What do people value when they negotiate?

Research by Professors Jared R. Curhan ^[1] and Heng Xu of MIT’s Sloan School of Management and Hillary Anger Elfenbein of Berkeley’s Haas School of Business provides useful insights concerning this basic question.

Using survey data collected from everyday negotiators and filtering it through a sorting procedure conducted by negotiation professionals, the researchers developed a Subjective Value Inventory (SVI) that includes four factors:

• “Feelings About the Instrumental Outcomes” represents elements such as winning the negotiation, or more generally, gaining a large share of the pie
• “Feelings About the Self” includes elements such as ‘saving face’ and ‘doing the right thing’
• “Feelings About the Negotiation Process” includes elements such as being listened to by the other party
• “Feelings About the Relationship” includes elements such as establishing trust and building a strong relationship.

Putting their SVI measure to the test, Curhan, Elfenbein, and Xu asked 104 MBA students at the Sloan School of Management to engage in a role-play exercise in two person teams. They then asked the students to rate their negotiated outcomes using the four-factor SVI measure. Finally, the researchers asked each student to assess his willingness to work again with the same teammate in cooperative tasks.

Participants reporting higher SVI scores from their negotiation exercise indicated a significantly higher preference for working with their teammates in the future. Interestingly, the actual outcomes of the negotiation alone had no discernible impact on teammate preference ratings.

The lesson: Don’t assume that satisfaction in a negotiation is all about the bottom line. By paying attention to all four SVI factors in your next negotiation, you can improve satisfaction with the results and build a strong working relationship.