Mind the First Step: The Intrapersonal Effects of Affect on the Decision to Initiate Negotiations under Bargaining Power Asymmetry

Kapoutsis, Ilias; Volkema, Roger; Lampaki, Antonia

doi:10.3389/fpsyg.2017.01313

ORIGINAL RESEARCH article

Front. Psychol., 02 August 2017

Sec. Organizational Psychology

Volume 8 - 2017 | https://doi.org/10.3389/fpsyg.2017.01313

Mind the First Step: The Intrapersonal Effects of Affect on the Decision to Initiate Negotiations under Bargaining Power Asymmetry

$\r\nIlias Kapoutsis*$ Ilias Kapoutsis^1*

Roger Volkema²

Antonia Lampaki¹

¹Department of Business Administration, School of Business, Athens University of Economics and Business, Athens, Greece
²Department of Management, Kogod School of Business, American University, Washington, DC, United States

We undertook two vignette studies to examine the role of affect (trait and state) and bargaining power on initiating negotiations, an often overlooked stage of the negotiation process. Using a job negotiation opportunity, we examine three distinct phases of the initiation process—engaging a counterpart, making a request, and optimizing a request. Study 1 examines the effects of two affect dispositions (happiness and sadness), under power asymmetry (low vs. high bargaining power), on the three initiation behaviors. We found that power is pivotal to the decision to engage, request, and optimize. Also, sadness reduces the likelihood of initiation when power is high but is immaterial when power is low. In contrast, individuals who tend to be happy can reverse the adverse effect of powerlessness on requesting, but not on engaging and optimizing. However, happiness does not carry over a positive effect on negotiation initiation, over and above that of power. Study 2 investigated the role of trait affect when individuals are in power asymmetry and when they are induced with sadness or happiness. We found that those with a happy disposition initiate more (engage, request, and optimize) when power is high and experience incidental sadness. Overall, these findings qualify previous research on negotiation initiation and highlight the importance of trait affect and its interaction with state affect as additional driving forces and of power as a boundary condition.

“for the error occurs at the beginning, and the beginning as the proverb says is half of the whole, so that even a small mistake at the beginning stands in the same ratio to mistakes at the other stages.”

(trans. Aristotle, 1944, 1303b)

Introduction

Negotiation is a conflict resolution mechanism in which at least two parties decide to act to reduce perceived goal discrepancies. However, most negotiation research considers the decision to enter the negotiation as implicit and emphasizes on what happens during the negotiation and on its outcomes (Reif and Brodbeck, 2014). This perspective takes no account that a pre-negotiation phase exists in which one or more parties consider whether the situation is ripe to initiate a negotiation and communicate their preferences to their counterpart(s) (Zartman, 1989). But, why do some individuals take the first step and effectively initiate negotiations to achieve their goals, while others decide to avoid an encounter, or choose not to verbalize their request, or prefer to sub-optimize their request? As a great many decisions have an interpersonal component that requires the cooperation of other persons to accomplish, the answer to this question has direct and important implications for personal and professional success.

Despite the fact that researchers and scholars have long recognized the critical role played by early stages in many social processes (e.g., planning, problem-solving, group/team development; Tuckman, 1965; Bruner and Pomazal, 1988), the initiation phase of negotiation was for many years overlooked in models of the negotiation process, not to mention in research studies (Reif and Brodbeck, 2014, 2017). Eventually, interest in the role of gender in negotiations led some researchers to postulate differences in men’s and women’s attitudes toward negotiation, particularly as relates to making a demand or request (Babcock and Laschever, 2003; Baron, 2003; Amanatullah and Morris, 2010). Other demographic/personality factors, such as risk propensity and Machiavellianism, have since been linked to differences in propensity to initiate a negotiation (Kapoutsis et al., 2013).

