ALTERNATIVE MODELS OF PRICE BEHAVIOR IN DYADIC NEGOTIATIONS - MARKET PRICES, RESERVATION PRICES, AND NEGOTIATOR ASPIRATIONS

Three competing predictors of price are manipulated in a two-party dis tributive negotiation. These include prevailing market prices, negotia tor reservation prices, and negotiator aspirations. We offer a cogniti ve interpretation of how each type of information is incorporated into the negotiator's thought processes as an alternative cognitive refere nce point. In two studies varying the levels of these three factors, o nly reservation prices, not prevailing market prices or negotiator asp irations, account for significant variance in negotiated outcomes. Dis cussion is offered, suggesting that the negotiator as decision maker m ay experience a ''dominant reference point'' effect. When multiple pie ces of relevant information are available, the negotiator may only be able to focus on one of them. Among the three predictors studied, the reservation price may be cognitively interpreted as the most absolute limit. (C) 1994 Academic Press, Inc.