AcknowledgementsWe are grateful to Andrea Drake, Martijn Schoute, Eelke Wiersma and Alexandra Van den Abbeele for their valuable feedback on earlier versions of this paper. We also thank seminar participants at VU University, and participants at the 2013 AAA Management Accounting Section midyear meeting and the 2012 IAAER conference for useful comments and suggestions on draft versions of the paper.[1]
AbstractPrior 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 uncertainty, which is commonly present during negotiations. Uncertainty increases friction between negotiators as they take different reference points, exacerbating the level of conflict. We theorize that refined accounting information, even when unrelated to the source of uncertainty, helps to limit its adversarial effects on behavior and outcomes by enabling negotiators to identify mutually beneficial tradeoffs. We develop an experiment in which 89 dyads of buyers and suppliers participate to test our expectations about how uncertainty interacts with accounting information in affecting negotiation behavior and outcomes. Results show that 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 uncertainty on behavior, mitigating the negative impact on joint profit.
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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