Abstract
This study provides first empirical results on entrepreneurs’ negotiation behavior. In a series of negotiation tasks, we compare persuasive behaviors and negotiation outcomes of entrepreneurs and non-entrepreneurs. Our results show that entrepreneurs make extensive use of emotions and arguments as means of persuasion. Due to their assertive behavior, they close fewer deals; however, when they close a deal, they make higher profits than non-entrepreneurs. These results demonstrate the relevance of studying entrepreneurs’ interpersonal interactions as determinants of entrepreneurial success and highlight the role expressed emotions and arguments play in this context.
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Notes
The authors explain this performance gap with experts’ greater process expertise and suggest that experts might not be immune to framing effects and cognitive biases. Their results do not allow for any conclusions on whether experts might be less susceptible to cognitive biases in their own domain where they are confronted with constraints specific to their profession (Neale and Northcraft 1986, p. 316).
Since we did not provide information on the total number of participants, beliefs about the chances of being chosen for the payment might have differed. The negotiation task would still be incentive compatible in this case, but the perceived strength of the incentive could have differed.
Further narrow traits that would be interesting to control for in future research include self-efficacy, stress tolerance and pro-activity. Due to time restrictions, we did not include items to measure these traits in the present study.
We first identified which role participants were assigned to and the values of their own and opponents’ reservation prices participants were assigned to in each scenario. For each entrepreneur with a specific parameter constellation, we randomly selected one non-entrepreneur who was confronted with the same parameters in this round.
Before running the regressions, we tested for differences in personality between the two groups. In line with previous research, we found that entrepreneurs have a more internal locus of control. We also found significant differences in neuroticism and openness (see Table 5 in the Appendix 1 for a summary of these results).
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Acknowledgments
We appreciate helpful comments and suggestions from Anna Abratis, Katrin Burmeister-Lamp, Philipp Koellinger, Christine Lauritzen, Maria Minniti, Mirjam van Praag, Christian D. Schade, Joeri Sol, Noam Wassermann and the participants at the ERIM research seminar at Erasmus University, the ACE research seminar in Amsterdam, the Humboldt Research Seminar on Entrepreneurship and Innovation Management and the Oxford Summer Residence Week for Entrepreneurship Scholars. We also wish to thank Joern Block and two anonymous reviewers for their feedback and suggestions on an earlier version of the paper.
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Artinger, S., Vulkan, N. & Shem-Tov, Y. Entrepreneurs’ negotiation behavior. Small Bus Econ 44, 737–757 (2015). https://doi.org/10.1007/s11187-014-9619-8
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DOI: https://doi.org/10.1007/s11187-014-9619-8