In a review of research on negotiation, however, Bazerman et al. (2000) concluded that although “individual differences do influence negotiated outcomes, slight changes in situational features swamp these effects” (p. 281). Among the situational factors that could influence the initiation process are an individual’s affective state (Elfenbein, 2007; Van Kleef and Sinaceur, 2013; Reif and Brodbeck, 2014; Lerner et al., 2015; George and Dane, 2016) and the relative bargaining power of the initiator (Overbeck and Kim, 2013). These factors can differentially influence an individual’s decision to engage a counterpart, whether or not to make a request, and the nature of the request (e.g., goal optimization or sub-optimization, in the hopes of improving the chances of gaining a counterpart’s cooperation; Volkema, 2009; Kapoutsis et al., 2013). These three phases of the initiation process—engaging, requesting, and optimizing—must be studied individually as well as collectively to best understand the predictors of initiation behavior.

This research draws from the Appraisal Tendency Framework (ATF; Lerner and Keltner, 2000, 2001), which posits that emotions influence the way individuals appraise their environment toward the accomplishment of specific goals (Smith and Ellsworth, 1985; Lerner et al., 2015). Specifically, we are interested in the intrapersonal effects (i.e., when one is affected by experiencing his or her own emotions) of two discrete emotions (i.e., happiness and sadness) on the decision to initiate negotiations under bargaining power asymmetry. Our first objective is to investigate the impact of these two affect dispositions, which reflect emotions with different appraisal tendencies (happiness: a highly pleasant state involving little effort, a high level of certainty about the situation, a strong desire to pay attention, and a moderately high sense of personal control; sadness: a highly unpleasant state which is controlled by situational circumstances which are beyond individual control and associated with a high degree of anticipated effort), on negotiation initiation when bargaining power is low and high. The second is to examine the trait × state affect interaction under bargaining power asymmetry and see how their interplay (we call this the “dual-emotion situation”) may influence the decision to engage a counterpart, request and optimize.

To meet these objectives, we designed two scenario studies. Using a salary negotiation as context, Study 1 examines the impact of trait affect (happiness and sadness) and bargaining power on individuals’ decision to initiate a negotiation. Study 2 uses a similar methodology to test the interaction between state and trait affect (happiness vs. sadness) at high and low levels of relative bargaining power on each stage of the initiation process.

This research aims to advance our knowledge on negotiations in three meaningful ways. First, we offer another explanatory mechanism of why individuals decide to engage negotiations and make optimal or suboptimal requests. Although we know from prior studies that bargaining power is pivotal to negotiation initiation and needs to be accounted for (Magee et al., 2007; Kapoutsis et al., 2013; Volkema et al., 2013, 2016), there is amassing empirical evidence that demonstrates that emotions spill over their effects to decision making influencing action tendencies (for a recent review, see Lerner et al., 2015). Thus, the knowledge of how emotions impact negotiators’ decision to initiate will enhance our understanding of negotiators’ intentions in high vs. low bargaining power situations and hence indicate new practical ways to intervene or bias the decision making of counterparts.

Second, we contribute to the literature of emotions in the context of negotiations. Prior research on negotiations has focused on the interpersonal effects of emotions (e.g., Van Kleef, 2009; Van Kleef et al., 2010). Such attention is justified since emotions that counterparts display may carry social information that communicates important messages to another party and thus alternating their negotiation behavior (Van Kleef, 2016). However, emotions may as well implicitly influence cognition and hence the decisions to seize a negotiable opportunity or let it pass. With this research, we hope to provide insight into the role of two dispositional emotions (happiness and sadness) in the pre-negotiation stage.

Finally, this is one of the few studies (e.g., Winterich et al., 2010; Pe and Kuppens, 2012) to test patterns of augmentation and blunting between two quite diverse emotions, happiness and sadness, and the only one, to our knowledge, to investigate the interactive effects of the same trait and state emotions on negotiations. Literature suggests that there is a positive relationship between dispositional and state emotions (Lerner and Keltner, 2000). However, although predisposed to certain emotions, at the time of the negotiation individuals may experience congruent or incongruent incidental or integral emotions (dual emotion situation). Such a hypothesis makes a unique contribution to the negotiation literature since it shows what happens to initiation behavior, under bargaining power asymmetry, when dispositional happiness (sadness) is congruent or incongruent with state happiness (sadness). This investigation intends to open up the discussion about the dynamic interplay between state and trait affect on judgment and decision making.

