining. Journal of Applied Social Psychology, 15, 345-353.

12.

Smith, D. L. , Pruitt, D. G. , & Carnevale, P. J. D. (1982). Matching and mismatching: The effect of own limit, other's toughness, and time pressure on concession rate in negotiation. Journal of Personality and Social Psychology, 42, 876-883.

13.

Teger, A. I. (1980). Too much invested to quit. Elmsford, NY: Pergamon Press.

14.

Thibaut, J. W. , & Kelley, H. H. (1959). The social psychology of groups. New York: Wiley.

15.

Upton, G. J. G. (1978). The analysis of cross-tabulated data. New York: Wiley.

16.

Yukl, G. A. (1974). The effects of situational variables and opponent concessions on a bargainer's perception, aspirations, and concessions. Journal of Personality and Social Psychology, 29, 227-236.