Organizational Behavior and Human Decision Processes 168 (2022) 104108
Contents lists available at ScienceDirect
Organizational Behavior and Human Decision Processes
journal homepage: www.elsevier.com/locate/obhdp
When we should care more about relationships than favorable deal terms in
negotiation: The economic relevance of relational outcomes (ERRO)
Einav Hart a, b, *, Maurice E. Schweitzer b
a
b
George Mason University, United States
University of Pennsylvania, United States
A R T I C L E I N F O
A B S T R A C T
Keywords:
Negotiation
Dual concern theory
Negotiation context
Service negotiation
When should negotiators care relatively more about their relationships with their counterparts than about the
deal terms? We introduce a new dimension to characterize negotiation contexts to answer this question: the
Economic Relevance of Relational Outcomes (ERRO). ERRO reflects the extent to which the total economic value
of a negotiation hinges on the strength of a negotiator’s post-negotiation relationship with their counterpart. For
example, in hiring a tutor, a student may derive economic value from both the wage and the quality of the tutor’s
post-agreement service; if the student’s post-negotiation relationship with the tutor influences the quality of the
service, this negotiation context is high ERRO. Importantly, although ERRO is an objective feature of the
negotiation context for each negotiator, individuals may perceive their negotiation context to have higher or
lower ERRO than it actually does. Across four experiments (N = 1601), we identify ERRO as a fundamental
dimension of negotiation contexts. We find that in high ERRO contexts (e.g., many services, such as hiring a
tutor) compared to low ERRO contexts (e.g., buying a couch), individuals negotiate more collaboratively, are
more likely to privilege relational concerns over favorable deal terms, or may even forgo negotiating altogether.
Compared to negotiators who build poor relationships, negotiators who build positive relationships with their
counterparts attain better economic outcomes in high ERRO contexts because their counterparts invest greater
effort following the negotiation. By introducing ERRO, our work underscores the importance of post-negotiation
behavior and identifies when, how, and why relational outcomes influence economic outcomes.
1. Introduction
We negotiate for many consequential outcomes in our professional
and personal lives. A large and growing literature has substantially
advanced our understanding of negotiators’ concerns, strategies, and
outcomes (Bazerman et al., 2000; Brett et al., 2007; Gunia et al., 2016;
Novemsky & Schweitzer, 2004; Raiffa, 1982; Thompson et al., 2010).
This work has identified economic concerns and relational concerns as
two key dimensions of the negotiation process (Carnevale & Pruitt,
1992; Curhan et al., 2006; Gunia et al., 2011; Pruitt, 1998). These “dual
concerns” are often conceptualized as separable and even orthogonal (e.
g., Carnevale & Probst, 1998; Carnevale & Pruitt, 1992; Pruitt & Rubin,
1986; Van Lange, 1999). Although prior work has found that negotiators
who prioritize relational concerns choose different negotiation strate­
gies and develop better relational outcomes than those who do not, no
prior work has identified contextual features of a negotiation that might
influence why or when negotiators might prioritize relational concerns.
In our investigation, we introduce a novel dimension to characterize
negotiation contexts: the Economic Relevance of Relational Outcomes
(ERRO). We conceptualize ERRO as a continuum that reflects the extent
to which a negotiation counterpart’s post-negotiation behavior can in­
fluence a negotiator’s overall (“final”) economic outcome. ERRO is a
fundamental dimension of every negotiation context for every negoti­
ator and determines when, how, and why negotiators should privilege
relational outcomes relative to favorable deal terms.
Consider a party planner who negotiates with a caterer. The party
planner might care not only about obtaining favorable deal terms but
also about their relationship with the caterer, because a poor relation­
ship may diminish the caterer’s motivation and consequently harm the
quality of the service the caterer delivers, which ultimately yields a poor
economic outcome. Conversely, a buyer who negotiates for a new out­
door BBQ grill may be relatively unconcerned about their relationship
with the seller since this relationship – and the seller’s post-negotiation
motivation to help the buyer – may not impact the quality of the BBQ
* Corresponding author at: George Mason University, 4400 University Drive MSN 5F5, Fairfax VA 22030-4022, United States.
E-mail address: ehart8@gmu.edu (E. Hart).
https://doi.org/10.1016/j.obhdp.2021.104108
Received 31 July 2020; Received in revised form 8 November 2021; Accepted 16 November 2021
Available online 12 December 2021
0749-5978/© 2021 Elsevier Inc. All rights reserved.
E. Hart and M.E. Schweitzer
Organizational Behavior and Human Decision Processes 168 (2022) 104108
grill. In these examples, we characterize the catering negotiation as high
ERRO for the party planner, and the BBQ grill negotiation as low ERRO
for the buyer.
In general, negotiations for service purchases (e.g., catering) are
likely to be characterized by higher ERRO than negotiations for product
purchases (e.g., BBQ grill). Often, however, negotiations for products
involve a service component. For example, when purchasing a new grill
(a product), how the grill is delivered and assembled (a service deter­
mined by the counterpart’s motivation) might matter. As a result, we
conceptualize ERRO as continuous and highly context dependent; it
cannot simply collapse onto a service-product dichotomy.
In contrast to prior negotiation scholarship that has used deal terms
to represent economic outcomes, we conceptualize the total economic
value negotiators derive from a negotiation to include both deal terms
(e.g., how much an employer pays in wages) and post-negotiation
behavior (e.g., how hard the employee works after receiving that
wage), which may depend on the relationship between negotiators. Of
course, negotiators may generally derive utility from developing a
positive relationship, but in contrast to prior work that has considered
relational outcomes, ERRO identifies how, when, and why relational
outcomes impact economic outcomes across negotiation domains and
roles. That is, no prior work has considered how a structural feature of
the negotiation context might influence the economic value a negotiator
derives from developing a positive relationship.
We define “high ERRO” contexts as domains in which a counterpart’s
post-agreement motivation and behavior can substantially change the
economic value that a negotiator derives from the negotiation. That is,
high ERRO contexts occur when there is a strong relationship between
negotiators’ relational outcomes and their economic outcomes. For
example, consider a manager who negotiates with a new recruit. The
economic value the manager derives from the negotiation is not simply
reflected by the deal terms; instead, a great deal of the economic value
the manager derives from the negotiation occurs after the negotiation
concludes. As a result, the relationship the manager and recruit develop
through the negotiation may influence the recruit’s post-negotiation
motivation, and ultimately influence the manager’s economic outcome.1
We define “low ERRO” contexts as exchanges in which a negotiator’s
counterpart’s post-agreement motivation can only weakly, if at all, in­
fluence the economic value the negotiator derives from the negotiation.
That is, in low ERRO contexts, negotiator’s relational and economic
outcomes are only weakly related.
This conceptualization of ERRO reflects an objective relationship.
That is, in objectively high ERRO contexts, a negotiator’s relational
outcomes significantly influence their economic outcomes, and in
objectively low ERRO contexts they do not. Importantly, however, ne­
gotiators’ perceptions of ERRO may diverge from the objective reality.
In developing our theoretical framework, we consider the possibility
that negotiators’ subjective perceptions of ERRO – the extent to which
the negotiator believes that a good relationship will or will not influence
their final economic outcome – may diverge from objective ERRO. That
is, we distinguish objective ERRO from perceived ERRO.
In Fig. 1, we depict how perceived ERRO influences negotiators’
concerns and behavior. We assert that a negotiator’s perceived ERRO
will influence their negotiation strategy and behavior as they assess the
relative importance of privileging relational versus deal term concerns.
In Fig. 2, we depict how objective ERRO moderates the relationship
between relational outcomes and post-negotiation economic outcomes.
We conceptualize economic outcomes to include both deal terms (e.g.,
Fig. 1. Perceived Economic Relevance of Relational Outcomes (Perceived
ERRO), Negotiator Concerns, and Negotiation Behavior. Note. The Economic
Relevance of Relational Outcomes (ERRO) is a fundamental dimension of the
negotiation context for each negotiator: a continuum that reflects the extent to
which the negotiator’s relational outcome influences their final, postnegotiation economic outcome. We expect each negotiator’s perception of
ERRO to influence the extent to which they privilege relational concerns rela­
tive to deal terms when they negotiate. A negotiator’s perception of ERRO is
likely to be influenced by their role and individual characteristics.
Fig. 2. Economic Relevance of Relational Outcomes (ERRO) and Negotiation
Outcomes. Note. The Economic Relevance of Relational Outcomes (ERRO)
moderates the influence of a negotiator’s relational outcome with their final,
post-negotiation economic outcome. ERRO is context-dependent and can vary
across negotiators within the same negotiation. For example, when negotiating
with a babysitter, the negotiation may be high ERRO for the parent, but low
ERRO for the babysitter. In high ERRO contexts, a negotiator’s relational out­
comes are closely linked with their economic outcomes; in low ERRO contexts,
a negotiator’s relational outcomes are only weakly linked with their eco­
nomic outcomes.
wage) and post-negotiation behavior.
Across four experiments (N = 1601), we document the importance of
ERRO. We distinguish high ERRO from low ERRO negotiation contexts
and demonstrate how negotiator behavior, deal terms, and postnegotiation behavior and outcomes differ between high and low ERRO
contexts. Although little prior negotiation scholarship has considered
how contextual differences might influence relational concerns, we
reveal that negotiators readily recognize the economic relevance of their
counterpart’s post-negotiation behavior (ERRO) and negotiate very
differently in high and low ERRO contexts. Specifically, we show that in
high ERRO contexts, compared to low ERRO contexts, negotiators: (1)
are more concerned about their relationship with their counterpart; (2)
are more likely to privilege relational concerns in their negotiation
behavior: they negotiate less competitively and more collaboratively;
and as a result (3) build better relationships that ultimately (4) motivate
their negotiation counterparts to exert greater post-negotiation effort in
ways that boost their economic outcomes.
We advance our conceptualization and understanding of the nego­
tiation process in three key ways. First, perceived ERRO explains when
1
Though this assertion might sound readily apparent, it is not how prior
negotiation scholarship has studied or conceptualized salary negotiations (see a
substantial literature that has used cases such as “New Recruit” that has
conceptualized salary negotiations as single-shot experiences that conclude
with a signed deal sheet; e.g., Amanatullah & Tinsley, 2013; Curhan & Over­
beck, 2008; Wiltermuth & Neale, 2011).
2
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
and why negotiators are more or less likely to privilege relational over
deal term concerns. Our work stands in sharp contrast to prior work that
has either overlooked the potential relationship between relational and
economic outcomes or conceptualized relational and economic concerns
as distinct dimensions of negotiation outcomes (e.g., Carnevale &
Probst, 1998; Pruitt & Rubin, 1986; Van Lange, 1999). By introducing
the ERRO construct, we explicitly characterize when and why relational
concerns and deal term concerns are relatively more important for
economic outcomes.
Second, we identify when and how negotiators’ relational outcomes
are associated with their economic outcomes within a single negotia­
tion. This is distinct from the important influence relational outcomes
can also exert on subsequent negotiations. Notably, we assert that the
dominant experimental paradigm that scholars have used to study ne­
gotiations – single-shot hypothetical negotiations – has severely limited
our ability to understand post-negotiation behavior. This includes postnegotiation behavior that may be directly relevant to economic out­
comes. For example, a popular negotiation simulation asks participants
to assume the role of a job recruiter and a job candidate. The simulation
ends when negotiators reach an agreement or an impasse, and scholars
have used the negotiated deal terms to determine economic outcomes.
