Abstract
Virtual intelligence is “the ability to communicate and navigate relationships and achieve business goals when engaging with others who are not physically co-present.” Virtual intelligence is particularly critical in e-negotiations because negotiators compete to achieve economic goals but must cooperate to reach mutual agreement and maintain social relationships. I review key research findings on the advantages and disadvantages of virtual and in vivo negotiations. I make the point that in vivo negotiation does not always result in more trust and mutually beneficial outcomes than virtual negotiations. I use insights from research on e-negotiations and virtual communication to identify skills that facilitate trust and information sharing and lead to more desirable negotiation outcomes. I organize my discussion of virtual intelligence in terms of four key challenges that confront negotiators: relational concerns (building trust), conveyance (transmitting and receiving information), convergence (reaching a shared understanding of the situation), and achieving instrumental goals (negotiating a favorable outcome).
Keywords
Effective negotiation skills are essential for people who need to negotiate as part of their job, such as with colleagues, superiors, suppliers, clients, and customers. The behavioral science of negotiation has been shaped by behavioral economics, social psychology, and communication studies (see Thompson & Wang, 2022). Throughout the evolution of behavioral negotiation research, different social-cognitive skills have emerged as paramount for effective negotiation. For example, in the 1980s and 1990s, the key skills necessary for effective negotiation involved rational decision-making, and the negotiator was cautioned about heuristics and biases that could result in poor outcomes (Neale & Bazerman, 1992). In the 1990s, Goleman (1996) and Salovey and Mayer’s (1990) construct of emotional intelligence turned the focus of behavioral negotiation research toward perspective taking, empathy, relationships, and trust. A parallel stream of research focused on the importance of cultural awareness and understanding cultural differences (Brett, 2007). In this article, I focus on virtual intelligence, “the ability to communicate and navigate relationships and achieve business goals when engaging with others who are not physically co-present” (Thompson, 2022, p. 141). Virtual intelligence in negotiation is particularly challenging because people have competing economic incentives and yet are motivated to reach mutual agreement. Most negotiation situations are not zero sum and contain potential for integrative agreement in which negotiators can maximize mutual gain but often fail to do so because of distrust, faulty communication, and misperceptions. For this reason, behavioral negotiation theories, such as the dual concern model, regard relational goals and instrumental (economic) goals to be key concerns for effective negotiation (Pruitt, 1983).
When I speak of virtual intelligence, the focus is not on the technical, programming, and computer science skills that may be involved in learning and using new communication platforms but rather on the cognitive, emotional, and social-behavioral skills necessary to be effective when using whatever technology might be involved. To be effective in virtual communication, it is important to understand how virtual negotiations often result in different outcomes and processes than in vivo negotiations. I selectively focus on research studies to highlight key research paradigms, theories, and conclusions (see Geiger, 2020, for a comprehensive review). Using behavioral negotiation theory and media synchronicity theory, I identify four ways that people may enhance their virtual intelligence in negotiations: maximizing relational outcomes (trust), securing instrumental outcomes (economic profit), conveying information (e.g., regarding interests and priorities), and converging on a shared understanding of the negotiation.
Traditional Face-to-Face (in Vivo) Negotiation Versus Computer-Mediated (Virtual) Negotiations
Most of the original theory on which current negotiation research is based never forecast a world in which people would willingly conduct high-stakes, multimillion-dollar deals without ever interacting in person. The interest in virtual negotiation began long before the pandemic and involved studies that compared face-to-face interactants with those negotiating via phone, email, instant messaging, Skype, and other communication media. Accordingly, the research has not been consistent with regard to the terminology used to refer to traditional (often called “face-to-face”) negotiations versus e-negotiations (typically referring to email, text, phone, written communication, or videoconference). In addition, the advent of new technologies renders some terms, such as “face-to-face,” ambiguous given that videoconferencing allows for face-to-face interaction. In this article, I refer to virtual negotiation as that which occurs when people are not in the same physical space. I use the term in vivo negotiation to refer to traditional face-to-face negotiation without the assistance of technology. Virtual negotiation encompasses e-negotiation, or negotiating via email or text message, videoconferencing, phone, Zoom, Slack, and other communication media in which negotiators are not physically co-present yet may have a visual channel.
Media richness theory
Most people strongly prefer in vivo negotiation if the alternative is virtual (e.g., phone, text, email, videoconference). Media richness theory is based on the strong belief that technologies that allow for greater information (e.g., videoconference vs. email) facilitate the attainment of desirable negotiated outcomes (Daft & Lengel, 1984; Poole et al., 1992). Richer communication media encourage more collaborative behavior in negotiation; videoconference is just as effective as in vivo negotiation for reaching integrative agreements (Purdy & Nye, 2000). However, people often regard virtual communication to be less rewarding, and negotiators bring distinctly more negative expectations to e-negotiations that may act as self-fulfilling prophesies (Naquin & Paulson, 2003).
