Toughen Up for Better Virtual Deals
Contrary to the established belief that being friendly wins people over, there are situations where one would catch more flies with vinegar than honey – namely at an online bargaining table.
When investigating the often-overlooked non-economic factors governing outcomes of distributive negotiations, Prof Martha Jeong and her team zoomed in on communication styles in a virtual setting. With a natural language processing algorithm, they detected and quantified warmth/toughness in written messages from hypothetical buyers making identical offers. Despite making a greater effort in composing their messages, polite buyers were perceived as lower in dominance, in turn paying 15% more than their firm counterparts did. By being more direct and making barer commands, “negotiators could save effort, achieve better economic outcomes”, and surprisingly, without taking a toll on sellers’ satisfaction with the interaction. These findings may empower those finding it stressful to adopt an assertive demeanor in person to try switching their strategy when bargaining with a keyboard.
The team is delving into other factors such as gender and age in their forthcoming studies.
Prof Martha Jeong is Assistant Professor of the Department of Management and a Lee Heng Fellow. Her research looks into judgment, negotiations, and decision-making.