Negotiation Initiation Under Bargaining Power Asymmetry

According to the Approach-Inhibition Theory of Power, an individual’s behavioral approach system is activated when the individual has a relative power advantage, leading to a greater awareness of potential rewards and goal-directed motor behavior (Keltner et al., 2003). Besides, individuals with power may exhibit lower sensitivity to social norms and standards (Galinsky et al., 2003). Thus, people who have more relative power may well believe that their goals supersede conventional social norms and that alternatives exist if a prospective counterpart responds otherwise. An increase in goal-directed motor behavior along with a concomitant decrease in one’s sensitivity to social strictures, therefore, suggests a willingness to engage other parties who might aid in goal achievement.

While engaging can occur without requesting (as when a negotiator introduces him/herself into the conversation in the hopes that the context will spur the other party to raise a desired issue or wait until the timing is more appropriate), there is also support for a relationship between power and the second phase of the initiation process—requesting. When individuals have perceived power, they are likely to express their opinions more in social situations (Aries et al., 1983; Anderson and Berdahl, 2002). In contrast, individuals who lack power may prefer reticence with respect to goal pursuit, for fear that a request not only might be negatively received but prompt punitive action (De Dreu et al., 1998).

The third phase of initiation—optimization—also can be affected by relative power. The perception of a power advantage can imply that one’s counterpart has few if any alternatives to a negotiated agreement (e.g., no other suppliers), and therefore it is possible to optimize one’s request. This optimization, for example, can take the form of an exaggerated if not hyper-exaggerated first offer. In contrast, an initiator who him/herself lacks viable alternatives may be more inclined to lower his or her expectations and demands (Pinkley et al., 1994). In addition, prior research has shown that possessing more power increase individuals’ propensity to make a first offer and improve negotiators’ outcomes (Galinsky and Mussweiler, 2001; Magee et al., 2007).

The Role of Emotions In Shaping Decisions: An Appraisal-Tendency Framework Perspective

Affect is a catch-all term that captures a broad range of ephemeral or enduring preferences, evaluations, moods, or emotions (Fiske and Taylor, 1991). Dispositional or trait affect refers to more stable tendencies to experience certain moods more frequently or to display specific emotional reactions to some stimulus (Scherer, 2005). In contrast, state affect reflects transitory emotional states caused by specific events that may be relevant or irrelevant to the negotiation (Barry et al., 2004; Lerner et al., 2015). While state and dispositional affect originate from different sources (situations vs. biological processes or genetic influences), research has shown that they may produce similar effects to a wide range of intrapersonal (e.g., decision making), interpersonal (e.g., performance appraisals), and organizational (e.g., cooperation, prosocial behavior) processes (Baron, 2008; Druckman and Olekalns, 2008).

Prior literature suggests that integral and incidental emotions can influence judgment and decision making (Lerner and Keltner, 2000). The former focus on the impact of emotions that are relevant to the particular situation. For example, the anticipated happiness after receiving a large bonus for the contribution to the company’s annual profits while preparing to meet with a client. The latter, which is the concern of this paper, document the influences of subjective emotional experiences that are irrelevant to the situation. For example, the anticipated sadness after seeing a fatal car accident while driving the car to an interview with an employer. Although integral emotions have shown that they can bias otherwise prudent course of action (Loewenstein et al., 2001), research on incidental emotions indicate that they can also spill over from one situation to the next (e.g., Loewenstein and Lerner, 2001; Lerner et al., 2015).

In the negotiation literature, most studies are concerned with integral affect since they have shown to convey more strategic information and thus have a stronger influence on the recipients’ judgments and behavior (Van Kleef, 2016; Hillebrandt and Barclay, 2017). Recent studies have shown that incidental emotions have stronger intrapersonal carry over than integral emotions (Schwarz and Clore, 1983; Lerner et al., 2015; Van Kleef, 2016). Nonetheless, not all emotions have a similar impact on decision making and specifically on the decision to initiate negotiations.

