Big Five personality traits in simulated negotiation

10/08/2018

Big Five personality traits in simulated negotiation settings | EuroMed Journal of Business | Vol 13, No 2

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Advanced Search HOME BROWSE JOURNALS & BOOKS EUROMED JOURNAL OF BUSINESS BIG FIVE PERSONALITY TRAITS IN SIMULATED NEGOTIATION SETTINGS

VOLUME 13, ISSUE 2

Big Five personality traits in simulated negotiation settings Author(s):

Pedro Fontes Falcão, (Instituto Universitário de Lisboa, Lisboa, Portugal) ...Show all authors

Abstract:

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Purpose After a hiatus in the research on individual differences in negotiation, there has been a surge of renewed interest in

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recent years followed by several new findings. The purpose

EuroMed Journal of Business

of this paper is to explore the effects that personality, as structured by the five-factor model, have over negotiation behavior and decision making in order to create new knowledge and prescribe advice to negotiators.

Design/methodology/approach This study replicates observations from earlier studies but with the innovation of using a different methodology, as

ISSN: 1450-2194 Online from: 2006 Subject Area: Operations, Logistics & Quality

data from a sample of volunteer participants were collected in regard to their personality and behavior during two computerized negotiation simulations, one with the potential for joint gains and the other following a more

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traditional bargaining scenario.

Findings

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Significant results for both settings were found, with the

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personality dimensions of agreeableness, conscientiousness, and extraversion systematically

https://www.emeraldinsight.com/doi/full/10.1108/EMJB-11-2017-0043

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reoccurring as the most statistically relevant, although expressing different roles according to the type of negotiation and measure being registered. The findings thus suggest a multidimensional relationship between personality and situational variables in which specific traits can either become liabilities or assets depending upon whether the potential for value creation is present or not.

Originality/value The new findings on the impacts of personality traits on both distributive and integrative negotiations allow negotiators to improve their performance and to adapt to specific distributive or integrative negotiation situations.

Keywords:

Conflict management, Decision making, Organizational behaviour, Personality, Negotiation, Big Five

Type:

Research paper

Publisher:

Emerald Publishing Limited

Received:

24 November 2017

Revised:

26 February 2018

Accepted:

15 March 2018

Copyright:

© Emerald Publishing Limited 2018

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Published by Emerald Publishing Limited Licensed re-use rights only Citation:

Pedro Fontes Falcão, Manuel Saraiva, Eduardo Santos, Miguel Pina e Cunha, (2018) "Big Five personality traits in simulated negotiation settings", EuroMed Journal of Business, Vol. 13 Issue: 2, pp.201-213, https://doi.org/10.1108/EMJB-11-2017-0043

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Article Earlier research on personality and negotiation has not delivered consistently conclusive findings (Druckman, 1971; Hermann and Kogan, 1977; Pruitt and Carnevale, 1993), leading some authors to wonder if individual differences do have a relevant role in determining negotiation behavior (Lewicki et al., 1994; Thompson, 1990). Nevertheless, due to some emerging and encouraging findings (e.g. Barry and Friedman, 1998; Bowles et al., 2005; Carnevale and De Dreu, 2006; De Dreu et al., 1999; Dimotakis et al., 2012; Sullivan et al., 2006) as https://www.emeraldinsight.com/doi/full/10.1108/EMJB-11-2017-0043

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well as meta-analyses reigniting researchers’ interest (e.g. Elfenbein, 2015; Sharma et al., 2013), it is this study’s goal to take part in this renewed focus and shed new light on the role of individual differences in negotiation processes. We report the results obtained in our experimental design, which involved a computerized platform on which individuals faced both distributive and integrative negotiation simulations. Unlike the usual dyadic interactions often used in laboratory settings to study negotiation behavior, this research method should be able to provide a new lens and layer of findings by distilling the effects of individual differences over specific negotiation outcomes. While negotiation is itself an interpersonal phenomenon in which external inputs help shape the course and determine the outcome, a design that replaces the negotiator counterpart with an algorithm should be at least useful in increasing standardization and provide a fresh perspective of the relationship between personality and negotiation measures. To investigate this, our negotiators were asked to fill out a personality inventory followed by two computerized negotiation simulations, the first consisting of purchasing a used car, in which the participant assumed the role of buyer – distributive negotiation – and the second of an iterated prisoner’s dilemma framework used as a proxy for a negotiation scenario in which value creation (joint gains) is possible – integrative negotiation.