In some cases, scholars have tried to measure relational outcomes as a
separate outcome dimension. For example, negotiation scholars might
conclude that expressing anger in a negotiation may improve economic
outcomes but harm relational outcomes (Côté et al., 2013; Van Kleef &
Côté, 2007). We assert that this paradigm and this approach fall short in
approximating real-world behavior and outcomes. Specifically, we
argue that in a context like a job negotiation (high ERRO), relational
outcomes can profoundly influence final economic outcomes. By over­
looking what happens after the negotiation (e.g., the job candidate
actually works for the company and may be poorly motivated), the
existing negotiation literature has neglected to consider when, how, and
why relational outcomes influence economic outcomes.
By introducing ERRO, we also introduce a theoretical framework to
explain conflicting findings in the existing literature. Prior work has
found that relational concerns are sometimes positively related to eco­
nomic outcomes (Curhan et al., 2006, 2010; Kong et al., 2014), and
other times negatively related to economic outcomes (Amanatullah
et al., 2008; Beest et al., 2008; Bowles et al., 2007). We assert and
demonstrate that relational outcomes are strongly (positively) related to
economic outcomes in high ERRO contexts, but not in low ERRO
contexts.
Third, through ERRO, we fundamentally advance our understanding
of subjective outcomes (Becker & Curhan, 2018; Curhan et al., 2006,
2009, 2010; Hart & Schweitzer, 2020). By introducing ERRO, we
explain when and why subjective outcomes influence post-negotiator
behavior and economic outcomes. That is, our investigation advances
the subjective value literature by identifying when and why subjective
outcomes matter.
in negotiation (e.g., Carnevale & Probst, 1998; Pruitt & Rubin, 1986;
Van Lange, 1999).
Negotiation scholarship has assumed that negotiators are very con­
cerned about their own deal terms (Bazerman & Neale, 1993; Fisher
et al., 1991), and that they also often care about their relationship with
the counterpart (Amanatullah et al., 2008; Bear et al., 2014; Becker &
Curhan, 2018; Bowles et al., 2007; Gaspar et al., 2019; Gelfand et al.,
2006; Gunia et al., 2016; Moran & Schweitzer, 2008). In a theoretical
paper, Gelfand et al. (2006) suggest that negotiators may have varying
levels of desire for connectedness with others (“relational self-con­
strual”), depending on negotiators’ personality characteristics and cul­
ture, as well as their existing relationship with their negotiation
counterpart. For example, women are more likely than men to be con­
cerned about their relationship with their negotiation counterpart
(Amanatullah, Morris, & Curhan, 2008; Bowles, Babcock, & Lai, 2007),
and individuals from collectivistic, interdependent cultures (e.g., China,
Japan) are more likely to be concerned about their relationships than
those from individualistic cultures (e.g., USA) (Gelfand et al., 2012;
Gunia et al., 2016). Notably, this work focuses on individual-level fac­
tors that might inform the importance of relational concerns. In contrast
to this work, we identify ERRO as a contextual factor that reflects the
negotiation domain and the negotiator’s role. ERRO explains when and
why negotiators should privilege relational concerns relative over deal
term concerns.
We postulate that high ERRO contexts cause negotiators to become
more likely to focus on their relationship with their counterpart, because
the counterpart’s post-negotiation behavior exerts greater impact on the
negotiator’s economic outcomes. For example, in high ERRO contexts
such as hiring a tutor, compared to low ERRO contexts such as pur­
chasing educational books, negotiators will be relatively more con­
cerned about their relationship with their counterpart than about the
deal terms (see Fig. 1).
Hypothesis 1. Compared to contexts in which negotiators perceive
low ERRO, when negotiators perceive high ERRO, they will be more
concerned about developing a positive relationship with their
counterpart.
1.2. Negotiation strategies
Scholars typically distinguish between two broad categories of
negotiation strategies: 1) Competitive or aggressive strategies that claim
value and 2) Collaborative or integrative strategies that focus on un­
derstanding the other parties’ interests and creating joint value (Car­
nevale & Pruitt, 1992; Deutsch, 1973; Hüffmeier et al., 2014; Kimmel
et al., 1980; Van Kleef et al., 2004; Walton & McKersie, 1965; Weingart
et al., 2004). For example, competitive strategies include expressing
anger (Mislin et al., 2011; Overbeck et al., 2010; Van Kleef & De Dreu,
2010) and making extreme offers (Gunia et al., 2011; Schaerer et al.,
2015; Schweinsberg et al., 2012), whereas collaborative strategies
include asking questions (Gunia et al., 2011; Koole et al., 2000; Pinkley
et al., 1995), engaging in small-talk (Mislin et al., 2011; Morris et al.,
2002; Shaughnessy et al., 2015), and expressing positive emotions
(Anderson & Thompson, 2004; Van Kleef et al., 2004).
Negotiators’ goals and concerns influence their strategy choices
(Amanatullah et al., 2008; Carnevale & Pruitt, 1992; Curhan et al., 2008;
Gelfand et al., 2006; Kimmel et al., 1980; O’Connor & Arnold, 2011;
Patton & Balakrishnan, 2010; Ten Velden et al., 2009). For example,
prior work has found that negotiators who have strong relational goals
(e.g., women) make more generous offers and are more willing to
compromise (Amanatullah et al., 2008; Howard et al., 2007; Patton &
Balakrishnan, 2010). Conversely, negotiators with low relational goals
are more likely to negotiate aggressively, act dominantly, and make
extreme offers (Magee et al., 2007; Ten Velden et al., 2009).
Prior work has also found that negotiators often anticipate the con­
sequences of their actions on their relationship with their counterpart
1.1. Negotiators’ pre-negotiation concerns
Scholars have assumed that negotiators have common and
competing interests. For example, Fisher et al. (1991, p. xvii) defines
negotiation as “back-and-forth communication designed to reach an
agreement when you and the other side have some interests that are
shared and others that are opposed.” Similarly, scholars have assumed
that negotiators seek to balance cooperative and competitive motives
(Anderson & Galinsky, 2006; Curhan & Brown, 2012; Hart & Schweit­
zer, 2020; Schaerer et al., 2020). Carnevale and Pruitt (1992) introduced
the Dual Concern model, which highlights “self-concern” and “rela­
tional-concern” (or “other-concern”) as two primary concerns for ne­
gotiators. A substantial literature has built on this classic work; although
some theories allow for the co-occurrence or some correlation between
concerns, this literature has largely conceptualized concern for one’s
own outcome and concern for the relationship as orthogonal dimensions
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
determines when and why relational outcomes matter.
By introducing ERRO, we also reconcile conflicting findings in the
negotiation literature. A substantial literature describes a compensatory
relationship between economic and relational outcomes: negotiators can
achieve better economic outcomes by sacrificing relational outcomes or
boost relational outcomes at the expense of economic outcomes. For
example, by using competitive and aggressive tactics such as expressing
anger, making an aggressive first offer, and exaggerating one’s position,
negotiators can improve their deal terms (Bazerman et al., 2000; Brett
et al., 2007; De Dreu et al., 2007; Friedman et al., 2004; Galinsky &
Schweitzer, 2015; Gunia et al., 2016; Pinkley et al., 1994; Raiffa, 1982;
Thompson et al., 2010). Yet, these tactics may harm negotiators’ re­
lationships and impressions (Bhatia & Gunia, 2018; Bottom et al., 2006;
Campagna et al., 2016; Mislin et al., 2011; Schweitzer et al., 2002; White
et al., 2004).
Other negotiation scholarship, however, has found a positive asso­
ciation between relational and economic outcomes (Bazerman & Neale,
1991; Curhan et al., 2010; Kong et al., 2014; Morris et al., 2002; Morris
& Keltner, 2000; Tinsley et al., 2002). This work has found that nego­
tiators who foster trust and build a good relationship with their coun­
terpart are more likely to attain favorable deal terms in the negotiation
(e.g., Kong et al., 2014). Related work finds that individuals who
develop positive relationships and reputations are more likely to sub­
sequently form beneficial partnerships and be willing to collaborate in
the future (Curhan et al., 2009; Drolet & Morris, 2000; Glick & Croson,
2001; Mannix et al., 1995).
These two streams of research present a puzzle. To attain the best
economic outcomes, should negotiators employ assertive negotiation
tactics that sacrifice relational outcomes? Or should they build re­
lationships to attain the best economic outcomes?
By introducing ERRO, we answer these questions. In high ERRO
contexts, negotiators who attend to relational concerns will attain better
economic outcomes. In low ERRO contexts, negotiators who prioritize
deal term concerns will attain the best economic outcomes.
Most negotiation studies have either explicitly or implicitly assumed
that the negotiated deal terms represent the economic value of the
negotiation process. To date, surprisingly few investigations have
considered negotiators’ post-agreement behavior (see Campagna et al.,
2016; Friedman et al., 2020; Hart & Schweitzer, 2020; Mislin et al., 2011
for exceptions). Instead, the dominant experimental paradigm for
studying negotiations involves a single-shot negotiation that concludes
once the parties agree on a term sheet. This is true for nearly every
negotiation context from purchasing cell phones to hiring a “New Re­
cruit” to “Merging Companies” (Bowles et al., 2007; Overbeck et al.,
2010; Pinkley et al., 2019; Wiltermuth & Neale, 2011). Across these
varied contexts, the underlying structure of the negotiation exercises is
nearly identical. Importantly, in these prior negotiation studies, the
exercise ends when negotiators record their negotiated outcome and
specify the terms of the deal. Even for negotiation studies that explicitly
consider service and employment contexts (Bowles & Babcock, 2013;
Curhan et al., 2008; Curhan & Overbeck, 2008; Overbeck et al., 2010;
Wiltermuth et al., 2018; Wiltermuth & Neale, 2011), there is never a
post-negotiation “employment” period in which negotiators’ relational
outcomes and their resulting post-agreement motivation might influ­
ence the economic value of the negotiation. That is, even in contexts
when relational concerns are almost certain to influence the economic
value of a negotiated agreement, prior work has overlooked this possi­
bility. This has significantly limited our understanding of negotiations.
For example, prior scholarship that finds that assertive negotiation
strategies enable recruiters to gain favorable deal terms with a recruit
may overstate the value of employing aggressive strategies.
In contrast to prior work that has either overlooked the importance
of relational concerns or found inconsistent relationships between
relational concerns and economic outcomes, we develop a framework to
explain when and how relational outcomes matter. By introducing ERRO,
we explicate the relationships among relational outcomes, post-
(Bear & Segel-Karpas, 2015; Curhan et al., 2008; O’Connor & Arnold,
2011; Patton & Balakrishnan, 2010). For instance, women often expect
that initiating a negotiation and negotiating aggressively will harm their
relational outcomes (Amanatullah & Morris, 2010; Babcock et al., 2006;
Bowles et al., 2007, 2019). As a result of both increased relational
concerns and expected backlash for negotiating, women negotiate less
often than men, and negotiate less assertively and less aggressively when
they do (Amanatullah et al., 2008; Bowles et al., 2007). Negotiators’
cultural background is also likely to influence their expectations of how
competitive negotiations will be, as well as their relational goals, and
consequently determine their negotiation strategies (Gelfand et al.,
2012; Gelfand & Brett, 2019; Gunia et al., 2011, 2016; Rudman &
Fairchild, 2004).
Taken together, prior work suggests that negotiators choose collab­
orative strategies to promote relational outcomes. Thus, the more in­
dividuals care about maintaining a good relationship with their
counterpart, the less likely they will be to employ competitive negoti­
ation strategies, and the more likely they will be to employ collaborative
tactics. We build on Hypothesis 1, predicting that high ERRO increases
negotiators’ relational concerns, to conjecture that ERRO influences
negotiators’ willingness to use collaborative, rather than competitive,
negotiation tactics due to heightened relational concerns (see Fig. 1).