Research has proposed several models of emotional appraisals such as Russell’s (1980) circumplex, Frijda et al. (1989) action readiness, and Lazarus’s (1991) goal-relevance and goal congruence framework. However, the ATF (Lerner and Keltner, 2000, 2001) has moved research one step forward by suggesting that each emotion relates to a unique core appraisal that activates a cognitive predisposition (i.e., appraisal tendency). This tendency, in turn, drives individuals to appraise particular events in ways that are consistent with the emotional appraisal (Han et al., 2007). Hence, even emotions of the same valence (e.g., sadness and anger) or activation (e.g., happiness and anger) may have different influences on judgment and decision making.

To form this appraisal tendency, the ATF relies on the empirical work of Smith and Ellsworth (1985) and distinguishes emotions based on six different characteristics (Lerner et al., 2015): attentional activity, certainty about what happened, pleasantness, control, anticipated effort, and accountability. Happiness is a positive emotion associated with an elevated sense of certainty, individual control, and accountability. Moreover, those who are happy may display more attentional activity to a task, and their activation seems easier as they require less effort to overcome obstacles attached to a challenge. In contrast, sadness is a negative emotion characterized mostly by the absence of personal control, which enhances the tendency to perceive the situational elements of the prospective negotiation as responsible for its outcome (Winterich et al., 2010; Lerner et al., 2015). Also, sadness may be experienced as a burden, so individuals need to exert more effort to achieve their goal. Furthermore, sadness is associated with low attentional control which suggests that people facing a negotiation will be less concentrated to the task or repelled by it. Therefore, happiness and sadness are two discrete emotions with different underlying characteristics that each may affect differently the decision to initiate negotiations.

Dispositional Happiness and Sadness on Negotiation Initiation under Power Asymmetry

Entering a negotiation is a decision that requires deliberation. In their review, Lerner and her colleagues (2015) suggest that emotions shape decisions through the content and depth of thought. As regards the former, the decision to initiate negotiation is typically associated with the risk of endangering valuable resources. For example, making requests to an employer may increase the perceived risk of being rejected. Indeed, how negotiators perceive risk in a given negotiation may be critical to the way they act. Prior studies have shown that action tendencies relate to risk perceptions (Lerner and Keltner, 2001; Keller et al., 2012). As for the depth of thought, the literature suggests that negative appraisals, such as sadness, may signal threat and lead to a more systematic processing as opposed to positive emotions which may signal safety and more heuristic processing (Lerner et al., 2015). However, Tiedens and Linton (2001) argued that the certainty dimension of appraisal tendencies associated with happiness rather than sadness increase heuristic processing and hence decrease attention to argument quality.

In this respect, happiness is associated with certainty and personal control which relate to risk-taking tendencies (Lerner and Keltner, 2001). Thus, we expect that under a bargaining power advantage, happy individuals will display an increased likelihood, over and above the one triggered by the positive power imbalance, of not only engaging a counterpart but also making and maximizing their requests. But, even under a relative power disadvantage, happy individuals may initiate more often as they may bias their judgment and perceive the situation as being under their control and take the risk to act to turn things around. Such behavioral intention of happy individuals may relate to the heuristic processing associated with this disposition (Tiedens and Linton, 2001). However, we doubt that their risk taking will be so intense to increase the likelihood of optimization.

Antithetically, sadness is unpleasant, it is associated with lack of personal control over the situation (such as when facing a negotiable opportunity) and requires greater effort to surmount obstacles to achieve goals. Hence, sad rather than happy individuals may become pessimistic about the situation, driving them to assess the probability of success as low (Smith and Lazarus, 1993). Therefore, we expect that this pessimistic approach will prevent them from activating and taking risks especially when relative power is low. In this case, the likelihood of engaging, requesting, and optimizing would further decrease. Also, even when power asymmetry is positive, their dispositional sadness may attenuate power’s positive impact on negotiation initiation intentions. Nonetheless, we expect that this buffering effect will be most apparent in optimizing and requesting and not in engaging. The reason for this differentiation is that engaging under a relative power advantage seems a risk-free choice even for sad individuals.