Media naturalness theory
Media naturalness theory argues that a decrease in the degree of naturalness of a communication medium (or its degree of similarity to being in vivo) leads to increased cognitive effort, increased communication ambiguity, and decreased psychological arousal (Kock, 2005). In a negotiation context, the media naturalness theory explains why negotiators believe they can better read nonverbal cues, thereby forming more accurate assessments of the counterparty’s interests, and build trust and rapport, regarded as significant predictors of mutual agreement (Parlamis & Ames, 2010). Negotiators engaging in traditional face-to-face negotiations feel greater trust and understanding for the other party, even if the other party does not actually feel the same way (van der Toorn et al., 2015).
Psychological distance
The key theoretical explanation that undergirds the tendency for virtual negotiations to result in lower economic and social outcomes is psychological distance. Psychological distance refers to the extent of divergence from direct experience of “me, here, and now” (Liberman et al., 2007). Psychological distance theory (also referred to as social presence theory; Short et al., 1976) holds that people communicating virtually lack the social cues that reinforce norms of honesty, ethics, and rapport and that in absence of such cues, people behave in a more hostile, self-interested, and deceptive fashion (Liberman et al., 2007). The results of one meta-analysis suggest that psychological distance is greater in virtual negotiations, as compared to face-to-face negotiations, and that e-negotiations result in more hostility and lower economic profit (Stuhlmacher & Citera, 2005). One study compared face-to-face and e-negotiations and found that e-negotiators regarded the opponent (counterparty) to be less credible and even saw themselves as less credible as compared with face-to-face negotiators (Citera et al., 2005). Although there were no actual differences in lying, e-negotiators were more likely to advocate using dishonesty in the future.
Virtual negotiators begin with lower levels of prenegotiation trust and conclude with lower levels of postnegotiation trust, compared with face-to-face negotiators. Moreover, these negative perceptions result in lower outcome satisfaction and less desire to communicate in the future (Naquin & Paulson, 2003). Negotiators who communicate via email are less cooperative and feel more justified in being noncooperative than negotiators who communicate face-to-face (Naquin et al., 2008). Parlamis and Ames (2010) compared email and face-to-face negotiations and found that email negotiators had lower prosocial concerns, were less likely to reach agreement, were less satisfied with the quality of interaction, had lower rapport, and were less optimistic about future trust, as compared with face-to-face dyads.
Advantages of virtual negotiations
Given the disadvantages of virtual negotiation with respect to economic and relational outcomes, it would appear wise to advise negotiators to uniformly opt for in vivo negotiation. However, it may be naive to believe that in vivo negotiation always leads to mutual trust. Some studies comparing e-negotiations with in vivo negotiations report no differences in terms of economic outcomes; however, e-negotiations resulted in lower social outcomes. Specifically, negotiations took significantly longer to complete and involved more “hard” tactics (e.g., threats, intimidation, and take-it-or-leave-it offers; Galin et al., 2007).
Some studies have compared synchronous and asynchronous virtual negotiations—a form of media richness. Paradoxically, synchronous virtual negotiations lead to less friendly, more affective, and more competitive negotiation behavior; asynchronous virtual negotiations lead to greater information exchange and more friendly communication (Pesendorfer & Koeszegi, 2006). The theoretical explanation is that in vivo communication creates greater time pressure and allows immediate, unfiltered feedback, producing more competitive behavior.
Communication orientation model and barrier effect
The communication orientation model provides a useful explanation of why virtual negotiations may sometimes be advantageous (Swaab et al., 2012). Swaab et al.’s (2012) meta-analysis of communication mode and relationship quality suggests that richer communication channels (e.g., visual, vocal, and synchronous) increase the likelihood of desirable negotiated outcomes for people with a neutral orientation and do not affect the outcomes for negotiators with a cooperative orientation, but hurt outcomes when negotiators have a noncooperative orientation. The barrier effect is based on the assumption that richer communication media (that allow direct eye gaze) signal dominance and engender competition, and therefore, reducing communication richness might reduce threats and increase trust (Pruitt, 1981).