Hypothesis 2. Compared to when negotiators perceive low ERRO,
when negotiators perceive high ERRO, they will be more likely to choose
negotiation tactics that privilege relational gains over favorable deal
terms.
Hypothesis 3. Negotiators’ relational concerns will mediate the in­
fluence of ERRO on negotiator behavior.
1.3. Relational outcomes and post-negotiation behavior
Mirroring the conceptualization of negotiators’ dual concerns,
negotiation scholars have conceptualized two distinct types of out­
comes: economic outcomes (the terms of the deal or “objective
outcome”), and relational outcomes (“subjective outcome”). Though
early bargaining and negotiation scholarship focused on economic
outcomes, important scholarship advanced our understanding of sub­
jective outcomes (Curhan et al., 2006, 2008, 2009, 2010; Curhan &
Brown, 2012). This work maps negotiators’ subjective outcomes along
three dimensions: (1) Self-perception (e.g., competence and happiness);
(2) Process-perception (e.g., fairness and ease of the negotiation pro­
cess); and (3) Relational-perception, the extent to which the negotiation
builds trust and a future relationship. Theoretical work often assumes
that negotiators’ subjective outcomes are distinct from their objective,
economic outcomes. For example, Curhan and Brown (2012, p. 586)
state, “a negotiator needs to gauge which types of ends are most
important.”
In our investigation, we focus on relational outcomes, a key dimen­
sion of subjective outcomes. Relational outcomes are particularly likely
to influence a counterpart’s post-negotiation behavior in ways that in­
fluence a negotiator’s future outcomes. For example, prior work has
found that negotiators who experience greater subjective value attain
better outcomes in a subsequent negotiation with the same counterpart
(Curhan et al., 2010) and have lower turnover intentions (Curhan et al.,
2009). This work demonstrates that subjective outcomes affect in­
tentions and behavior – and that subjective outcomes may be quite
important. Missing from this line of investigation, however, is when
negotiators’ subjective outcomes are more or less important. Also
largely missing from prior work is the conceptualization of the negoti­
ation process as only one part of the economic relationship between
counterparts. For example, even if a negotiator had no intention of ever
hiring a caterer again for a future job, they may still value relational
concerns in their present negotiation, because the caterer’s postnegotiation behavior will influence their economic outcomes. We
identify ERRO as a critical feature of negotiation contexts and roles that
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
negotiation behavior, and economic outcomes (see Fig. 2).
We assert that relational outcomes influence how motivated a
negotiation counterpart is to assist the negotiator after the negotiation.
ERRO determines the extent to which this motivation matters for the
negotiator’s economic outcome. For example, an assertive car buyer
who harms relational outcomes may curtail a seller’s motivation to help
the buyer after the negotiation. After receiving the title and keys for the
car, however, the seller’s motivation is unlikely to impact the buyer. In
contrast, a buyer who harms their relationship with a caterer may harm
the caterer’s motivation to help the buyer after the negotiation. In this
case, the caterer’s motivation may directly impact the buyer’s economic
outcome (and gastronomic wellbeing).
negotiations and when participants can choose as many strategies as
they wish without explicitly trading-off collaborative and competitive
tactics.
We preregistered all of our studies and report all experimental con­
ditions, exclusion criteria,2 and the measures we analyzed in the method
section of each study. The data, preregistrations, and materials from all
studies can be found in the ResearchBox online repository (https://resea
rchbox.org/366&PEER_REVIEW_passcode=JWVHNH).
2. Pilot Study: High ERRO and low ERRO contexts
We conducted a preregistered pilot study https://aspredicted.
org/blind.php?x=bf5t2s to assess ERRO scores across negotiation con­
texts. We recruited 968 participants via Facebook Marketplace to
participate in a study for $5 Amazon gift cards (425 female; Mage = 33.2,
SD = 7.6).3 Each participant rated six negotiation contexts, presented in
a random order. In each scenario, we asked participants to imagine that
they wanted to buy a product (couch, electronic vacuum, smartphone)
or hire a service provider (housecleaner, mover, tutor; see Appendix A
for full text). We asked participants to imagine that they had negotiated
with a counterpart (one of six different male names, e.g., “Daniel”) for
this service or product. We told participants that they had agreed on a
price and at the end of the negotiation they had an OK relationship with
their counterpart.
For each scenario (service or product), we asked two focal questions.
First, we asked participants to imagine that if instead of an OK rela­
tionship, they had developed a good relationship, and to describe how
that difference would impact the value of the service or product they
received, on a scale from − 10: “Much Worse” to +10: “Much Better.”
Second, we asked participants to imagine that if instead of an OK rela­
tionship, they had developed a bad relationship, and to describe how
that difference would impact the value of the service or product they
received (from − 10 to +10). For each item, we calculate ERRO as the
difference between the good relationship rating and the bad relationship
rating.
Hypothesis 4. ERRO will moderate the link between a negotiator’s
relational outcome with their counterpart and their economic outcome.
Specifically, in high ERRO contexts, higher relational outcomes will be
strongly associated with higher economic outcomes. In contrast, rela­
tional and economic outcomes will not be associated in low ERRO
contexts.
1.4. Overview of studies
Across our studies, we investigate the economic relevance of nego­
tiators’ relationships (ERRO) across different negotiation contexts: We
explore how ERRO impacts negotiators’ concerns, negotiation strate­
gies, and post-negotiation behavior and outcomes. Across all four
studies, we test Hypotheses 1, 2, and 3, and we show that negotiators
have higher relational concerns in high ERRO contexts than they do in
low ERRO contexts. We demonstrate that negotiators with greater
relational concerns are more likely to privilege negotiation strategies
that promote relationship-building over strategies focused on attaining
favorable deal terms, and we show that in high ERRO contexts these
strategies improve post-negotiation economic outcomes.
In our pilot study, we surveyed users of a large online marketplace
and find that ERRO is higher for services than it is for products. In Study
1, we survey individuals who had purchased services and products in a
second online marketplace to measure the relative importance of rela­
tional concerns and favorable deal terms across high and low ERRO
contexts, and we link these concerns with negotiation behavior. In Study
2, we introduce a novel negotiation paradigm to directly test the extent
to which negotiators privilege relational outcomes over favorable deal
terms in high ERRO contexts.
In Studies 3a and 3b, we manipulate ERRO within an incentivecompatible employment context that involves a post-negotiation stage
that impacts economic outcomes. In these studies, we document
important links among ERRO, relational concerns, post-negotiation
effort, and economic outcomes. In Study 4, we conduct a dyadic,
incentive-compatible online negotiation between bosses and workers.
This study involves a post-negotiation effortful task that influences
economic outcomes. In this study, we document the impact of ERRO on
negotiators’ concerns, negotiator behavior, relational outcomes, postnegotiation effort, and economic outcomes.
In the Supplementary Online Materials, we report three additional
studies that demonstrate the impact of ERRO on participants’ preference
for collaborative tactics over competitive strategies. We find very similar
patterns of results when we manipulate ERRO within service
2.1. Results
Consistent with our preregistration, we focus on the withinparticipant difference between the average ERRO score for the three
products (Cronbach’s α = 0.859) and the average ERRO score for the
three services (α = 0.867); we report means and standard deviations for
each item in Table 1.
Participants rated the service exchanges as substantially higher
ERRO (M = 6.22, SD = 6.84) than the product exchanges (M = 5.56, SD
= 6.39; paired-t(967) = 4.66, p < .001; Cohen’s d = 0.150). We find the
same result when we regress ERRO scores for all six items by category
(service or product), controlling for the item number as a dummy var­
iable, and clustering the model variance by participant to account for the
repeated observations: The three services have higher ERRO than the
products (B = 0.662, t(962) = 2.98, p = .003).
We next analyzed the difference between services and products for
2
We preregistered and used the same exclusion criteria for each study.
Specifically, we immediately excluded participants who responded they did not
live in the USA, were not fluent in English, or failed an attention-check ques­
tion. Participants who failed these questions did not continue with the survey
past the initial questions (and were not included in the total sample size). At the
end of each study, we had a comprehension question: participants completed
the study even if they failed that question. Consistent with our preregistration,
we report results for participants who passed our attention checks. We note that
all of our key results hold when we conduct the analyses with the full sample.
3
We preregistered a sample size of at least 300 participants, and that we
would continue data collection after a week if we did not obtain that sample.
On the first day of the study we substantially surpassed our intended sample
size.
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(from “Never” to “More than 10 times”). We defined products for par­
ticipants as “any type of object that one person owns and transfers to
another in exchange for compensation. For instance, electronics, furni­
ture, cars.” We defined services for participants as “any activity that one
person does for another in exchange for compensation. For instance,
assembling furniture, cleaning, moving.” We next asked participants
about their most recent exchange on Craigslist (purchase product, pur­
chase service, sell product, or provide service), and we focused our
questions on this most recent exchange.
Table 1
The Impact of the Relational Outcome on the Economic Outcome across Prod­
ucts and Services (Pilot Study, N = 968).
Services (average)
Cleaner
Mover
Tutor
Products
(average)
Couch
Vacuum
Smartphone
ERRO (Good - Bad)
Good Relationship
Bad Relationship
6.22 (6.84)
5.99 (7.76)
6.23 (7.75)
6.44 (7.79)
5.56 (6.39)
5.29 (2.90)
5.21 (3.73)
5.26 (3.69)
5.41 (3.73)
4.90 (3.02)
¡0.93 (5.41)
− 0.78 (5.89)
− 0.96 (6.05)
− 1.03 (6.03)
¡0.66 (5.13)
5.78 (7.27)
5.57 (7.27)
5.35 (7.33)
5.01 (3.72)
4.91 (3.75)
4.79 (3.74)
− 0.77 (5.76)
− 0.66 (5.68)
− 0.56 (5.65)
3.1.3. Relational and deal term concerns
We asked participants to indicate how important different concerns
were in their interaction with their counterpart (i.e., the provider of the
product or of the service). Participants indicated the importance of
relational concerns, rating three statements including, “I wanted to have
a good relationship with the counterpart,” (Cronbach’s α = 0.883), and
the importance of favorable deal terms (“I wanted to get the best deal for
myself”), on a scale from 1: “Not at all” to 5: “Extremely”. We present the
full list of items we used in Appendix B.
Note. Ratings reflect how developing a good (compared to an OK) and a bad
(compared to an OK) relationship with a negotiation counterpart would impact
the economic outcome of the negotiation (from − 10: Much worse to +10: Much
better). We define ERRO as the difference between these two ratings. ERRO is
larger for service negotiations than for product negotiations. Participants ex­
pected good relationships and bad relationships to have a larger influence on the
economic value for services than for products. We report average ratings and
standard deviations in parentheses.
3.1.4. Negotiation behavior
We asked participants if they had attempted to negotiate any terms of
the deal (Yes/No) and who had initiated the discussion (themselves or
their counterpart, since on the website, both would-be buyers and
would-be sellers can post ads and message others).
Participants completed the survey by answering demographic
questions.
the good relationship and bad relationship rating questions separately.
Participants thought that a good relationship would be more beneficial
for the value of services than for products (MServices = 5.29, SD = 2.90 vs.