The Dual-Emotion Situation and its Impact on Negotiation Initiation Under Bargaining Power Asymmetry

The previous discussion made clear that trait affect may influence the decision to initiate negotiations. Surprisingly, prior research on decision making has focused on the action tendencies of either dispositional affect or state affect (as general tendencies or discrete emotions). Yet, trait and state affect may interact within the same individual. For example, a job candidate may have a happy disposition, but be in a sad mood during an interview because of a previous integral or incidental event. This interplay of trait and state affect raises new questions about the implications of their interaction in decision making and negotiation initiation, in particular.

The tenet that emotional experiences may influence each other across time is not new, although empirical evidence are still sparse (e.g., Branscombe, 1985; Neumann et al., 2001; Winterich et al., 2010; Pe and Kuppens, 2012). For example, Branscombe (1985) relied on the incompatible response model (Baron, 1976, 1984) and argued that when one emotion immediately follows another of the same valence, these will sum and result in a more intense response to the second stimulus. In another study, Winterich et al. (2010) argued that since appraisal tendencies influence judgment and cognition, they may as well influence an existing appraisal. In their study, they focused on contrasting appraisals that inhibit previous emotions, which they referred to as emotional blunting. Specifically, they used sadness and anger, two emotions negatively valenced that mainly differ in situational control (i.e., sadness is characterized by appraisals of situational control whereas anger by appraisals of individual control) and found that sadness will blunt the elicitation of sadness in a subsequent event that should elicit anger and in turn carry over to optimism in risk estimates. In addition, Pe and Kuppens (2012) suggested that one emotion can either augment or blunt the experience of another subsequent emotion. In their study, they found that emotions of similar valence augmented the experience of another whereas they blunted it in the case of emotions of the opposite valence.

Based on the previous discussion, we expect that when state happiness (sadness) is congruent with dispositional happiness (sadness), the effect of the latter will be amplified. Thus, being in a happy (sad) state, while having a happy (sad) disposition, will increase (decrease) the likelihood of initiating, especially when bargaining power is also high (low). In contrast, we expect that when state happiness (sadness) is infused to a sad (happy) individual, the negative (positive) effect of dispositional sadness (happiness) on negotiation initiation will attenuate, even when bargaining power is low (high).

The Present Research

To test these propositions, we designed two scenario studies. The first tests the impact of dispositional affect (happiness and sadness) on three distinct stages of negotiation initiation (engage, request, optimize). In the second study, we manipulate state affect (happiness vs. sadness) and test its interplay with dispositional affect (happiness and sadness) on each stage of the negotiation initiation process. In both studies, bargaining power is manipulated to test these effects under power asymmetry (high vs. low relative bargaining power). To our knowledge, this research is the first to investigate the role of affect on negotiation initiation and one of the few that empirically tests the interaction between trait and state affect (e.g., Van Knippenberg et al., 2010). Finally, the current research is unique since the role of affect is tested in light of power asymmetries.

Ethics Statement

An ethics approval was not needed for this type of study according to institutional and national guidelines. In our cover letter to participants, we explicitly stated that participation was voluntary and that anonymity was ensured as no identifying, personal, or health related information were collected. Furthermore, all participants were informed that they had the option to withdraw from the survey at any moment while at the beginning of the survey they indicated their consent by checking a relevant checkbox.

Study 1

Participants and Procedure

The participants were 108 full-time employees. Fifty-two percent were females, with a mean age of 34.98 years (SD_age = 12.2) and 2.37 years of work experience (SD_tenure = 2.06). They were recruited through Prolific Academic, an online labor marketplace in which employers can recruit workers to complete short tasks for a small fee. Recent studies have shown that such crowdsourcing online marketplaces (e.g., Amazon’s MTurk, Prolific Academic, Crowdflower) for recruitment of subjects in research are a reliable and cost-efficient method of getting high-quality data associated with significant benefits (Rand et al., 2012). The most prominent benefits are that the demographic characteristics of their workers are more representative of non-college populations and that such platforms allow other researchers to replicate findings (Buhrmester et al., 2011; Rand et al., 2012). Based on recent evidence (Peer et al., 2017), the Prolific Academic platform managed to reproduce known effects of all the tested tasks, its workers exhibited lower propensity to engage in dishonest behaviors, while the data reliability (i.e., passing attention checks) was high.

