How entitled are you?

By on / Daily, Negotiation Skills

Adapted from “Entitlement in Negotiation,” first published in the Negotiation newsletter.

Simon Gachter of the University of St. Gallen in Switzerland and Arno Riedl of the University of Amsterdam studied the tendency of negotiators to maintain allegiance to past norms concerning entitlement, even when those norms are unrelated to the parties’ real bargaining power. The researchers use the term moral property rights to refer to this adherence to past norms.

In a fascinating experiment, the researchers had pairs of participants compete in a general knowledge test. The higher scorer was named the “winner” and the lower scorer was named the “loser.” The pairs were told that past winners had received 1,660 points (which they were told earned them $14), and that losers had received 830 points (worth $7). A roll of dice then determined whether that payout would go into effect or the parties would be given only 2,050 points to negotiate between themselves. In the latter case, if they could not agree on the distribution, both sides would receive nothing.

The key results concern pairs in the second condition. Notice that 2,050 points do not allow each party his or her historic entitlement and that parties have equal bargaining power, since they both would get nothing if they failed to reach an agreement. A rational analysis would suggest that, on average, the winner and loser would each get 50% of the 2,050 points. Instead, the most common distribution among pairs was two-thirds to one-third, consistent with the historic entitlement! Negotiators adhered to past norms that were not warranted by current economic conditions.

The researchers cite real-world examples of this phenomenon, from the wealthy seeking rent control over their apartments to the historic claims of Israelis and Palestinians. Negotiators would be well advised to consider whether they are over weighing past entitlements when making decisions.

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