MProducts = 4.90, SD = 3.02; paired-t(967) = 4.85, p < .001; Cohen’s d =
0.156). Similarly, participants thought that a bad relationship would be
more harmful for services than for products (MServices = − 0.93, SD =
5.41 vs. MProducts = − 0.66, SD = 5.13; paired-t(967) = 2.89, p = .004;
Cohen’s d = 0.095).
3.2. Results
3. Study 1: High and low ERRO negotiations in an online
marketplace
3.2.1. Relational and deal term concerns
Buyers in high ERRO contexts, who purchased services, reported
higher relational concerns (M = 3.51, SD = 0.98) than participants in
low ERRO contexts, who bought products (M = 3.14, SD = 1.11; t(398)
= 3.60, p < .001; Cohen’s d = 0.361). This result supports our prereg­
istered Hypothesis 1, and we depict these values in Fig. 3. Buyers’
concern for favorable deal terms was similar in the high ERRO (M =
3.86, SD = 1.00) and low ERRO contexts (M = 3.97, SD = 1.07; t(398) =
− 1.06, p = .291; Cohen’s d = 0.106). We also note that buyers’ rela­
tional concern was lower than their deal term concern in both the high
ERRO condition (t(205) = − 4.08, p < .001) and the low ERRO condition
(t(193) = − 8.37, p < .001), as well as across conditions (t(399) = − 8.95,
p < .001).
In Study 1, we surveyed buyers who had reached agreements on
Craigslist (craigslist.org), an online marketplace that facilitates millions
of service and product exchanges between buyers and sellers each day
(Kroft & Pope, 2014). In our survey, we assessed buyers’ relational and
deal term concerns across high and low ERRO contexts. Building on our
Pilot Study results, we operationalize high ERRO contexts as purchasing
services, and low ERRO contexts as purchasing products. We preregis­
tered this distinction and our study at AsPredicted (https://aspredicted.
org/blind.php?x=7rv3cqorg).
3.1. Method
3.2.2. Relational concerns and negotiation behavior
In analyzing buyers’ negotiation behavior, we excluded 56 buyers
who did not remember if they had initiated a negotiation (26 in low
ERRO and 30 in high ERRO). Buyers were less likely to initiate a
3.1.1. Participants
We surveyed 770 Craigslist users via MTurk (362 female; Mage =
36.74, SD = 10.92). We paid participants a flat payment of $1 for
completing the survey, which took on average 8 min (SD = 5). We asked
participants to describe their most recent transaction, and we found that
199 participants had sold products, 209 had purchased products, 156
had provided services, and 206 had purchased services. Consistent with
our preregistration and conceptualization of ERRO, we focused on
buyers – for whom we theorize their counterparts’ post-negotiation
motivation may be particularly important. We report results for the
400 participants (186 female; Mage = 37.2, SD = 11.5) who purchased
services or products and correctly completed attention checks. Including
the 15 buyers who failed the attention check did not affect the direction
or significance of our key findings. We report results for sellers, who
provided services or products, in the Supplementary Online Materials.
3.1.2. Procedure
We asked participants to recall their recent exchange through the
Craigslist website, and to recall their concerns and experiences. We
asked participants whether they had purchased a product through
Craigslist, sold a product, purchased a service, and provided a service
Fig. 3. Buyer’s relational and deal term concerns in high and low ERRO con­
texts (Study 1, N = 400). Note. Buyers are more concerned about their rela­
tionship with the provider in high ERRO contexts than they are in low ERRO
contexts. Error bars represent ± S.E.M.
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
negotiation in high ERRO contexts (M = 76.8%, SD = 42.3) than in low
ERRO contexts (M = 93.3%, SD = 25.0; logit regression B = − 1.440,
95% CI = [− 2.129, − 0.751]; z = − 4.10, p < .001). A Chi2 test on the
binary initiation variable showed similar results (Chi2(1) = 18.816, p <
.001).
We next tested whether buyers’ relational concerns mediate the ef­
fect of ERRO on their propensity to initiate a negotiation (as a binary
variable). We used the indirect bootstrapping technique to test for
mediation using a logit regression, with 5000 resamples. We find a
significant indirect effect of relational concerns on initiating negotiation
(B = − 0.512, 95% CI = [− 0.860, − 0.164]). We also still find a signifi­
cant direct effect of ERRO, even controlling for this indirect effect (B =
− 1.205, 95% CI = [− 2.004, − 0.607]). These results remain the same
when we include participants’ deal term concern in the model; this
variable does not have a significant impact on whether or not the buyer
initiated a negotiation (B = 0.189, z = 1.10, p = .272).
determined the sample size in advance to guarantee at least 80% power
in detecting differences above d = 0.35.
4.1.2. Procedure
Participants were buyers in a hypothetical exchange with a provider
on Craigslist. In the high ERRO condition, we informed participants that
they were looking for someone to clean their house; in the low ERRO
condition, we informed participants that they were looking for a used
vacuum. We asked participants to think about their future interaction
with the provider (seller). Participants rated the importance of relational
concern (α = 0.913) and concern for favorable deal terms (α = 0.896) on
5-point scales from 1: “Not at all” to 5: “Extremely”. We list the items in
Appendix B.
4.1.2.1. Negotiation strategy. Participants chose negotiation strategies
(“bots”) that reflected explicit trade-offs between relational and eco­
nomic concerns. First, participants chose among a set of five bots that
reflect different mixes of negotiation strategies yielding an expected
outcome indicated by: “4/7 profit; 0/7 relationship”, “3/7 profit; 1/7
relationship”, “2/7 profit; 2/7 relationship”, “1/7 profit; 3/7 relation­
ship”, or “0/7 profit; 4/7 relationship”. We included two lines of text to
describe each bot’s strategic approach and the expected outcome (Ap­
pendix C).
After participants made their first choice, they made a second stra­
tegic choice with a larger “budget.” In this second set of choices, the
bots’ expected outcomes ranged from “7/7 profit, 0/7 relationship” to
“0/7 profit, 7/7 relationship” in one-point intervals (we present the bots
in Appendix C). Based on the two choices, we calculated the IncomeConsumption Curve (ICC) as the linear slope for each participant: The
difference in relational points between the two choices divided by the
difference in deal term points. This slope measures the change in in­
dividuals’ preferences between deal terms and relationships, reflected
by the budget change. We can thus investigate the extent to which ne­
gotiators privilege relational concerns over obtaining favorable deal
terms across high ERRO and low ERRO contexts.
Finally, participants answered demographic questions. We prereg­
istered this study on AsPredicted (https://aspredicted.org/blind.php?
x=rg8he3).
3.2.3. Participant gender
Consistent with our preregistration for this study and the other
studies in this paper, we conducted exploratory analyses that included
participant gender and the interaction between gender and ERRO.
Including gender did not affect any of our key findings in this study or
any of our subsequent studies.
3.3. Discussion
In an online marketplace, we find that buyers care more about their
relationship with their counterpart in high ERRO than low ERRO con­
texts. This finding supports Hypothesis 1. We also find that buyers are
significantly less likely to initiate a negotiation in high ERRO contexts
than they are in low ERRO contexts, and that buyers’ concerns about
their relationship with their negotiation counterpart mediate their
willingness to negotiate. These findings provide initial support for our
theory and conceptualization of ERRO.
4. Study 2: Explicit trade-offs between relational and deal term
concerns
In Study 2, we investigate how negotiators trade-off relational and
deal term concerns. We develop a novel negotiation paradigm to capture
explicit trade-offs by adapting the Income-Consumption Curve frame­
work from the economics literature (see Rutherford, 2013). Specifically,
we describe negotiation “bots” that operationalize trade-offs between
better deal terms and better relational outcomes. We impose a strict
“budget,” such that better outcomes along one dimension are associated
with worse outcomes along the other dimension. Consistent with Study
1, we operationalize high ERRO as service purchases, and low ERRO as
product purchases. In this study, we randomly assign negotiators to be
buyers in either high ERRO or low ERRO contexts to rule out selfselection concerns that might have influenced our findings in Study 1.
In the Supplementary Online Materials we also report a robustness check
study (Supplemental Study 2), in which we contrast high ERRO and low
ERRO negotiations within service exchanges.
4.2. Results
4.2.1. Relational and deal term concerns
Participants were more concerned about their relationship with their
counterpart in the high ERRO condition than they were in the low ERRO
condition (M = 3.16, SD = 0.99 versus M = 2.18, SD = 0.95; t(293) =
8.59, p < .001; Cohen’s d = 1.000). Conversely, participants were less
concerned about reaching favorable deal terms in the high ERRO con­
dition (M = 4.11, SD = 0.73) than they were in the low ERRO condition
(M = 4.49, SD = 0.63; t(293) = − 4.73, p < .001; Cohen’s d = 0.550). We
depict this pattern in Fig. 4.
4.2.2. Negotiation strategy choices
In the first strategic choice, participants distributed 4 points between
relational and deal term concerns. In this first choice, participants
allocated more points to relational concerns in the high ERRO condition
(M = 1.73 out of 4, SD = 0.83) than they did in the low ERRO condition
(M = 1.06, SD = 1.01; t(293) = 6.17, p < .001; Cohen’s d = 0.725). In
the second strategic choice, participants allocated 7 points. Again, par­
ticipants allocated more points to relational than deal term concerns in
the high ERRO condition (M = 2.62 out of 7, SD = 1.28) than they did in
the low ERRO condition (M = 1.68, SD = 1.56; t(293) = 5.64, p < .001;
Cohen’s d = 0.659). We depict these results, supporting Hypothesis 2, in
Fig. 5.
Importantly, from the two choices participants made, we can
calculate the Income-Consumption Curve (ICC) as a linear slope for each
4.1. Method
4.1.1. Participants
We recruited 302 MTurkers to participate in a short study in ex­
change for $1.00 (participants spent an average of 6 min in the survey;
SD = 5). We report results from 295 participants who correctly answered
the attention check (134 female; Mage = 37.5, SD = 10.3) and note that
our results hold when we include all participants in the analyses.
Participant gender did not affect the direction or significance of any of
our key findings.
We randomly assigned participants to one of two experimental
conditions: High or low ERRO. Informed by results from Study 1, we
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
We note that the mediation findings hold when we include partici­
pants’ deal term concern in the mediation models: We find that deal
term concern significantly affected both choices (Choice 1: B = 0.375, z
= 4.35, p < .001; Choice 2: B = 0.479, z = 3.86, p < .001) and the slope
(B = − 0.141, z = − 2.44, p = .015), but we still observe a significant
indirect effect of relational concerns for all dependent variables (all p’s
< 0.024).
4.3. Discussion
In Study 2, we introduce a novel negotiation paradigm that requires
participants to make explicit trade-offs between favorable deal terms
and better relational outcomes. Across two rounds of decisions, we find
that participants’ preferences for relational outcomes were significantly
influenced by ERRO: Participants were more willing to forego better
deal terms to obtain a better relational outcome in high, rather than low
ERRO contexts.
Consistent with Study 1, participants rated relational concerns as
more important in high ERRO contexts than they did in low ERRO
contexts, providing further support for Hypothesis 1. In addition, par­
ticipants rated deal terms as relatively less important in high ERRO
negotiations. The impact of ERRO on negotiation strategies was partially
mediated by negotiators’ relational concerns, providing support for
Hypotheses 2 and 3. Taken together, these findings introduce a new
negotiation paradigm to assess relative preferences, build confidence in
the underlying ERRO construct, and bridge micro-economic research
with the negotiation literature.
Fig. 4. Relational and deal term concerns in high and low ERRO negotiations
(Study 2, N = 295). Note. Participants are more concerned about relationships
in high ERRO than low ERRO contexts, and relatively less concerned about
favorable deal terms. Error bars represent ± S.E.M.