For this study, we chose few pre-screening requirements. Participants’ pool consisted of English speaking Caucasians, who worked full-time. To be eligible to participate, they also had to display at least 80% approval rate in prior tasks (an indication of the quality of their responses) and had at least two successful submissions. The total number of eligible participants at the time of the data collection was 11,420. To compensate for their time, we offered a baseline payment of £1 (£10/hour), which was well above the lower (£5/hour) or the suggested £6.5/7.5 hourly rate. The average time needed to complete the survey was 6 min.

To ensure that all participants would display a satisfactory level of attention and hence reduce noise in the data, we included two attention and four recall checks scattered into different sections of the online survey. For example, after reading the scenario participants had to respond to four questions to verify that they recall the information presented in the scenario (e.g., “Is this job your top choice?,” “Do you expect any other offer from other companies?”) or, after providing the demographic information, they had to choose the value that equals 3 × 2. Participants who failed to pass one attention or recall check (i.e., 30.3%) were excluded from the study after being debriefed of the reason. The probability of passing all attentions checks by providing automated answers was practically 0 (i.e., below 0.1%).

In the first part of the survey, participants were asked to complete the measures of happiness and sadness with other measures and demographic characteristics to avoid signaling the actual purpose of the study and reduce attribution bias. Then, we randomly presented a vignette describing either a low (N = 54) or high (N = 54) bargaining power situation and instructed them to take some time to think of the situation and let themselves react as if this was actually happening to them. After reading the scenario and passing the necessary attention and recall checks, respondents ranked four alternatives that reflected different stages of negotiation initiation (avoid engaging, engaging, requesting, optimizing).

Assessing dispositional affect

Dispositional affect encompasses many different positive and negative emotions. In this study, we focused on two primary and relevant to negotiations emotions, happiness and sadness. To measure perceived happiness and perceived sadness, we used the joviality (eight items) and sadness (five items) dimensions from the Positive Affect Negative Affect Scale (PANAS; Watson et al., 1988). On a 5-point scale, ranging from “very slightly or not at all” (1) to “extremely” (5), participants assessed how they felt during the past few weeks by responding to the words “happy,” “joyful,” “delighted,” “cheerful,” “excited,” “enthusiastic,” “lively,” and “energetic,” which assess happiness (joviality dimension of PANAS), and to the words “sad,” “blue,” “downhearted,” “alone,” and “lonely,” which measure sadness. Reliability estimates for both measures were adequate (happiness: α = 0.93; sadness: α = 0.91).

Manipulation of bargaining power

Participants were asked to read a scenario describing a salary negotiation (see Appendix). To manipulate bargaining power, we altered the scenario in the following aspects: the desire for the position, the existence of alternative offers, and the existence of other competent candidates. For the low power condition, the scenario mentioned that the offered job was one of their top choices, while no other offer was on the table, and other competent candidates were competing for the position. In contrast, the high bargaining power condition mentioned that the job was respectable but not among their first choices, they had other offers pending, and they were the most competent candidates for the position.

Assessing negotiation initiation

We instructed participants to put themselves in the described position and react as if this was actually happening to them. Then we prompted them to choose their most preferred response among four behavioral alternatives (presented in randomized order) that described different levels of initiation behavior (see Appendix): (a) no engagement of a counterpart, (b) engagement without making a request, (c) engagement with a suboptimal request, and (d) engagement with an optimized request. Then, based solely on their preferred alternative, each participant was scored for engaging (0 or 1), requesting (0 or 1), and optimizing (0 or 1). This way, individuals who chose to optimize as their preferred response, received “1” for engaging, “1” for requesting, and “1” for optimizing, while those who preferred to engage received “1” for engaging and “0” for the other two initiation behaviors.

