Negotiation is an important aspect of the decision-making process. The term, negotiation, can be defined as a “decision-making process in which people mutually decide how to allocate scarce resources.” Negotiations are often helpful during conflicts without any remedial procedures and when people need agreements without opting for any form of aggression. Despite this importance to negotiations, extensive research in this area has shown that negotiation performance is often less than optimum or required levels.
In this scenario, many researchers feel that experience plays a vital role in making a successful negotiation. To be precise, Thompson stated that experienced negotiators can better assess the interests and priorities of others, and make strategic use of well-suited issues. Also, they are good at identifying such issues. Gathering and exchanging information for better personal and joint outcomes are the main aspects pertaining to experienced negotiators’ successful business dealings. Moreover, it has been observed that uninformed, experienced negotiators can perform as well as informed counterparts due to their ability to gather necessary information and adapt accordingly for a successful deal. For example, Levy and Sharma stated that situational adaptability increases with experience.
Various studies have been conducted to analyze the relationship between experience and the performance of negotiators towards achieving an integrative outcome in business dealings. The following example gives an idea of that aspect. The study was conducted by Bazerman, Magliozzi, and Neale, and submitted in 1983. They studied the determining factors for successful negotiations in integrative bargaining situations. They focused on the effects of experience and framing of negotiators and profit constraints on the outcomes of integrative bargaining.
For the study, they chose one hundred and seventy-eight graduate and undergraduate students who were divided into six groups of a free market simulation. The subjects were randomly categorized into buyers or sellers, positively or negatively framed, in a constraint or no constraint condition, etc. They maintained an equal number of buyers and sellers among all the six groups. The subjects were allowed to make as many negotiations and number of buying/selling as they could do. At the same time, it had to be assumed that the product quality remained the same for all buyers, and profits would vary based on delivery terms, discounts, and financial terms. Certain standards were set to determine maximum and minimum profits for buyers and sellers. When a buyer-seller due reached an agreement, they had to fill in a ‘transaction form’ that included their names along with all the details of the transaction. They were allowed to complete one transaction after the other in a span of 30 minutes.
While analyzing the results, they estimated a profit level of $5200 per transaction to meet the Nash equilibrium, economic prediction of the calculated solution for the experiment. With respect to the equilibrium, they observed all the transactions and found that integrative outcomes increased with increased negotiations. Interestingly, they found that the transactions resulted in profits to both buyers and sellers. Moreover, there was an increase in profits for hypothetically less profitable negotiators, while the profit levels of more profitable negotiators remaining constant. They concluded that experience results in more integrative outcomes, leading to mutual benefit for both negotiators without any apparent profit loss for either party.
They further explained that experience had a great influence on the number of integrative outcomes. To be precise, negotiators initially arrived at distributive agreements owing to fixed-pie and win-lose perspectives. However, with an increase in the number of negotiations, the fundamental bias was broken leading them to involve in integrative behavior. Hence, it can be assumed that experienced negotiators can have an advantage in performing effective negotiations over inexperienced negotiators, due to improvements in acquired knowledge related to market trends and priorities of others.
However, certain researchers do not completely agree that experience enhances integrative outcomes. They say that experienced negotiators may be efficient in making mutually beneficial trade-offs. However, they may not be efficient in identifying compatible issues when the other party has similar interests, as recognizing similarities may be difficult than finding out differences in preferences. They further state that even these scenarios may end up in mutual agreements, during incorrect efforts of the parties to gain an edge over the others, leading to mutual but decreased overall profit. Nevertheless, they agree that judgments about counterparts’ preferences increased with experiences.
To conclude, it can be stated that experience plays a valuable role in performing successful negotiations to result in integrative outcomes. For experience enables gathering necessary information and identifying opponents’ preferences accordingly. However, it is argued by some scholars that experience may be helpful in recognizing differences in preferences but not compatible issues.