Your gain my pain? The effects of accounting information in uncertain negotiations

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Prior studies on buyer-supplier negotiations show that refined accounting information can enhance negotiation processes and outcomes. We extend these studies by considering the influence of payoff uncertainty, which is commonly present in negotiations. Payoff uncertainty can increase friction between negotiators when it induces them to take different reference points, exacerbating the level of conflict. We theorize that refined accounting information, even when unrelated to the source of uncertainty, can help to limit the adversarial effects of payoff uncertainty on negotiation behavior and outcomes by enabling negotiators to identify mutually beneficial tradeoffs. We conduct an experiment in which 89 dyads of buyers and suppliers participate to test our expectations. Results show that payoff uncertainty reduces negotiators’ use of integrative tactics relative to distributive tactics, which in turn negatively influences joint profit. Refined accounting information, however, weakens the negative impact of payoff uncertainty on behavior, mitigating the negative impact on joint profit.

Original languageEnglish
Pages (from-to)20-42
Number of pages23
JournalManagement Accounting Research
Volume41
Issue numberDecember
DOIs
Publication statusPublished - 2018

Fingerprint

Uncertainty
Pain
Accounting information
Profit
Suppliers
Tactics
Buyers
Experiment
Reference point
Negotiation behaviour
Friction
Trade-offs
Negotiation process
Dyads

Keywords

  • Accounting information
  • Buyer-supplier negotiations
  • Negotiation outcomes
  • Negotiation tactics
  • Payoff uncertainty

Cite this

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title = "Your gain my pain? The effects of accounting information in uncertain negotiations",
abstract = "Prior studies on buyer-supplier negotiations show that refined accounting information can enhance negotiation processes and outcomes. We extend these studies by considering the influence of payoff uncertainty, which is commonly present in negotiations. Payoff uncertainty can increase friction between negotiators when it induces them to take different reference points, exacerbating the level of conflict. We theorize that refined accounting information, even when unrelated to the source of uncertainty, can help to limit the adversarial effects of payoff uncertainty on negotiation behavior and outcomes by enabling negotiators to identify mutually beneficial tradeoffs. We conduct an experiment in which 89 dyads of buyers and suppliers participate to test our expectations. Results show that payoff uncertainty reduces negotiators’ use of integrative tactics relative to distributive tactics, which in turn negatively influences joint profit. Refined accounting information, however, weakens the negative impact of payoff uncertainty on behavior, mitigating the negative impact on joint profit.",
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Your gain my pain? The effects of accounting information in uncertain negotiations. / Essa, Samy A.G.; Dekker, Henri C.; Groot, Tom L.C.M.

In: Management Accounting Research, Vol. 41, No. December, 2018, p. 20-42.

Research output: Contribution to JournalArticleAcademicpeer-review

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