Controls

Prior studies suggest that males are less likely to initiate a negotiation (e.g., Babcock et al., 2006). Also, older participants have been negatively associated with the propensity to initiate negotiations (Volkema and Fleck, 2012). Therefore, we included gender and age as covariates in our study.

Treatment of the Data

To test the impact of dispositional affect and bargaining power on the three binary dependent variables we employed hierarchical logistic regression. Controls and main effects were entered in Step 1 and the interaction terms were included in Step 2. All continuous variables were standardized before creating the interaction terms to avoid multicollinearity with their main effects (Aiken and West, 1991) and enhance the interpretability of the findings.

Results

Manipulation checks

To check whether we manipulated bargaining power correctly we asked respondents to indicate their perceived bargaining power on a visual scale from 0 (the company has all the power) to 10 (I have all the power) after they had read the scenario. Participants assigned to the low power condition reported a significantly lower value of bargaining power compared to those in the high power condition (M_{high power} = 7.65, SD_{high power} = 1.53; M_{low power} = 4.09, SD_{low power} = 1.90; t(106) = 10.72, p < 0.001).

Table 1 presents the descriptive statistics and bivariate correlations between the study variables. In general, 68.5% of the participants chose to engage a counterpart, 44.4% to make a suboptimal request, and 27.8% to optimize their request. Tables 2–4 exhibits the logistic regression results.

TABLE 1

TABLE 1. Means, standard deviation, and correlation between variables (Studies 1 and 2).

TABLE 2

TABLE 2. Binary logistic regression results for engaging (Study 1).

TABLE 3

TABLE 3. Binary logistic regression results for requesting (Study 1).

TABLE 4

TABLE 4. Binary logistic regression results for optimizing (Study 1).

As regards the decision to engage the negotiation (Table 2), we found a significant effect for bargaining power. Odds ratio (OR) value, 2.96, p = 0.02, 95% CI (1.22, 7.21), indicates that the more relative power participants have, the more likely (2.96 times) they are to engage a negotiation. More specifically, those low on power had a probability of 58.18% to engage a negotiation, whereas those high on power had an 80.53% chance. Although all other main effects were insignificant, the interaction of bargaining power × sadness was significant. To probe this interaction, we ran two binary logistic regressions—one for low and one for high bargaining power—in which our two dispositional emotions were regressed on engaging along with the other covariates. Our analysis showed that sadness was the only significant predictor when power was high, OR = 0.31, p = 0.01, 95% CI (0.13, 0.74), such that sad participants who possess more relative bargaining power are 3.23 less likely to engage. In fact, for one unit increase in sadness, the probability of engaging for powerful participant drops to 62.25%.

Likewise, for requesting (Table 3), bargaining power is a significant predictor, OR = 4.45, p < 0.01, 95% (1.879, 10.548), such that those who possess it are 4.45 times for likely to make a suboptimal request (probability of requesting: 26.70% when power is low and 61.77% when power is high). At Step 2, we found a significant interaction of power × happiness. To understand the nature of this interaction, we performed two binary regressions—one for low and one for high bargaining power. The results indicate a marginally significant effect of happiness when bargaining power is low, OR = 2.06, p = 0.07, 95% CI (0.94, 4.49), such that happy participants are 2.06 times more likely to make a request (probability of requesting increases to 40.61% when happiness increases by one unit). Nonetheless, for those high on power, this positive effect was reversed, although it was not statistically significant. In addition, we found that sadness had a marginally significant effect, OR = 0.58, p = 0.08, 95% CI (0.27, 1.07). Thus, sad participants are 1.72 times less likely to make a request (probability of requesting drops to 49.18% for one unit increase in sadness).