Five-factor model of personality and negotiation Section: Choose While many definitions of personality have been proposed, most researchers agree on a number of elements that frame personality as an organized, dynamic, and consistent pattern of traits and unique characteristics that shape individual behavior (Feist and Feist, 2009; Phares and Chaplin, 1997; Ryckman, 2008). Within trait theories, which recognize the existence of a number of bipolar, isolated, and relatively stable characteristics that differ between individuals and influence behavior, five recurring broad traits began to be consistently identified, ultimately resulting in the five-factor model of personality (Costa and McCrae, 1995), the ensuing research of which would come to demonstrate its ubiquity (Terracciano et al., 2011), whether in terms of cross-cultural and linguistic validity (Costa et al., 1999; McCrae, 2001, 2002; Terracciano et al., 2001) or longitudinal stability (Costa and McCrae, 2012; Terracciano et al., 2006). The Big Five traits are: neuroticism, the predisposition to be troubled by negative emotions such as anxiety, insecurity, anger, or envy; extraversion, relating to the degree of social engagement and perceived energy levels that individuals possess, including a subcomponent of assertiveness; openness to experience, whose high-scoring individuals are often perceived as more intellectually curious, creative, and insightful; agreeableness, which reflects the propensity of an individual to be more cooperative and compliant rather than suspicious and competitive; and conscientiousness, a factor describing individual differences in terms of selfhttps://www.emeraldinsight.com/doi/full/10.1108/EMJB-11-2017-0043

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discipline, orderliness, and need for achievement (McCrae and Costa, 1987; Thompson, 2008). In the field of negotiation studies, the definition of the concepts of distributive and integrative negotiation types was first made by Walton and McKersie (1965) and later popularized by Raiffa (1982). Simply put, when both parties perceive the available resources to be distributed as limited, they are compelled to become competitive and attempt to maximize their own gains at the expense of others – a win-lose situation, or distributive negotiation (Lewicki et al., 1999), often present in fixed-sum bargaining or haggling (Barry and Friedman, 1998; Kersten, 2001). An integrative negotiation is instead present during a negotiation in which one’s individual gains do not translate in equal amount into the other’s losses. A mutual process of identifying common and different interests enables creative solutions that increase the total sum of resources available and the possibility for joint gains (Foo et al., 2004; Thompson et al., 1996), thereby creating value for both parties. In terms of earlier research, Barry and Friedman (1998), and to some extent Dimotakis et al. (2012), have been responsible for two of the main studies analyzing the effect of personality, as conceptualized in the five-factor model, on integrative and distributive negotiation settings. First, findings suggest that extraversion may be simultaneously a liability or an asset depending on whether the negotiation is mainly distributive or integrative in nature, given that information exchange and concern for social ties affect negotiation performance differently in each type of negotiation (Barry and Friedman, 1998). In addition, it has also been argued that the subcomponent of assertiveness within extraversion can be an asset for both types of negotiation (Elfenbein et al., 2008). Second, agreeableness is suggested to be the most important dimension regarding interpersonal relations and it has been observed that agreeable individuals prefer non-assertive tactics (Cable and Judge, 2003; Jensen-Campbell et al., 1996). While some links have been detected between high agreeableness and lower distributive outcomes due to greater social concerns, no significant evidence has been found connecting this dimension with integrative bargaining (Amanatullah

et al., 2008; Barry and Friedman, 1998; Morris et al., 1999). It may be worth noting, however, that Dimotakis et al.’s (2012) experiment did have highly agreeable individuals reporting slightly higher levels of positive affect after integrative negotiations. In addition, Barry and Friedman (1998) posited how agreeable and extroverted individuals would be more vulnerable to the anchoring bias, but opposing arguments (e.g. Galinsky and Mussweiler, 2001) do also exist given how the facet of high perspective-taking is resilient against this bias. For these reasons, and because other studies also showed high perspective-taking to increase distributive outcomes (Bazerman and Neale, 1982), Amanatullah et al. (2008) argued that agreeableness may offset