Many negotiation studies focus on the attainment of joint gains as a key outcome metric in successful negotiation; however, it is important to consider how joint gains may be distributed among negotiators. In vivo negotiations may put overly trusting negotiators at risk in a fixed-sum (distributive) negotiation. Negotiators may be at a distinct disadvantage when they communicate synchronously in a distributive negotiation and are low in power. Indeed, when negotiators have a weak position and need to carefully prepare counterproposals, using an asynchronous mode of communication, such as email, may result in more favorable outcomes than using synchronous communication media. For example, when sellers had a distinct power advantage over buyers, symmetric e-negotiations (instant messaging) led to more profitable outcomes for sellers than when they used asymmetric (e.g., email) negotiations, suggesting that when negotiators (in this case, buyers) are not prepared or have weak arguments, the slower communication media enable them to prepare and enact strategy (Loewenstein et al., 2005).
Similarly, when people interact with a counterparty who is purely self-interested, in vivo negotiation may lead to less-than-favorable distribution of scarce resources. One study examined the influence of the “dark triad” (DT; psychopathy, Machiavellianism, and narcissism) in in-vivo versus e-negotiations and found that people who were higher in DT perform better when they negotiate in vivo, presumably because they can manipulate the other party; conversely, those lower in DT perform better in e-negotiations (Crossley et al., 2016).
Physical distance and cognitive construal
When negotiators communicate virtually, their actual physical separation can vary. One study examined how virtual-negotiation outcomes were influenced by perceived physical distance (Henderson, 2011). People who believed the counterparty was physically far away (several thousand feet) attained more integrative agreements than those who believed the counterparty was nearby (a few feet away). Presumably, greater physical distance engenders a higher level of cognitive construal, prompting more creative outcomes, via information sharing.
In sum, the balance of research suggests that virtual negotiations are often regarded as more competitive and less trusting than in vivo negotiations and that such perceptions can often create self-fulfilling prophesies. However, virtual negotiations, particularly those with reduced media richness (e.g., asynchronous negotiations), may be advantageous when parties have an acrimonious relationship (to provide a potential barrier) and when negotiators have a less advantageous power position (to allow them more time to strategize).
Sex differences and relational orientation
A commonly cited finding is that men tend to attain better economic outcomes as compared with women in negotiations (Haselhuhn & Kray, 2012; Kolb, 2009). However, recent meta-analyses reveal that gender differences in negotiation are reduced and even reversed in certain contexts, such as when people gain experience, receive information about the bargaining range, and negotiate on behalf of another (Mazei et al., 2015). One conceptual argument that explains sex differences in negotiated outcomes is that social roles and social role pressure create a conflict for female negotiators, who are expected to be relationally oriented and make economic sacrifices to maintain positive relationships (Curhan et al., 2008). Such role pressure may be reduced in virtual negotiations because traditional social cues (or pressure) are dampened or not as salient. Indeed, a meta-analysis revealed that women were “more hostile in virtual compared to in-vivo negotiations, but men’s hostility did not differ across communication media” (Stuhlmacher et al., 2007, p. 229). Overall, male and female negotiators were more successful when negotiating in vivo than virtually, but there were no gender differences.
Yet another stream of research has found that the stereotypical behavior associated with women in face-to-face communication, for example, yielding and making concessions, also emerges in computer-mediated communication (Koeszegi et al., 2006). Specifically, even though virtual negotiations such as email would seem to reduce the salience of social context cues, women negotiating virtually reveal more information and yield to the counterparty; conversely, men are more persuasive and competitive. A study of gender differences in computer-mediated negotiations revealed that social incentives (relationship orientation) increased cooperation in women more than in men; conversely, profit incentives increased men’s cooperativeness more than that of women (Katz et al., 2008).
In sum, the research on gender and virtual negotiations is largely mixed and heavily context dependent.
Cross-cultural virtual negotiations
The virtual era has made it possible to study culture and cultural differences in e-negotiations by examining how people of different cultures interact. A meta-analysis revealed that in cultures lower in individualism, higher in in-group collectivism, lower in assertiveness, and higher in harmony, women outperformed men in negotiations (Shan et al., 2019). One study examined intercultural email negotiations between Hong Kong Chinese and U.S. negotiators (Rosette et al., 2012). The thesis was that Hong Kong Chinese negotiators communicating via email with a U.S. counterpart would exhibit a reactance effect, and consequently engage in more aggression, resulting in a more favorable outcome for themselves. Indeed, the results of the study showed Hong Kong Chinese negotiators made more aggressive opening offers and attained better economic outcomes than did U.S. negotiators.
Paradoxically, the creation of mutual gains in cross-cultural negotiation may be facilitated by virtual interaction precisely because communicators are constrained with respect to communication norms. Conversely, when people of different cultures interact in vivo, they use different strategies, resulting in lack of convergence (mismatch of strategy) and lack of conveyance (misunderstanding of one another). In one investigation of cross-cultural negotiation, Japanese-Canadian negotiation dyads were given either no feedback, automated language feedback of participant emails based on national culture dimensions, or automated language feedback combined with participants’ shared self-reflections. Both types of feedback led to greater empathy, but the shared self-reflections provided the greatest insight into the counterparty’s intentions and cultural values (He et al., 2017).