As for optimizing (Table 4), we found significant main effects for bargaining power, OR = 7.41, p < 0.01, 95% CI (2.36, 23.29), and sadness, OR = 0.29, p < 0.01, 95% CI (0.14, 0.63). Such results indicate that powerful participants are 7.41 more likely to optimize their request (probability for optimizing is 7.68% when power is low and 38.11% when power is high), while sad participants are 3.40 less likely to optimize. Most interestingly, we found significant interaction effects for power × sadness. To probe this interaction, we again ran two binary logistic regressions (high vs. low bargaining power). When bargaining power is high, sadness has a negative impact on the decision to optimize the request, OR = 0.11, p < 0.01, 95% CI (0.03, 0.43), such that sad individuals are 9.09 times less likely to optimize their requests (probability of optimizing drops to 5.75% for one unit increase in sadness). Happiness had a negative, but insignificant effect. At low bargaining power, both dispositional emotions had an insignificant impact on requesting.

As a robustness check to our findings, we excluded all controls from the analysis as they had a minor impact on the dependent variables and rerun the logistic regressions. Their exclusion did not substantially change our results. The effects remained statistically significant and in the same pattern as reported above.

Discussion

Study 1 aimed at advancing our knowledge on the role of two affect dispositions (happiness and sadness), one positive emotion with high activation and one negative emotion with low activation, and bargaining power on three stages of the negotiation initiation (engaging, requesting, and optimizing). Our findings corroborate our expectations that bargaining power is pivotal to negotiation initiation. However, affect dispositions are capable of restraining the dominant role of bargaining power. Specifically, we found that increased levels of sadness lower the probability of powerful individuals to engage a counterpart, make a request, or optimize the request. More aptly put, perceptions of sadness may block activation of a negotiable opportunity despite the relative power advantage. Being sad has no downward spiral effect when relative power is low. On the contrary, the results indicate that perceived happiness can surpass the high activation threshold that low bargaining power sets, but only in the stage of requesting. As regards engaging and optimizing, no matter the level of perceived happiness, having low power seems critical. Finally, similar to the insignificant effect of sadness when power is low, happiness failed to produce an upward spiral to initiation when bargaining power is high.

Study 2

Participants and Design

As in Study 1, we employed workers from Prolific Academic with the same sample characteristics and used the same pre-screening criteria plus excluding those who had participated in the previous study. This time, 168 full-time employees were recruited and provided valid responses (33.8% of those initially recruited failed to pass the attention and recall questions and were excluded from the analyses; 47% women; M_age = 35.29, SD_age = 12.34; M_{work experience} = 2.52, SD_{work experience} = 2.17). They were randomly assigned to one to four cells of a 2 (feeling happy vs. feeling sad) × 2 (high vs. low bargaining power) between-subjects design. To compensate for workers’ time, we offered a baseline payment of £1.2 (£10.30/hour) and the average time needed to complete the survey was 8 min.

The second study aimed at documenting the impact of the same dispositional emotions at two different conditions of state (incidental) affect (happiness vs. sadness) and bargaining power (low vs. high) on each stage of negotiation initiation (engage, request, and optimize). We induced state affect using hypothetical incidents describing happy or sad situations (see below) and we manipulated bargaining power as in Study 1. Also, we assessed dispositional affect (happiness and sadness) and negotiation initiation (engage, request, optimize) using the same measures as in Study 1. The Cronbach alphas for happiness (joviality dimension of PANAS) and sadness were 0.94 and 0.90, respectively.

Manipulation of state affect

To induce happiness or sadness, which represent two common affective states, participants read either of two scenarios developed by Larsen and Ketelaar (1991) and then took a couple of minutes to imagine the situation as vividly as possible. The positive affect condition required participants to imagine themselves winning €50,000 in a lottery and then taking a vacation to Hawaii. The negative affect condition asked participants to imagine being embarrassingly expelled from school and then having a close friend die from a painful, incurable disease. At the background of each scenario, we placed a picture that was relevant to the emotion. Then, we requested from those participants who read the happy situation to write how they would spend their time in Hawaii and to those who read the sad one to write about a similar experience that had happened to them in the past. To check the embedded manipulation and use it as a repeatable measure to assess changes in their affect throughout the experiment, we used a bipolar scale. Participants indicated how happy or how sad they felt by moving a marker of a visual analog scale right or left in one-unit intervals along a continuum from 0 (sad) to 10 (happy).