The negotiation matching process: Relationships and partner selection

We present 3 studies that examine the process of partner selection in negot iations and the influence that relationships may have on the partner-select ion decision. In Study 1, me present a simulated matching market experiment in which we compare the matching process when relationships can influence the partner-selection decision with the matching process when relationships cannot influence this decision. We find that when relationships are not al lowed to influence the matching process, there are more economically optima l agreements, a larger market surplus, and more search activity. In Study 2 , a simulation of a naturally occurring market selection process provides a dditional quantitative support for the findings from Study 1 and offers qua litative data on the reasoning process behind partner selection, including the social factors that are influential in this decision. Study 3 utilizes a repeated trial experimental simulation to offer further support for the n egative relationship between relationships and economic outcomes and to sug gest that the relative power of the negotiators influences the extent to wh ich relationships help versus hurt individual profitability. Implications o f these findings are discussed. (C) 1999 Academic Press.