5. Study 3: Incentivized Bosses and Workers in high and low
ERRO contexts
In Studies 3a and 3b, we manipulate ERRO directly, rather than
describe the negotiation contexts as a product or service. In Study 3a, we
extend Study 2 and assess how ERRO impacts negotiators’ concerns and
trade-offs in an incentive-compatible context. In Study 3b, we investi­
gate the downstream impact of negotiators’ use of competitive and
collaborative negotiation strategies on their counterparts’ postnegotiation effort and ultimately on their economic outcomes. In addi­
tion, in this study we measure relational outcomes using the subjective
value scale (SVI; Curhan et al., 2006). In this study, we assess the link
between relational outcomes and economic outcomes to test Hypothesis
4. Taken together, in Studies 3a and 3b we investigate how ERRO in­
fluences negotiator behavior, relational outcomes, post-negotiation
behavior, and economic outcomes.
Fig. 5. Negotiation strategy choices: Trading off relationship and deal term
gains when negotiating in high ERRO versus low ERRO contexts (Study 2, N =
295). Note. Participants allocate more points to improve relationships (versus
deal terms) in the high ERRO condition than they do in the low ERRO condi­
tion. Dashed lines reflect the point budgets in each choice set. Lighter dots
represent ± S.E.M.
participant. The ICC is steeper – reflecting a larger preference for
improving relational outcomes relative to deal terms – in the high ERRO
(M = 0.56, SD = 0.77) than in the low ERRO condition (M = 0.35, SD =
0.72; t(293) = 2.36, p = .019; Cohen’s d = 0.274). Put differently, in the
high ERRO condition, participants allocated about half of the additional
budget to improving their relationship with their counterpart, compared
to only a third of the additional budget to improving their relationship
with their counterpart in the low ERRO condition.
5.1. Method
For this study, we designed a novel negotiation task with a postnegotiation stage. First, the Boss and the Worker negotiate a salary.
Then, after they reach an agreement, the Worker decides how much
costly effort to exert on behalf of the Boss. We operationalize ERRO as
the relative importance of the Worker’s effort in determining the Boss’
economic outcome. In Study 3a we investigate the Boss’ concerns and
decisions; in Study 3b we investigate the Worker’s decisions and the
downstream impacts of these decisions for the Boss.
We describe the context as a “widget-selling task.” In this task, the
Worker travels to sell widgets, and decides how many miles to travel,
from 0 to 5 miles. The more the Worker travels, the more widgets they
are likely to sell, but each mile of travel is costly for the Worker. In
addition to the Worker’s travel (effort), luck plays a role in determining
total sales. Luck is a random number between 0 and 5. The Boss has a
budget from which they pay the Worker a salary for the widget-selling
task, and the Boss gets to keep what they do not pay the Worker.
After the negotiation, the Worker chooses an effort level, the luck
number is revealed, and the Boss then earns a profit based upon the total
number of sales. (The total sales reflect a combination of the Worker’s
4.2.3. Relational concerns and choices
We next tested whether participants’ relational concerns mediated
the impact of the ERRO condition on each of their two “bot” choices and
the Income Consumption Curve slope. We used the indirect boot­
strapping technique to test for mediation, using 5000 resamples. We find
a significant indirect effect of relational concerns on participants’ first
choice (B = 0.194, 95% CI = [0.082, 0.306]), second choice (B = 0.417,
95% CI = [0.236; 0.598]), and the slope (B = 0.140, 95% CI = [0.053,
0.227]. For the two choices, the ERRO direct effect remained significant
when we controlled for relational concerns (Choice 1: B = 0.476, 95%
CI = [0.243; 0.709]; Choice 2: B = 0.532, 95% CI = [0.180, 0.884]). For
the slope, relational concerns fully mediate the effect of ERRO (direct
effect B = 0.048, p = .477). These findings are consistent with Hy­
pothesis 3.
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
effort level (miles traveled) and the Luck Number; the Worker does not
directly profit from the total sales.) The Boss’ economic outcome is
determined by the amount they pay the worker, the Worker’s effort, and
luck. In the high ERRO condition, the Boss’ payment is determined mostly
by the Worker’s effort; in the low ERRO condition, the Boss’ payment is
determined mostly by luck. Specifically, in the high ERRO condition, the
Worker’s effort has 9 times the impact of Luck on the total sales, whereas
in the low ERRO condition, luck has 9 times the impact of the Worker’s
effort on total sales. We include the full instructions and details for
Studies 3a and 3b in Appendix D.
6.2.2. Negotiation strategy choices
In the first negotiation strategy decision (distributing 4 points),
participants allocated more points to relational concerns in the high
ERRO round (M = 1.88 out of 4, SD = 1.02) than they did in the low
ERRO round (M = 1.51, SD = 1.00; paired-t(178) = 4.48, p < .001;
Cohen’s d = 0.336). In their second strategic choice (distributing 7
points), participants again allocated more points to relational concerns
in the high ERRO round (M = 3.00 out of 7, SD = 1.65) than they did in
the low ERRO round (M = 2.44, SD = 1.46; paired-t(178) = 4.99, p <
.001, Cohen’s d = 0.359).
As in Study 2, we calculated the Income-Consumption Curve (ICC) as
a linear slope for each participant per round (i.e., slopes for the high- and
low ERRO rounds). Consistent with our findings in Study 2, the ICC slope
was steeper (reflecting an increasing preference for relational outcomes)
in the high ERRO round (M = 0.80, SD = 0.82) than in the low ERRO
round (M = 0.59, SD = 0.73; paired-t(178) = 3.32, p = .001; Cohen’s d
= 0.270). These slopes can be interpreted as follows: In the high ERRO
round, participants allocated about 4/5 of the additional budget to
relational outcomes (rather than deal term gains), whereas in the low
ERRO round participants allocated about 3/5 of the additional budget to
relational outcomes. We depict these data, supporting Hypothesis 2, in
Fig. 6.
6. Study 3a: Costly trade-offs
6.1. Method
6.1.1. Participants
We recruited 218 participants from a University Behavioral Lab pool.
Consistent with our preregistration (https://aspredicted.org/blind.php?
x=py9qq6), we analyzed the data of 179 participants who correctly
answered the attention check (131 female; Mage = 21.6, SD = 4.9).
Including all participants in the analyses did not affect the direction or
significance of our key findings, nor did participant gender.
Participants received Amazon gift cards that included a base
participation payment of $3.00 and a bonus payment that depended on
their decisions in the experiment (M = $2.99, SD = $0.88). Participants
spent an average of 14 min in the study (SD = 12). Our design included
two within-participant conditions (high vs. low ERRO), and we deter­
mined the sample size in advance to guarantee at least 80% power in
detecting within-participant effect sizes above 0.20.4
6.2.3. Relational concern and choices
We tested if participants’ relational concern mediate the impact of
ERRO on their choices. We again used the indirect bootstrapping tech­
nique to test for mediation, using 5000 resamples. We find an indirect
effect of relational concerns for participants’ first choice (B = 0.534,
95% CI = [0.428, 0.640]), second choice (B = 0.786, 95% CI = [0.610,
0.963]), as well as on the ICC slope (B = 0.259, 95% CI = [0.177,
0.340]), providing some support for Hypothesis 3. Notably, the ERRO
direct effect remained significant in all of these analyses, even when
controlling for relational concerns (all direct effect p’s < 0.006).
As in Study 2, deal term concern significantly affected both choices
(Choice 1: B = 0.241, z = 3.08, p = .002; Choice 2: B = 0.416, z = 3.59,
p < .001) and the slope (B = − 0.122, z = − 2.36, p = .018). Importantly,
our key results remain unchanged. That is, we still observe a significant
indirect effect of relational concerns for all DVs (p’s < 0.001).
6.1.2. Procedure
We informed participants that they would be the “Boss” in this
experiment and that they would be matched with another participant
who is the “Worker.” In actuality, we assigned all participants in this
study to the role of the Boss. Each Boss participant answered questions
for both the low ERRO condition (total sales are mostly determined
mostly by luck) and the high ERRO condition (total sales are mostly
determined by the Worker’s effort (miles)). In both the high ERRO and
low ERRO rounds, participants read the instructions and answered
comprehension questions. As in our prior studies, in each round, par­
ticipants rated the importance of relational concerns and favorable deal
terms (Appendix B).
Next, in each of the two ERRO conditions, participants made two
strategy decisions as in Study 2 (“Negotiation Bots”; Appendix C). The
first choice was always among 5 bots, and the second choice was among
8 bots. In total, participants made 4 decisions: We analyzed all of the
dependent variables within-participants. Finally, participants answered
demographic questions.
7. Study 3b: ERRO and workers’ post-negotiation behavior
In this study, we explore how negotiator behavior impacts post-
6.2. Results
6.2.1. Relational and deal term concerns
As in our prior studies, participants were more concerned about their
relationship with their worker-counterpart in the high ERRO condition
(M = 3.59, SD = 0.99) than they were in the low ERRO condition (M =
3.39, SD = 0.97; paired-t(178) = 2.76, p = .006, Cohen’s d = 0.204),
supporting Hypothesis 1. Participants were equally concerned about
reaching favorable deal terms across conditions (MhighERRO = 3.35, SD
= 0.78 vs. MlowERRO = 3.42, SD = 0.78; paired-t(178) = − 1.48, p = .141;
Cohen’s d = 0.090).
Fig. 6. Negotiation strategy choices: Trading off relationship and deal term
gains when negotiating in high ERRO versus low ERRO contexts (Study 3a, N =
179). Note. Participants allocated more points to improve relationships (at the
expense of favorable deal terms) in the high ERRO condition than in the low
ERRO condition. Dashed lines reflect the point budgets in each choice set.
Lighter dots represent ± S.E.M.
4
We wanted to have sufficient power to test exploratory hypotheses withinand between-participants, hence the larger sample size relative to Study 2.
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
negotiation effort and economic outcomes. We use the same context as
the one we used in Study 3a, and we expect the benefits to a Boss of
choosing a collaborative, rather than a competitive, strategy to be higher
in the high ERRO context (because high Worker effort matters a great
deal) than in a low ERRO context (because high Worker effort matters
relatively less). We test Hypothesis 4, that there is a stronger relation­
ship between relational outcomes and economic outcomes in the high
ERRO context compared to the low ERRO context.
7.2. Results
7.2.1. Workers’ post-negotiation effort
We regressed Workers’ effort on ERRO condition, Boss’ strategy, and
their interaction term, with the model variance clustered by participant
to account for multiple decisions. Across the two Boss’ strategy condi­
tions, Workers chose directionally, but not significantly, higher effort
levels (miles) in the high ERRO condition (M = 2.46, SD = 1.66) than
they did in the low ERRO condition (M = 2.25, SD = 1.58; B = 0.214, t
(222) = 1.28, p = .201). Notably, we find a significant interaction effect
(BERRO×Collaborative = 0.186, t(222) = 2.03, p = .044): In line with our
theorizing, the economic impact of the Boss’ negotiation strategy was
larger in the high ERRO condition (B = 1.714, t(110) = 13.13, p < .001)
than it was in the low ERRO condition (B = 1.342, t(112) = 10.35, p <
.001). Consistent with our theorizing, we also find this interaction effect
on Bosses’ expected earnings (BERRO×Collaborative = 5.311, t(222) = 5.03,
p < .001).