The Virtually Intelligent Negotiator
In this section, I focus on how people can more effectively achieve their goals when conducting virtual negotiations. To organize the discussion, I consider four challenges that negotiators face when communicating in a virtual environment: building a relationship (e.g., establishing trust and rapport), message conveyance (communicating messages and information), convergence (reaching a shared understanding of the negotiation situation itself and how to conduct the process), and achieving instrumental goals (settling on favorable terms).
Building a relationship
According to social information-processing theory, people have a need to affiliate when communicating and build meaningful and positive relationships with others (Walther, 1992). In negotiation, trust and rapport are key elements of a relationship that often are associated with more desirable outcomes. The key question is how negotiators can bridge the psychological distance that is often associated with virtual communication.
Virtual handshake
One way of bridging the psychological distance produced by e-negotiations is to engage in a virtual handshake, or the deliberate exchange of pleasantries and self-disclosure (Teten & Allen, 2005). The extent to which negotiators can engage relationally, not simply transactionally, is paramount for virtual negotiation success. In one of the earliest investigations of email-only negotiators, some people negotiated with a member of their own organization (in-group) and others negotiated against someone from a different, rival organization (out-group); in addition, some people were provided with limited personal information about the counterparty prior to the negotiation, specifically a small Facebook-like photo and minimal demographic information. When neither common in-group status nor a personalized relationship existed, negotiations were more likely to result in costly impasse (Moore et al., 1999).
Familiarity and similarity
Building familiarity and establishing similarity are important for bridging psychological distance. One study examined how the disclosure of personal information, unrelated to the actual negotiation itself, may allow e-negotiators to establish trust and create more economically valuable outcomes. Some negotiators engaged in a brief phone conversation (“schmoozed”) before commencing e-mail negotiations, whereas others did not (Morris et al., 2002). As predicted, schmoozing appeared to bridge virtual distance; specifically, “schmoozers” felt more rapport and trust than did nonschmoozers and reached more economically valuable settlements.
The key aspect of schmoozing and virtual handshakes that paves the way toward more successful virtual negotiations is familiarity with the counterparty. One investigation attempted to disentangle the effects of empathy versus familiarity in virtual negotiations and found that empathy did not predict the success of virtual negotiations, but familiarity led people to behave more cooperatively (Marchi et al., 2020).
A meta-analysis comparing in vivo negotiation with virtual negotiations (e.g., audio, email, text, videoconferencing) revealed three key moderators: Negotiation mode (richer), anonymity (reduced), and future interaction (expected) positively enhanced the process and outcome of virtual negotiations (Stuhlmacher & Citera, 2005). Specifically, in vivo negotiations were less hostile and resulted in higher mutual gains than virtual negotiations, supporting the psychological distance model rather than the barrier effect prediction.
Positive emotion and tone
The expression and detection of emotions is regarded to be particularly important for e-negotiations (Griessmair et al., 2015). Specifically, the use of positive-emotion words and tone of language, such as demonstrating agreeableness, improves the success of e-negotiations (Hine et al., 2009). Language tone (i.e., the sentiment in messages) facilitates the likelihood of mutual agreement; avoiding negative tone is a stronger predictor of agreement value than is increased levels of positive language (Alfano et al., 2022).
Humor is another example of how trust and rapport might be built in negotiations. Using humor during e-negotiations increases trust and satisfaction and leads to better economic outcomes, particularly for the negotiator who initiated the humor (Kurtzberg et al., 2009).
Conveyance of meaning
Because parties to negotiation have competing incentives, they often attempt to persuade the counterparty via information sharing, data, rationales, and argumentation. According to media synchronicity theory, conveyance processes entail transmitting novel and relevant information so the receiver understands the message (Dennis et al., 2008). I consider two methods by which virtual negotiators can convey messages: message-to-offer ratios and metacommunication.
Messages versus offers
Virtual communication often results in more task-focused behavior such that people get down to business, and in negotiation, this often takes the form of making offers and counteroffers. However, it is often difficult for receivers to decode offers, and if the offers are extreme, parties may be insulted. Indeed, negotiators are often more persuasive when they wait to make an initial offer, so as to better contextualize it with information previously exchanged between parties (Sinaceur et al., 2013). An investigation of e-negotiations revealed that negotiators who felt more cooperative (toward the counterparty) sent fewer offers but more messages (higher message-to-offer ratio), resulting in greater satisfaction and more positive outcomes compared with negotiators who felt less cooperative (Lai et al., 2006).
