Using policy modeling to examine the negotiation process
Abstract
A policy modeling process was used to examine the utilities and process of two points of view in a car negotiation. On separate computers, a car seller and a car buyer negotiated a deal involving price, financing, and warranty. The policy model provided parameters that describe the importance weights, subjective values, and the tradeoff strategy among options. The policy model predicted (1) the pattern of offers and (2) the rating evaluation of offers in the negotiation. An averaging tradeoff strategy was found to be more representative of how subjects combined options than an adding tradeoff strategy. The outcome of the negotiation was evaluated by the correspondence to the Nash solution. The Nash solution indicated the joint satisfaction possible in the negotiation. Experience did not increase the proximity of the agreements to the Nash solution. Generally, at least one party exceeded their resistance points, however, often more beneficial solutions were available. Results are discussed in terms of the role of utility models, the effect of bargaining zone, and implications for future research.
Degree
Ph.D.
Advisors
Stevenson-Busemeyer, Purdue University.
Subject Area
Occupational psychology|Marketing|Economics
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