Journal of Business and Psychology

, Volume 19, Issue 1, pp 23–35 | Cite as

Determinants of a Negotiator's Initial Opening Offer

  • Marc Buelens
  • Dirk Van Poucke
Article

Abstract

Although the initial offer is a crucial aspect in the process of most negotiations, there is still a complete lack of empirical evidence on what underpins initial offer decisions. For this reason, the effects of different reference points on the negotiator's initial offer were examined in this study. Results from a sample of 596 managers indicate that knowledge of the opponent's best available alternative, or (Best Alternative To a Negotiated Agreement BATNA), is by far the strongest determinant. Criteria of fairness, as reflected in an estimated market price, are also important. However, awareness of the dependency of the other party has no direct effect on the initial offer. Apparently, negotiators define the negotiation game as the management of interdependency in an extremely egocentric way and base their opening offers largely on cues regarding the power structure within the dyad.

negotiation reference points initial offer power fairness 

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Copyright information

© Springer Science+Business Media, Inc. 2004

Authors and Affiliations

  • Marc Buelens
    • 1
  • Dirk Van Poucke
    • 2
  1. 1.Vlerick Leuven Gent Management SchoolGhent UniversityGhentBelgium
  2. 2.Ghent UniversityBelgium

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