The Impact of Alternatives to Settlement in Dyadic Negotiation

Abstract

This study examines how differential power among negotiators (in the form of alternatives available to the individuals if the parties fail to reach a negotiated settlement) influences the parameters (e.g., the aspiration levels and reservation prices), the process, and the outcome of the negotiation. The results suggest that (a) the possession of an alternative increases one′s own outcome as well as joint outcome; (b) the more attractive or valuable the alternative, the greater the benefits regarding own and joint outcome; and (c) the better one′s own alternative relative to the other parties′ alternative, the larger one′s piece of the resource pie (i.e., one′s benefit increases).