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Don’t Worry, be Angry – Marketing Study Shows Angry Negotiators Walk Out with a Better Deal

08.12.2009
Professor Teck-Hua Ho’s wife loved a particular painting and wanted to buy it. Ho advised her not to appear excited – to disguise her emotions – in front of the salesperson.

After an hour or so, Ho walked out of the store with the $380 painting – for only $120. Negotiation, Ho knows, is an art, too. In new research conducted with Assistant Professor Eduardo Andrade, Ho finds deflating – or inflating – one’s emotions can be a winning strategy.

Ho and Andrade are the co-authors of “Gaming Emotions in Social Interactions” – the lead article in the December 2009 issue of The Journal of Consumer Research. The paper reveals that people strategically “game” emotions to achieve the desired outcome of a negotiation.

Ho is marketing group chair and Andrade is an assistant marketing professor at the University of California, Berkeley’s Haas School of Business.

Ho and Andrade hypothesized, first, that people would strategically display anger when given the opportunity to do so, and second, that the strategy might actually increase the angry person’s payoff in the negotiation. “To do so, we created a paradigm that allowed us to precisely measure the gap, if any, between real and expressed emotions, as well as to test the actual financial consequences of the ‘emotion gaming’ strategy,” says Ho.

In the Haas School’s xLab, a social science laboratory, the researchers divided subjects into random groups: the proposers and the receivers. One proposer and one receiver were paired as partners, but they remained anonymous to each other during the games.

They began with a “dictator game.” Ho and Andrade gave $10 to each proposer and instructed him/her to divide the money with the respective partner. Both players knew the receiver had to accept any offer. All proposers chose to keep a larger share of the pie. Receivers were then asked to report their current level of anger on a 101-point scale. On average, receivers reported a relatively mild level of anger.

Next, the researchers launched the “ultimatum game,” where the same players were paired together. Again, the proposer decided how to divide the pot. This time, the receiver could either accept or decline the offer. If he said, “no deal” - neither proposer nor receiver would receive any portion of the $10. Most importantly, just before the proposer sent the offer, researchers told the receiver to report (again) his or her current level of anger. Researchers told only half of the receivers that this second report would be sent to the proposer before he made his decision on how to divide the pie.

The study found when receivers knew that their level of anger would be reported to proposers before the latter made a decision, receivers significantly inflated their current level of anger—that is, they “gamed” their emotions. Moreover, the strategy paid off. Angrier receivers extract a larger share of the pie from the paired proposers. One participant said, “I did it on purpose in order to be treated more fairly.”

Ho explains, “This equates to ‘This is my final offer, take it or leave it.’ The proposer knows he caused the receiver to be angry in the dictator game. That’s the key. That’s why the proposer is willing to make a better offer in the ultimatum game.”

However, Ho notes this was a one-shot test, and faking one’s emotion continuously may not produce the same favorable results. He compares the experiment to an eBay transaction between an occasional buyer and seller in which there is no concern for reputation because the transaction is anonymous.

A subsequent experiment provided further evidence that successful “emotion gaming” is contingent on the credibility of the inflated emotion. “When proposers believed that the receivers’ report of anger was credible, they offered a higher share to angrier receivers. When proposers noticed that the receivers could be pretending to be angrier than she or he really was, they completely disregarded their partner’s expressed feelings,” says Andrade.

Finally, Ho and Andrade attempted to test whether emotion is more influential than plain information. This time, receivers could rate the offer by how angry it made them feel or how much the offer fell below their expectations. Most chose to report their anger. Displays of anger, the study suggests, are more effective than displays of inflated expectation because they are possible precursors to acts of irrationality or vindictiveness, which in this experiment could result in a rejection of the offer and both sides leaving empty-handed. The researchers reasoned an exaggerated show of anger might scare the proposer into thinking that the receiver would reject the offer altogether. Instead of risking that, the proposer made a more generous offer.

“We are not suggesting people should always appear angry to get what they want, “cautions Ho, “People naturally move their emotional state in a calculated way to get what they want. It might not always be anger. Sometimes we must act happy to get something even when we’re not feeling happy.”

As for Ho, he says his work has given him a new perspective on the art of bargaining. “Now when I go to a negotiation and people become angry, I am personally more able to appreciate the person’s motive.”

Full paper: http://faculty.haas.berkeley.edu/hoteck/PAPERS/Andrade-Ho2.pdf

Pamela Tom | Newswise Science News
Further information:
http://www.haas.berkeley.edu

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