Social and Behavioral Sciences Commons^™

Bargaining Zone Distortion In Negotiations: The Elusive Power Of Multiple Alternatives, Michael Schaerer, David D. Loschelder, Roderick I. Swaab

Research Collection Lee Kong Chian School Of Business

We challenge the assumption that having multiple alternatives is always better than a single alternative by showing that negotiators who have additional alternatives ironically exhibit downward-biased perceptions of their own and their opponent’s reservation price, make lower demands, and achieve worse outcomes in distributive negotiations. Five studies demonstrate that the apparent benefits of multiple alternatives are elusive because multiple alternatives led to less ambitious first offers (Studies 1–2) and less profitable agreements (Study 3). This distributive disadvantage emerged because negotiators’ perception of the bargaining zone was more distorted when they had additional (less attractive) alternatives than when they only had …