7.1. Method
7.1.1. Participants
We recruited 313 participants from a University Behavioral Lab pool,
and we analyzed the data of 226 who correctly completed the attention
check (160 female; Mage = 22.9, SD = 7.9). Including all participants in
the analyses did not affect the direction or significance of our key
findings, nor did participant gender affect any of our key findings.
As in Study 3a, participants received Amazon gift cards that included
a base participation payment of $3.00 and a bonus that depended on
their decisions in the experiment (M = $1.34, SD = $0.15). Participants
spent an average of 11 min in the study (SD = 19). We had two withinparticipant conditions, and we determined the sample size to be able to
detect effect sizes of approximately 0.30 between-participants with 80%
power.5 Participants who completed Study 3a could not participate in
this study.
7.2.1.1. Relational outcomes and economic outcomes. We first examined
Workers’ relationship satisfaction by regressing satisfaction on the
ERRO condition, Boss’ strategy, and their interaction term, with the
model variance clustered by participant. As expected, Workers had
higher relational outcomes with collaborative Bosses (M = 5.04, SD =
1.15) than competitive Bosses (M = 1.81, SD = 0.90; B = 3.231, t(222)
= 34.46, p < .001). Although we expected the ERRO × Boss’ strategy
interaction to be significant, neither the interaction term nor the main
effect of ERRO were significant predictors (both p’s > 0.41).
Hypothesis 4 predicts that ERRO will moderate the relationship be­
tween Workers’ relational outcomes and their effort choices. As we re­
ported above, ERRO did interact with the Boss’ strategy to affect effort.
Next, we tested whether relational outcomes mediated this relationship.
We thus regressed effort choices on relationship satisfaction, the Boss’
strategy, ERRO condition, and the ERRO × Boss’ strategy interaction
term, clustering the variance by participant. We used the indirect
bootstrapping technique to test for mediation of the ERRO × Boss’
strategy interaction by relationship satisfaction, using 5000 resamples
and find evidence for mediation on Workers’ effort (BRelationship = 0.448;
95% CI = [0.326, 0.569]; the interaction between ERRO and the Boss’
strategy was no longer significant - direct effect p = .090).6 We also note
that the effect of relational outcome remains similar when we included
all four SVI dimensions; in this analysis, we also see a significant effect of
the instrumental outcome (B = 0.238, t(218) = 3.23, p = .001).
Next, we conducted a similar mediation model on the Bosses’ ex­
pected earnings by the Boss’ strategy, ERRO condition, and the ERRO ×
Boss’ strategy interaction term with Workers’ relationship satisfaction as
the potential mediator, clustering the variance by participant. We find
both an indirect effect through relationship satisfaction (BRelationship =
2.337; 95% CI = [1.017, 3.658]) and a direct effect of the ERRO × Boss’
strategy interaction term (BERRO×Strategy = 5.172, 95% CI = [3.083,
7.262]). We depict this interaction effect in Fig. 7.
7.1.2. Procedure
Participants completed the study online, and we used a similar
procedure to the one we used in Study 3a. In this study, however, all
participants were “Workers.” We randomly assigned Workers to either
the high ERRO or the low ERRO condition. We had two withinparticipant conditions pertaining to the Boss’ strategy (for ease of
reference, Competitive or Collaborative).
We told participants that in each of two rounds they would be
matched with a “Boss” participant: a different Boss in each round. We
described the Boss’ behavior in the negotiation using the descriptions
below (similar to the descriptions of the two extreme negotiation bots
we used in Studies 2 and 3a):
Collaborative: “In this negotiation, the Boss sent very collaborative
messages. The Boss considered your perspective, asked questions, and
made concessions. The Boss was very focused on developing a good
relationship with you, not on just getting the best deal terms for
themselves.”
Competitive: “In this negotiation, the Boss sent very aggressive mes­
sages. The Boss often interrupted you, threatened to leave, and made
really low offers. The Boss was very focused on getting the best deal
terms for themselves, not on developing a good relationship with you.”
In both rounds, participants read that they negotiated with the Boss
and agreed to a salary of 300 points, and read the negotiation descrip­
tion (Competitive or Collaborative). Participants then chose their effort
level – the number of miles of travel (from 0 to 5). Next, they answered
items from the Subjective Value Inventory (Curhan et al., 2006); we
focus on the relationship satisfaction dimension (α = 0.985) and present
the full scales we used in Appendix B and the main instruction text in
Appendix D.
Finally, participants answered demographic questions. We prereg­
istered this study on AsPredicted (https://aspredicted.org/blind.php?
x=52pz4x).
7.3. Discussion
In Study 3, we manipulate ERRO and introduce a novel, incentive6
As we pre-registered, we also included a relationship conflict measure (Hart
& Schweitzer, 2020). This measure was highly correlated with the subjective
relationship satisfaction measure (R = − 0.872, p < .001). For brevity, we now
focus on the relationship satisfaction measure, and note that the result patterns
are similar for the conflict measure: Workers perceived higher conflict with the
competitive bosses than with the collaborative bosses (M = 4.00, SD = 0.66 vs
M = 2.27, SD = 0.72; B = 1.803, t(2 2 2) = 27.15, p < .001), and perceived
conflict mediated the interaction effect between ERRO and Boss’ strategy on
Workers’ effort (B = − 0.780; 95% CI = [− 0.954, − 0.606]; direct effect p >
.26).
5
This sample size allows us to detect effect sizes d > 0.20 within-participants
with 80% power; as in Study 3a, we wanted to have sufficient power to test our
exploratory between-participants hypotheses.
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
8. Study 4: Interactive boss-worker negotiation
In Study 4, we extend our investigation of ERRO in a dyadic nego­
tiation that includes a post-negotiation stage in which negotiators’ effort
can influence their counterparts’ economic outcomes. We manipulate
ERRO across dyads to explore how ERRO influences negotiator in­
tentions, negotiator behavior, relational outcomes, post-negotiation
behavior, and economic outcomes.
8.1. Method
8.1.1. Participants
We recruited 353 participants from a university Behavioral Lab
pool,7 and consistent with our preregistration https://aspredicted.
org/blind.php?x=nr5gi3, we analyzed the data of 279 participants
who correctly completed the attention check (222 female; Mage = 23.9,
SD = 8.0); including all participants in the analyses did not affect the
direction or significance of our key findings. Participant gender also did
not affect any of our key findings.
Participants received Amazon gift cards that included a base
participation payment of $4.00 and a bonus payment that depended on
participants’ decisions (M = $1.78, SD = $0.95). Participants spent an
average of 12 min in the study (SD = 7).
Fig. 7. Bosses’ expected economic outcomes (earnings) by Workers’ relation­
ship satisfaction in high and low ERRO conditions (Study 3b, N = 226). Note.
The economic outcomes Bosses would have earned are more positively related
with Workers’ relationship satisfaction (SVI relational aspect) in the high ERRO
condition than they are in the low ERRO condition. Lines represent linear
regression line; bands represent 95% CI.
compatible negotiation paradigm that includes a post-negotiation stage.
As in our prior studies, negotiators in Study 3a were more likely to
privilege relational concerns over deal term concerns when ERRO was
high than when ERRO was low.
In Study 3b, we examine the downstream impact of privileging
collaborative versus competitive negotiation tactics in high and low
ERRO contexts. As predicted, we find interaction effects between ERRO
and the Bosses’ negotiation strategy on both Workers’ relational out­
comes and their post-negotiation effort. Workers invested greater postnegotiation effort for Bosses who chose collaborative tactics than they
did for Bosses who chose competitive tactics. Greater effort benefited
Bosses in both high and low ERRO contexts, but it particularly benefited
Bosses in high ERRO contexts. These results provide support for Hy­
pothesis 4: In high ERRO contexts, relational outcomes are more
strongly linked with economic outcomes than they are in low ERRO
contexts.
In this study, we manipulated whether the context was high or low
ERRO for the Boss, and Bosses acted differently across the two ERRO
conditions. Bosses chose more collaborative tactics in the high ERRO
condition than they did in the low ERRO condition, and the more
collaborative Bosses were, the harder Workers worked. We did not,
however, find a main effect of ERRO on Workers’ relational outcomes or
effort. Workers’ relational outcomes and effort are downstream effects
of the Bosses’ ERRO condition, and we speculate that our experimental
paradigm may have limited the influence of Bosses’ strategic choices on
Workers’ perceptions and behavior. In contexts that allow greater
communication and richer opportunities to build rapport, we would
expect to observe stronger effects of ERRO on a negotiation counterpart.
Taken together, these findings link the use of competitive negotiation
strategies with relational outcomes, post-negotiation effort, and eco­
nomic outcomes. By incorporating ERRO into the negotiation frame­
work, we identify when attending to relational concerns is more
important (when ERRO is high) or less important (when ERRO is low).
Studies 3a and 3b show the impact of ERRO on negotiators’ concerns,
behavior, and post-negotiation outcomes in a novel, work-relevant
setting in which ERRO is manipulated in a within-participant design.
One potential limitation of these studies is that the designs may have
led participants to focus on the differences between these contexts more
then they might in a between-participant design. In Study 4, we address
this potential limitation in a between-participant design. We use a
dyadic, interactive negotiation paradigm in which participant-dyads are
assigned to one ERRO condition and negotiate via an online chat
platform.
8.1.2. Procedure
We randomly assigned participants to the “Boss” or the “Worker”
roles and paired them for a joint task. In the first stage of the study, the
Boss and the Worker negotiated a salary, a distributive issue for which
each could receive between 0 and 1000 points. Dyads negotiated in an
online, interactive chat platform. In the second stage of the study, the
Workers completed an effortful, “online item-moving” task that involved
repeatedly clicking on an item and dragging it across the screen.
Workers could move as many or as few items as they wished from 0 to
100 (Hart & Schweitzer, 2020). All participants completed a sample of
the task before the negotiation.
As in Study 3, we operationalized ERRO as the importance of the
Worker’s effort in determining the Boss’ post-negotiation outcome. In
addition to earning points from the salary negotiation (0–1000 points),
the Boss could earn points after the negotiation concluded: In the high
ERRO condition, the Boss’ post-negotiation outcome depended on how
many items the Worker completed (0–100 items, multiplied by 10
points); in the low ERRO condition, the Boss’ post-negotiation outcome
depended only on a random luck number (0–100, multiplied by 10
points). In both conditions, the Worker’s economic outcome depended
only on the negotiated salary.
After reading the instructions, participants rated the importance of
relational concerns and favorable deal terms using the same scales we
used in our prior studies (see Appendix B). Participants then indicated
how they intend to behave in the negotiation, from 0: “Completely
collaborative” to 10: “Completely assertive.” We include the exact in­
structions we used in Appendix E.
Next, Boss—Worker dyads interacted through a real-time comput­
erized chat platform (Molnar, 2019) for up to five minutes of uncon­
strained chat. To remind participants of the payoffs, we presented the
payment scheme above the chat window. After participants completed
the chat stage, they answered questions about their subjective value of
the negotiation (SVI; Curhan et al., 2006). Worker participants then
completed the item-moving task: They had up to 4 min to move as many
items as they wished and could quit the task at any time.
Following the experiment, we recruited three research assistants to
code the text of each negotiation. The research assistants, blind to
7
We preregistered our plan to collect responses from approximately 400
participants by posting the study for a single university-lab study session. We
determined this sample size based on our effect sizes in prior studies.
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
condition and hypotheses, coded each of the negotiations for focus on
the relationship, focus on the deal terms, and conflict in the negotiation.
