Wong, Ricky Siu Kuen
(2007)
Knowledge and power asymmetries in dyadic negotiations: Whose knowledge matters?
PhD thesis, London School of Economics and Political Science.
Abstract
Previous research has revealed that negotiators with asymmetric best alternatives to the negotiated agreement (BATNAs) reach more efficient agreements than those with equal BATNAs. Conflicting hypotheses have been proposed to explain the relationship between BATNA-asymmetry and efficiency, and research exploring various possibilities has been relatively inconclusive. This thesis sets out to contribute to this domain, arguing that it is important to consider parties' knowledge states of BATNA-asymmetries. In addition, relationships among knowledge, aspiration and distributive outcomes are explored. A simulated job contract negotiation between an employer and employee was used. The data used in the investigation is the product of three experiments in which 112, 114, and 96 dyads participated respectively. Study 1 examines whether knowledge given to different negotiators affects agreement efficiency, aspiration levels and the nature of distributive outcomes. Study 2 investigates how this knowledge affects efficiency by exploring the relationship between knowledge and communications between parties. Finally, Study 3 focuses on why knowledge affects efficiency, examining its impact on negotiators' motivation, approach and mind-set. With the 5% significance level adopted, the key findings are that (a) aspiration levels of strong (weak) negotiators increase (decrease) with levels of knowledge; (b) knowledge increases the piece of resource pie that strong negotiators receive; (c) strong negotiators' knowledge of BATNA-asymmetries increases focus on dominance and judgement errors about opponents' interests, hindering information-exchange and the search for efficient outcomes; (d) weak negotiators' knowledge increases motivation and fosters communications, leading to more efficient agreements; and (e) the detrimental impact of strong negotiators' knowledge on efficiency is more powerful than the benefit of weak negotiators' knowledge. The findings suggest that knowledge of BAT'NA-asymmetries shapes negotiators' behaviour, and ultimately the structure and quality of outcomes. More importantly, the impact of knowledge on efficiency differs, relying on which party (strong and/or weak) has access to it.
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