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subcomponents that have different effects on bargaining behavior and performance. Recent research has also provided links between reduced interpersonal gains although favorable economically and specific personality traits associated with low agreeableness such as narcissism and psychopathy (e.g. Curry et al., 2011; Park et al., 2013; ten Brinke et al., 2015; Erkutlu and Chafra, 2017). Third, conscientiousness could be expected to have an important role since negotiation performance has often been associated with preparation and the structured mindset that conscious individuals exhibit, but no concrete evidence has been found yet (Barry and Friedman, 1998). Fourth, while for neuroticism researchers report an increased reactivity and frequency of negative experiences, which may lead to a higher number of impasses (Elfenbein et al., 2008; White et

al., 2004), the impact on performance has not revealed a significant relationship. Fifth, similar results, or lack of, characterize the research on openness to experience, a dimension whose high-scoring individuals feature divergent patterns of thinking that could be beneficial in integrative settings (Barry and Friedman, 1998). Based on earlier research, this study tackles issues that have not been sufficiently elucidated. To do that, we test the following hypotheses in a computerized setting:

Hypotheses H1.Extraversion is expected to be a liability in the measures for the distributive negotiation, but an asset when joint outcomes are present in the integrative negotiation.H2. Agreeableness is to follow the same role and effect as extraversion due to both these dimensions being positively related with prosocial behavior.

H3. Conscientiousness (as a dimension often linked with planning and task-oriented behavior) will help high-scoring individuals to achieve better objective results in both negotiations.

H4. Neuroticism and openness to experience are expected to play a less predominant role, with the weakest effect over the experiment measures. In earlier research, H1 and H2 have been validated but only in a face-to-face context; H3 has been tested only in a face-to-face context and not validated; and H4 has been tested only in a face-to-face context and no significant correlations were detected. This study contributes to the literature as it highlights that individual differences have a role in determining negotiation behavior, as shown in studies that report https://www.emeraldinsight.com/doi/full/10.1108/EMJB-11-2017-0043

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findings on the role of individual differences in negotiation (e.g. Bowles et al., 2005; Carnevale and De Dreu, 2006; Sullivan et al., 2006).

Method

Section: Choose

Participants The personality questionnaire and both simulations were administered online to 255 Portuguese volunteers through a web platform developed specifically for this project. No specific social background or any other differentiating criteria were required from the participants apart from being at least 18 years old. Of 255 participants, 19 were excluded for providing unusable data due to platform codification issues undetected by input validation, leaving 236 participants (54.5 percent female) whose age ranged from 18 to 67 (mean=30.40; SD=10.87).

Procedure In the distributive negotiation simulation, participants had to negotiate the purchase of a previously selected used car in the role of buyer. A context scenario based on a real-life event was provided, emphasizing elements such as necessity, budget, and relationship concerns. Without time constraints, participants were able to decide whether to make the first offer, accept the other’s offer, repeat their previous offer, make counter proposals, or abandon the negotiation without a deal. The computer algorithm, subjected to pilot experimentation and built upon feedback of genuine car salesmen, allowed for some degree of bargaining but featured a standardized behavior protocol with a fixed aspirational value and zone of possible agreement. Some control behaviors were also present such as a mechanism to deal with unreasonably low offers and a limit of “exchanges” after which the computer would force the negotiation to an end by stating the price had reached the reservation value and it was “take it or leave it.” Regarding the integrative simulation, which similarly contemplated a context scenario in a company setting where the negotiation could have an impact on the company’s revenues, the negotiation mechanism basically followed the formulation of an iterated prisoner’s dilemma, as developed in 1950 by Merrill Flood and Melvin Dresher (Poundstone, 1992) in which the number of rounds (15) is unknown to the participants. The computer’s algorithm for this simulation was the tit-for-tat (TFT) strategy, which normally starts by cooperating and then mimics the opponent’s last move. In this study, the TFT strategy was programmed to make a surprise retaliation after the participant cooperated three times consecutively. This action would occur only once and would always be followed by cooperation, after which the normal TFT mechanism would resume. In the next-to-the-last round, participants were informed that they had exactly two rounds left. These elements in the simulation were added in order to enable the collection of data, which will now be described.