Metacommunication
Parties to a negotiation may fail to develop trust and rapport and shared understanding if they cannot agree on how to conduct the negotiation. Negotiators who seek to build rapport and also discuss ground rules and procedures for guiding e-negotiations report greater satisfaction with negotiation (Naquin & Paulson, 2004). One investigation of non-face-to-face negotiation (in which participants communicated through written note) revealed that attempts to build empathy were best achieved via metacommunication (i.e., communication about communication) and the use of inclusive pronouns (Ulijn et al., 2001). Similarly, an investigation of employment e-negotiations revealed that the conversational engagement predicted negotiation success (Curhan & Pentland, 2007).
Convergence and mutual understanding
Once negotiators have shared and received information, they need to agree on how to negotiate the issues and reach resolution. This is challenging because negotiators may hold very different mental models of how to conduct and resolve the negotiation. Convergence in negotiation is a form of sensemaking, wherein negotiators need to agree on how to engage (McGinn & Keros, 2002). I consider two strategies for facilitating convergence in negotiation: mirror and mimicry and the use of graphical aids.
Mirror and mimicry
Mimicry is the imitation of the expressions of others, and in negotiation, mirroring establishes liking and trust and builds shared understanding (Maddux et al., 2008). In virtual negotiations, people negotiate more profitable outcomes when they mimic the counterparty’s language, particularly during the early stages of virtual communication (Swaab et al., 2011). Specifically, negotiators who actively mimicked (i.e., used the counterparty’s same words) during the first 10 minutes of a virtual negotiation claimed better economic outcomes than did those who mimicked during later stages and control participants (who did not mimic).
Graphical aids
One way of achieving convergence, or shared understanding in virtual negotiations, is through the use of graphical aids, a type of data visualization of the negotiation itself. In one investigation, some negotiators sent messages via a natural language system that provided a graphical display of the history of offers and messages as well as a running log of the conversation; others did not have a graphical display summary (Weber et al., 2006). There were no differences in the rates of those who reached mutual agreement, but those who did not have the graphical display had longer messages, presumably because parties required more explanation to reach understanding.
Instrumental goals
Negotiation is a mixed-motive task because negotiators compete for scarce resources but need to cooperate so as to reach mutual agreement regarding the division of resources (Thompson & Wang, 2022). Balancing self-interest and relational goals is challenging in virtual environments.
Textual cues
One study examined salespeople’s success in attaining desirable instrumental outcomes in email contract negotiations. Sellers who used textual cues (a corpus of key words that the counterparty, in this case, the buyer, used in e-conversations) for the purpose of capturing the buyers’ attention led to more profitable contract terms for the seller (Singh et al., 2020). Specifically, sellers who composed responses to specific buyer messages (based on textual cues) that contained time urgency, heightened interest, and so on were more successful in closing deals than sellers who did not react to buyers’ textual cues.
Virtual cognition
Some investigations have examined the impact of virtual reality (VR) training on negotiation success. In one study, the VR training exposed users to virtual cognitions (operationalized via virtual voice-overs during the negotiation with virtual characters) with the aim of improving negotiation knowledge and self-efficacy (Ding et al., 2020). The voice-overs provided communicators with a stream of reflective thoughts regarding the negotiation and their performance. Voice-overs that included self-motivational statements led to the greatest increases in negotiator self-efficacy.
Conclusion
The pandemic legitimized and proliferated the use of virtual communication as an essential business tool. The virtually intelligent negotiator optimizes the use of virtual communication to achieve both relational and economic outcomes in negotiation. Armed with the knowledge that most people believe that e-negotiations produce immediate distrust, temptation to deceive, and lower satisfaction, the virtually intelligent negotiator takes proactive steps to minimize these negative expectations and leverage the advantages of virtual communication media.
Recommended Reading
Geiger, I. (2020). (See References). A comprehensive review of theory and empirical research on communication media and negotiation spanning six decades.
Kurtzberg, T. R. (2014). Virtual teams: Mastering communication and collaboration in the digital age. Praeger. A book that explores how negotiation, teamwork, decision-making, and communication are affected when people are not physically co-present, with insights from several fields.
Thompson, L. (2022). (See References). A fairly comprehensive review of how virtual communication differs from traditional in-person communication that considers research on mutual gaze, directional gaze, and other communication phenomena.
Thompson, L., & Wang, C. S. (2022). (See References). A book designed for researchers and theorists that covers the history of behavioral negotiation research and reviews several key paradigms across many disciplines, including behavioral economics, social psychology, and communication studies.