They rated each dimension on a 5-point scale from 1: “Not at all” to 5:
“Extremely.” We averaged the three raters’ scores (inter-rater agreement
α values were 0.658, 0.856, and 0.883 for the three measures).
post-negotiation effort. On average, Workers completed 48.7 items (SD
= 43.4). We regressed the quantity of work Workers completed on their
relationship satisfaction with their Boss counterpart, the ERRO condi­
tion, and the interaction term. The better the relationship Bosses
developed with their Worker counterparts, the more work the Worker
completed (B = 26.834, t(131) = 8.97, p < .001). We note that the
coefficients for ERRO and the interaction were not significant (p’s >
0.22). However, the relationship effect on Workers’ effort was larger in
the high ERRO condition (B = 30.471, t(65) = 8.33, p < .001) than in the
low ERRO condition (B = 23.197, t(66) = 4.83, p < .001).
8.2. Results
Consistent with our preregistration, our main analyses focus on Boss
participants’ concerns, behavior, and post-negotiation outcomes. We
also report results for Workers’ effort and their subjective, relational
outcomes.
8.2.6. Bosses’ economic outcomes
We compared the relationship effect on Bosses’ economic outcomes
in the high ERRO and low ERRO conditions. We find a significant
interaction effect between ERRO and Workers’ relationship satisfaction
(B = 379.092, t(120) = 5.23, p < .001). In Fig. 8 we depict these results
for the high and low ERRO conditions, providing support for Hypothesis
4. To better understand this interaction, we next report separate analysis
for each ERRO condition. We also note that the Workers’ relationship
satisfaction also had a main effect, across conditions (B = 202.564, t
(124) = 5.59, p < .001).
In the high ERRO condition, Bosses’ outcomes depended on two
factors: the salary they agree to pay the Worker and the amount of work
the Worker completes. We regressed Bosses’ economic outcomes in the
high ERRO condition on their Worker counterparts’ relationship satis­
faction. Supporting our theory, we find that Bosses in the high ERRO
who developed better relationships with their Worker counterparts
earned better economic outcomes (B = 392.110, t(67) = 8.03, p < .001).
In the low ERRO condition, again consistent with our theory, we did
not find an effect of relationship satisfaction on Bosses’ economic out­
comes (B = 13.018, t(57) = 0.24, p = .809).
8.2.1. Relational and deal term concerns
As in our prior studies, Bosses rated their concern for their rela­
tionship with their counterpart higher in the high ERRO condition (M =
3.49, SD = 1.03) than they did in the low ERRO condition (M = 2.90, SD
= 0.98; t(142) = 3.52, p < .001, Cohen’s d = 0.587), supporting Hy­
pothesis 1. Bosses were similarly concerned about attaining a favorable
salary across conditions (MhighERRO = 3.77, SD = 0.88 vs. MlowERRO =
3.89, SD = 0.72; t(142) = − 0.90, p = .371; Cohen’s d = 0.149).
8.2.2. Negotiation strategy
Before negotiating, Bosses in the high ERRO condition intended to be
directionally more collaborative (versus assertive) (M = 5.40, SD =
2.06) than did Bosses in the low ERRO condition (M = 4.81, SD = 2.08; t
(142) = 1.71, p = .090; Cohen’s d = 0.285). Consistent with our pre­
registration, although the main effect was only marginally significant,
we conducted a mediation model: Bosses’ relational concerns mediate
the relationship between ERRO on Bosses’ negotiation intended strat­
egy. We conducted indirect bootstrapping with 5000 resamples (B =
0.963; 95% CI = [0.659, 1.266, 0.659]; direct effect B = 0.021, p =
.946). These finding are consistent with Hypotheses 2 and 3.
We next included Bosses’ deal term concern in the model predicting
negotiation strategy: The deal term concern had a significant effect on
the intended strategy (B = − 0.672, t(140) = 3.66, p < .001), but the
mediating effect of relational concern remained (p < .001).
8.3. Discussion
In this study, we used an interactive negotiation to explore how
ERRO influences ex-ante relational concerns, the negotiation process
itself, and negotiated outcomes including deal terms, relational out­
comes, and post-negotiation effort. We find that compared to Bosses in
the low ERRO condition, Bosses in the high ERRO condition cared more
about developing a positive relationship with their counterpart and
negotiated more collaboratively. We also find that Bosses in the high
ERRO condition who developed better relationships with their coun­
terparts earned better economic outcomes than did those who did not,
because their counterparts completed more work following the
8.2.3. Negotiation process
To gain further understanding of how collaborative Bosses were, we
conducted exploratory analyses of the content of the negotiations
themselves. We did not preregister the text coding or negotiation process
analyses that we conducted, but these exploratory analyses enable us to
gain insight into how Bosses acted across the ERRO conditions. As coded
by independent raters who were blind to condition, Bosses in the high
ERRO condition were significantly more relationship-focused (MHigh­
ERRO = 1.91, SD = 0.91 vs. MLowERRO = 1.49, SD = 0.69; t(130) = 2.98, p
= .003), less deal term (salary) focused (MHighERRO = 3.29, SD = 1.15 vs.
MLowERRO = 4.50, SD = 0.65; t(130) = − 7.75, p < .001), and less
conflictual (MHighERRO = 2.17, SD = 1.10 vs. MLowERRO = 2.65, SD =
1.07; t(130) = − 2.50, p = .014) than were Bosses in the low ERRO
condition.
8.2.4. Relational outcomes
Overall, Workers rated their relationship with their Boss counterpart
as similar (though directionally higher) in the high ERRO condition than
in the low ERRO condition (MhighERRO = 4.04, SD = 2.12 vs. MlowERRO =
3.57, SD = 1.82; t(133) = 1.38, p = .168; Cohen’s d = 0.238). We next
regressed Workers’ relational outcomes on ERRO and the Bosses’
intended strategy: More assertive strategies somewhat diminished
Workers’ relationship satisfaction (B = − 0.155, t(132) = − 1.95, p =
.053); the effect of ERRO was not significant (B = 0.460, t(132) = 1.36,
p = .175).
Fig. 8. Bosses’ economic outcomes by Workers’ relationship satisfaction in
high and low ERRO conditions (Study 4, Bosses N = 140). Note. The total
economic outcomes Bosses earned are positively associated with Workers’
relationship satisfaction (SVI relational aspect) in the high ERRO condition but
not in the low ERRO condition. Lines represent linear regression line; bands
represent 95% CI.
8.2.5. Post-negotiation effort
We next explored the links among ERRO, relational outcomes, and
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
their overall, final economic outcomes; in low objective ERRO contexts,
relational outcomes are only weakly related to economic outcomes.
Negotiators, however, may misperceive ERRO. In some cases, negotia­
tors may perceive the context to have greater ERRO than it does, and in
others far less than it does. We assert that perceptions of ERRO drive
important cognitions and behavior. Specifically, perceived ERRO is likely
to impact negotiators’ relational concerns and negotiation behavior
(Fig. 1), whereas objective ERRO accounts for when differences in rela­
tional outcomes impact economic outcomes (Fig. 2).
Our theorizing and findings also challenge the assumption that ne­
gotiators’ relational concerns and economic concerns are “dimensions
[which] are regarded as independent” (Carnevale & Pruitt, 1992, p.
539). We identify ERRO as a contextual factor that determines the
relative importance and relationship between negotiators’ deal term
concern and relational concern.
Second, by establishing the relationships among ERRO, negotiator
behavior, and economic outcomes, we qualify the substantial negotia­
tion literature that describes how negotiation strategies (e.g., expressing
anger, conceding slowly, or compromising) influence negotiated out­
comes. Prior work has made broad claims about the influence of nego­
tiation strategies on economic outcomes by failing to account for how
post-negotiation behavior and negotiation context are likely to moder­
ate these relationships. By considering post-negotiation behavior, we
explain how deal terms are not equivalent to economic outcomes. For
example, aggressive negotiation tactics may enable negotiators to secure
favorable deal terms. By accounting for ERRO, our findings reveal when
these tactics are likely to improve economic outcomes and when they
are likely to harm economic outcomes.
Our work challenges a common assumption in negotiation research,
that negotiators need to “forfeit joint economic outcomes […] in
deference to the pursuit of relational goals and/or the adherence to
relational norms” (Curhan et al., 2008, p. 193). Rather than reflecting a
compensatory relationship, we show that in high ERRO settings collabo­
rative tactics may help both relational and economic outcomes, whereas
assertive tactics may harm both relational and economic outcomes. Our
theorizing solves an important puzzle in the negotiation literature. We
explain why relational concerns are negatively related to economic
outcomes in some cases (Amanatullah et al., 2008; Beest et al., 2008;
Bowles et al., 2007), but positively related to economic outcomes in
others (e.g., Curhan et al., 2010; Kong et al., 2014; Morris et al., 2002).
We underscore the inherent and critical links among negotiation
context, negotiators’ relational outcomes, and their economic outcomes.
Third, related to our second contribution, our investigation un­
derscores the importance of accounting for post-negotiation behavior.
We advance our understanding of the link between behavior within a
negotiation (e.g., competitive or collaborative) and negotiator behavior
after the negotiation (e.g., implementing an agreement). In contrast to
prior theoretical and experimental negotiation research that has
implicitly and explicitly assumed that negotiated deal terms represent
the economic value of the negotiation (e.g., Amanatullah et al., 2008;
Gelfand et al., 2006; Malhotra & Bazerman, 2008; O’Connor & Arnold,
2001; for exceptions, see: Campagna et al., 2016; Friedman et al., 2020;
Hart & Schweitzer, 2020), we demonstrate when and how postnegotiation behavior can profoundly impact the economic value of the
negotiation process.
In addition to these theoretical contributions, our work informs
several substantial practical implications. Many services are character­
ized by high ERRO, and our findings are particularly relevant for the
service sector of the economy. More than two-thirds of the world’s Gross
Domestic Product involves services (Soubbotina, 2004), and in devel­
oped nations, such as the United States, the service sector accounts for
more than four-fifths of the economy. In contrast to the classic negoti­
ation paradigms that disproportionately reflect product-based negotia­
tion and have largely overlooked what happens after negotiators reach
an agreement, our paradigms and findings offer a foundation for future
work to expand our investigation of negotiation for services.
negotiation.
We did not find a main effect of ERRO on Workers’ relational out­
comes or their post-negotiation effort. However, we did observe the
expected interaction effect between ERRO and negotiation behavior
(specifically, conflict behavior) on Workers’ and Bosses’ outcomes. With
a richer negotiation context and a larger sample, we expect these re­
lationships among ERRO, negotiation behavior, and Workers’ postnegotiation effort to be even stronger.
9. General discussion
In this article, we introduce ERRO (the Economic Relevance of
Relational Outcomes) as a fundamental dimension which characterizes
negotiation contexts for each negotiator. In high ERRO contexts (e.g.,
hiring an employee), a substantial portion of the economic value of a
negotiation is delivered after an agreement has been reached, when
negotiators engage in post-agreement behavior that impacts their
counterparts’ economic outcome. For example, if a boss negotiates
aggressively with a new employee, the boss might obtain favorable
contract terms but harm the employee’s post-negotiation motivation
which, in turn, diminishes the boss’ economic value from the negotia­
tion. Notably, prior negotiation scholarship has overwhelmingly
assumed that the deal terms negotiators agree to represent the economic
value of a negotiation. A growing literature has considered relational
outcomes in addition to deal terms (Amanatullah et al., 2008; Curhan
et al., 2006; Gelfand et al., 2006; Gunia et al., 2011), but this work has
treated relational and economic outcomes as separate dimensions of
negotiators’ outcomes, and no prior work has explained when relational
outcomes might be more or less likely to impact a negotiator’s economic
outcomes. By introducing ERRO, we underscore the importance of postnegotiation behavior, even when the counterparts have no plans to
engage in a future negotiation. That is, ERRO characterizes a single
negotiation interaction. Importantly, by introducing ERRO, this article is
also the first to explain when relational outcomes are more or less likely
to impact economic outcomes: In high ERRO contexts, relational out­
comes are strongly linked with economic outcomes. In low ERRO con­
texts, relational outcomes are weakly linked with negotiators’ economic
outcomes.