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Measures In the first part of the web platform participants completed the NEO Five-Factor Inventory (NEO-FFI) test, a reduced version of the Revised NEO Personality Inventory aimed at providing quick, reliable, and valid measures of personality dimensions (Costa and McCrae, 1992). The test has 60 items (with a five-point Likert scale responses) grouped into five subscales, each having 12 items corresponding to the underlying dimensions of the five-factor model. Respondents had to assess their degree of agreement with the self-descriptive statements from “Strongly Disagree” to “Strongly Agree.” Levels of Cronbach’s α assessing internal consistency reliability were 0.86 for neuroticism, 0.80 for extraversion, 0.69 for openness to experience, 0.63 for agreeableness, and 0.85 for conscientiousness. For the distributive negotiation simulation, the measures registered were: initiative – dichotomous variable on whether the participant opted to take initiative and submit an offer or preferred to ask the seller for how much he/she was looking for to sell the car; first offer – value of the first offer measured against the seller’s aspirational value which was the announced price; deal value – whenever an agreement was reached in which the closing value was measured against the seller’s aspirational value; negotiation range – amplitude between the first offer and agreement value; rounds – the number of rounds played by participants. For the integrative negotiation simulation the measures were: score – the sum of each round’s quantitative result according to the iterated prisoner’s dilemma payoff matrix; cooperativeness – number of rounds in which participants played cooperatively; and strategic properties – group of dichotomous variables registering the observation of specific behavioral properties, which according to Axelrod (1980a, b, 1984) were central to the most evolutionary robust strategies in the iterated prisoner’s dilemma tournaments he organized – namely: nice – playing cooperatively in the first round; non-envious – playing cooperatively in the last round; retaliating – playing competitively after the surprise defection; forgiving – playing cooperatively two rounds after the surprise defection, having previously played competitively (retaliated).

Results

Section: Choose

Descriptive statistics for the different NEO-FFI dimension scores are in Table I. Neuroticism was the variable with the lowest mean (24.75), highest standard deviation (8.06), and greatest range of scores. Although outside the scope of this project, gender differences were also significantly present for all dimensions except extraversion. To assess the strength and direction of the relationships between the different dimensions measured by the NEO-FFI, Pearson’s productmoment correlation analysis was run and the results are shown in Table I. https://www.emeraldinsight.com/doi/full/10.1108/EMJB-11-2017-0043

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Neuroticism appears as significantly and negatively correlated with all other dimensions, especially extraversion (r=−0.52) as it is able to explain 27 percent of its variability (r2 =0.27). Openness to experience was the only variable having no statistically significant relationship with the others.

Distributive negotiation Of the 235 participants, 53 were excluded from analysis as they either did not reach an agreement with the car seller or they did so but by immediately accepting without bargaining. The descriptive statistics for the remaining 182 participants are in Table II. In addition, only 13.2 percent of these chose to take initiative but no relationship between personality and this particular moment of decision was found. Multiple linear regression analyses were run for the measures of first offer, deal value, and negotiation range. Results for goodness-of-fit statistics are in Table II. Deal value and negotiation range appear to be significantly predicted by the personality dimensions assessed by the NEO-FFI ( F(5, 175)=6.88, p