The Effectiveness of Gifts as Unilateral Initiatives in Bargaining

Unilateral initiatives are intended to overcome hostility and impasse in bargaining by eliciting trust and thereby allowing for positive bargaining behavior. Previous research demonstrates the effectiveness of unilateral initiatives in the form of small symbolic concessions on the focal issue under negotiation. This study demonstrates the effectiveness of gift giving as unilateral initiatives and assesses the importance of two dimensions of gift giving—the cost of the gift to the giver and the benefit to the receiver. Subjects negotiated with a simulated actor that made unilateral initiatives in the form of gifts. The cost and benefit of the gifts were manipulated, and results indicate that the cost of the gifts was important in determining bargaining behavior (concession making and fine use) while the benefit of the gifts was less so. The effectiveness of gifts as unilateral initiatives implies the generality of the effect of initiatives across exchange domains.