NONLINEAR PREFERENCE FUNCTIONS AND NEGOTIATED OUTCOMES

The study described in this paper explored the effects of nonlinear pr eferences on negotiated settlements. The shape of negotiators' prefere nces (linear, increasing marginal utility, or decreasing marginal util ity) was hypothesized to influence negotiated outcomes. Prior relation ship between the negotiators (friends versus strangers) was hypothesiz ed to moderate the effects of negotiators' preferences on negotiated o utcomes by virtue of the influence of prior relationship on communicat ion effectiveness within the negotiation dyad, Subjects participated i n a buyer/seller negotiation role play. Results demonstrated a strong main effect for negotiators' preferences on negotiated outcomes. Resul ts also supported a moderating role for prior relationship on these ef fects; this moderating role was not accounted for by communication eff ectiveness. Implications of these results for negotiation theory and p ractice are discussed. (C) 1998 Academic Press.