Across four experiments (N = 1601), we document substantial dif­
ferences in negotiators’ strategic concerns and negotiation behavior in
high ERRO and low ERRO contexts. Across our studies, compared to
participants in low ERRO contexts, participants in high ERRO contexts
expressed greater concern for relational outcomes and chose more
collaborative negotiation strategies. In Studies 3 and 4, we show that
privileging relational concerns and developing rapport with a counter­
part in high ERRO contexts can increase a counterpart’s post-negotiation
effort and as a result yield better economic outcomes for the negotiator.
9.1. Implications and contributions
Our findings have broad theoretical implications. First, our work
identifies a novel and fundamental characteristic of negotiation con­
texts. In contrast to prior research that has overlooked differences in
negotiation contexts and used similar payoff matrices (e.g., a three-issue
integrative negotiation paradigm) interchangeably across negotiation
domains, we demonstrate that negotiation contexts can and should be
distinguished with respect to the dimension of the economic importance
of relational outcomes. We offer a novel conceptual distinction based on
ERRO. No prior work has done this, even though this distinction is
essential to understanding the relationships among negotiator concerns
(i.e., privileging relational over deal term concerns), negotiator
behavior (i.e., privileging collaborative versus competitive tactics), the
fundamental decision of whether or not to negotiate, and postnegotiation behavior.
We distinguish objective ERRO from perceived ERRO. In high
objective ERRO contexts, negotiators’ relational outcomes influence
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Organizational Behavior and Human Decision Processes 168 (2022) 104108
In service and employment negotiations, contracts are often incom­
plete. As a result, we might expect service contracts to require greater
clarification. Interestingly, in our studies, we found that rather than
focusing more attention on deal term concern, negotiators in high ERRO
contexts actually devoted less attention to deal term concern and instead
focused on building rapport. Future work should explore when rela­
tional outcomes can substitute for detailed contracts. This idea is related
to scholarship on contingent contracts that can help negotiators contend
with uncertainty (Murnighan & Malhotra, 2002; Williamson, 1996). In
most service and employment contexts, however, it is extremely difficult
to anticipate the full range of eventualities (Holmstrom & Milgrom,
1991). As a result, negotiators agree on contracts that have implicit or
unspecified terms (Rousseau, 1989; Simon, 1991). In these cases, parties
are well served when they develop trust. Paradoxically, prior work has
found that highly specified contracts can undermine trust (Malhotra &
Murnighan, 2002; Weber et al., 2004).
Our findings reveal that in high ERRO contexts, negotiators are well
served by developing rapport. We call for future work to extend our
findings to explore the relationships among collaborative negotiation
behavior, contracts, rapport, and post-negotiation behavior.
2004; Bowles et al., 2007; Hart & Schweitzer, 2020), and our Study 1
suggests that negotiators in high ERRO contexts are not only more likely
to collaborate with and accommodate their counterpart, but they may
also be more likely to avoid initiating a negotiation altogether. In high
ERRO contexts this may be rational. Surprisingly little prior work has
explored reasons to avoid negotiations (see Kang et al., 2020 for an
exception), and we call for future work to explore a negotiator’s decision
not to negotiate. We further assert that advice to “ask for it” and “lean
in” (Amanatullah & Tinsley, 2013; Bowles et al., 2007) should account
for ERRO in the negotiation context. Quite likely, advice that is wellsuited to obtaining more favorable deal terms and better economic
outcomes in some domains (e.g., low ERRO) may harm economic out­
comes in other domains (e.g., high ERRO). We call for future work to
explore the moderating role of ERRO in guiding prescriptive negotiation
advice.
Broadly, we assert that the standard experimental paradigm in
negotiation that concludes with a term sheet has limited our under­
standing of negotiation contexts and how relational outcomes impact
economic value. We urge future negotiation scholars to focus on nego­
tiation context, how individuals negotiate, and post-negotiation
behavior.
9.2. Limitations and future directions
10. Conclusion
Our investigation contrasted high and low ERRO contexts. Though
we studied ERRO as a dichotomy, we conceptualize ERRO as a contin­
uum. In general, we expect buyers’ negotiations for services to have
higher ERRO than their negotiations for products, but many situational
factors are likely to influence the extent to which a service or product
exchange has high ERRO. For example, a product that involves delivery
of the item and follow-up service (e.g., assembly) increases ERRO. We
call for future work to explore ERRO across different negotiation do­
mains and contexts.
In our studies, we found that negotiators readily perceived differ­
ences in ERRO across contexts, but future work should explore indi­
vidual differences in perceptions of ERRO. One difference that may
influence perceptions of ERRO is culture. For example, different cultures
have diverging views on the “fluidity” of negotiated agreements, the
extent to which negotiated agreements can be changed over time
(Friedman et al., 2020). Quite possibly, negotiators who perceive
agreements to be more fluid are also more likely to think of them as
higher ERRO. Future work could also investigate the relationship be­
tween ERRO and interdependent, relational construals. We suspect that
individuals who construe a relationship as highly interdependent will be
more likely to perceive their context as high ERRO. This relationship
may account for potential gender differences in perceptions of ERRO.
For example, across contexts, women negotiators may perceive higher
ERRO than men. It is also possible that cultural expectations and other
features of the negotiation process, such as alcohol consumption and
where negotiations transpire (Schweitzer & Gomberg, 2001; Schweitzer
& Kerr, 2000) could influence negotiators’ perception of ERRO. Taken
together, perceived ERRO may be determined by both structural and
psychological factors that cause negotiators to become more or less
likely to focus on relational concerns. We call for future scholarship to
explore how characteristics such as gender, culture, and relational selfconstrual impact subjective perceptions of ERRO. There could also be an
interplay between expertise and ERRO. For example, some expert ne­
gotiators, seeking to obtain more favorable deal terms, may convince
their counterparts that ERRO is more important than it is. We call for
future work to investigate negotiators’ perceptions and misperceptions
of ERRO across negotiation contexts.
We also call for future work to explore the relationships among
negotiator behavior, outcomes, and ERRO. This work should help us
understand when and which assertive and collaborative negotiation
strategies are most likely to improve economic outcomes. We also call
for future work to explore the decision to initiate a negotiation. Initi­
ating a negotiation can harm relational outcomes (Babcock & Laschever,
We introduce the Economic Relevance of Relational Outcomes (ERRO)
as a fundamental dimension of negotiation contexts, which reflects the
extent to which a negotiator’s relational outcomes can impact their
counterpart’s post-negotiation behavior in a way that ultimately impacts
the negotiator’s own final economic outcome. Supporting this concep­
tualization, we find that compared to negotiators in low ERRO contexts,
negotiators in high ERRO contexts are more likely to privilege relational
concerns over deal terms, and that relational outcomes exert more in­
fluence on economic outcomes in high ERRO than in low ERRO contexts.
Our theorizing and findings fill a critical gap in the negotiation
literature that has been overlooked by prior scholarship. We identify a
key feature of the negotiation context that determines how, when, and
why relational outcomes influence negotiators’ final economic out­
comes. What happens after negotiators reach an agreement can pro­
foundly influence economic outcomes, especially for negotiations
involving services. ERRO determines when negotiators should privilege
relational concerns over deal terms as they decide if and how to
negotiate.
CRediT authorship contribution statement
Einav Hart: Conceptualization, Data curation, Formal analysis,
Funding acquisition, Investigation, Methodology, Software, Validation,
Visualization, Writing – original draft, Writing – review & editing.
Maurice E. Schweitzer: Conceptualization, Funding acquisition,
Investigation, Methodology, Supervision, Writing – original draft,
Writing – review & editing.
Declaration of Competing Interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Acknowledgements
The authors wish to thank the Wharton Behavioral Lab and the NTRPeterson Research Grant (2018) for financial support. The authors also
thank Roderick Swaab and the anonymous reviewers for their guidance,
Alexander Hirsch and Sara Sermarini for help running experiments, and
Julia Bear, Nazli Bhatia, Brad Bitterly, Rachel Campagna, Peter Carne­
vale, Shereen Chaudhry, Matt Cronin, Jared Curhan, Deepak Malhotra,
14
E. Hart and M.E. Schweitzer
Organizational Behavior and Human Decision Processes 168 (2022) 104108
Alex Rees-Jones, and Eric VanEpps for helpful comments.
Studies 3b, 4: Subjective value Inventory
Appendix A. ERRO measure
The following items were adapted from Curhan et al. (2006), and
rated on a 7-point likert scale from 1: “Not at all” to 7: “Perfectly”. We
indicate the relevant subscale in brackets.
We measured the economic relevance of relational outcomes (ERRO)
as the difference between participants’ ratings of two questions (withinparticipant; rated from − 10: Much worse to +10: Much better).
Imagine that you want to [buy product / hire service provider].
[counterpart] is [selling product / providing service].
You are planning to negotiate the price with [counterpart]. Please
think about the interaction you will have with [counterpart].
Imagine that you negotiated with [counterpart], who is [selling
product / providing service].
You and [counterpart] agreed on a price.
By the end of the negotiation, your relationship with [counterpart] is
OK.
If instead, you had managed to develop a good relationship with
[counterpart], how would that good relationship influence the value of
the [product / service] you receive?
Now, imagine that by the end of the negotiation, your relationship
with [counterpart] is OK.
If instead, you had managed to develop a bad relationship with
[counterpart], how would that bad relationship influence the value of
the [product / service] you receive?
Items:
Products:
1. [Relationship] Did the exchange with [counterpart] build a good
foundation for a future relationship with them?
2. [Relationship] What kind of overall impression did [counterpart]
make on you? (rated from 1: “Extremely negative” to 7: “Extremely
positive”)
3. [Instrumental] How satisfied are you with the payment terms?
4. [Instrumental] Do you think the payment terms are consistent with
objective standards?
5. [Process] Did the Boss consider your wishes, opinions, or needs?
6. [Process] Would you characterize the process as fair?
7. [Self] Did this negotiation positively or negatively impact your selfimage or your impression of yourself?
Appendix C. Supplementary material
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.obhdp.2021.104108.
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• 3-seater couch
• electronic vacuum
• new smartphone
Services:
• someone to clean your apartment (one-time)
• someone to move your furniture to a new apartment
• someone to give you French lessons
Appendix B. Measures
Studies 1–4: Relational and Deal Term Concerns
In Study 1, participants indicated how important they thought the
following concerns were in their interaction with their counterpart
(buyer or provider). Importance of each item was rated on a 5-point
likert scale from 1: “Not at all” to 5: “Extremely”.
1.
2.
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5.
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I wanted [counterpart] to trust me
I wanted to get the best deal for myself
I wanted to agree on a deal that will benefit both me and
[counterpart]
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2. My relationship with [counterpart] is important to me
3. By the end of the negotiation, I want to make sure that [counterpart]
likes me
4. I want to get the best deal terms for myself
5. The deal terms are important to me
6. By the end of the negotiation, I want to make sure that I get a good
deal terms
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