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Reading your Counterpart: The Benefit of Emotion Recognition Accuracy for Effectiveness in Negotiation

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Abstract

Using meta-analysis, we find a consistent positive correlation between emotion recognition accuracy (ERA) and goal-oriented performance. However, this existing research relies primarily on subjective perceptions of performance. The current study tested the impact of ERA on objective performance in a mixed-motive buyer-seller negotiation exercise. Greater recognition of posed facial expressions predicted better objective outcomes for participants from Singapore playing the role of seller, both in terms of creating value and claiming a greater share for themselves. The present study is distinct from past research on the effects of individual differences on negotiation outcomes in that it uses a performance-based test rather than self-reported measure. These results add to evidence for the predictive validity of emotion recognition measures on practical outcomes.

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Notes

  1. We thank an anonymous reviewer for this point.

  2. The authors gratefully acknowledge Abigail Marsh’s contribution to this discussion.

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Acknowledgements

This research was supported by National Institute of Mental Health Behavioral Science Track Award for Rapid Transition 1R03MH071294-1. We thank Howard Friedman, three anonymous reviewers, and Abigail Marsh for their helpful comments.

Author information

Authors and Affiliations

  1. Organizational Behavior and Industrial Relations, Haas School of Business, University of California, Berkeley, CA, 94720-1900, USA

    Hillary Anger Elfenbein

  2. University of Colorado at Boulder, Boulder, CO, USA

    Maw Der Foo

  3. National University of Singapore, Singapore, Republic of Singapore

    Maw Der Foo, Hwee Hoon Tan & Voon Chuan Aik

  4. Dartmouth College, Hanover, NH, USA

    Judith White

Authors
  1. Hillary Anger Elfenbein
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  2. Maw Der Foo
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  3. Judith White
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  4. Hwee Hoon Tan
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  5. Voon Chuan Aik
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Corresponding author

Correspondence to Hillary Anger Elfenbein.

Appendices

Appendix 1

Schedule of negotiation exercise points

Decision

Value to Acme

Value to Gamma

Price

$10,000

$90,000

$0

$40,000

$60,000

$30,000

$70,000

$30,000

$60,000

$100,000

$0

$90,000

Delivery time

One week

$40,000

$40,000

Two weeks

$20,000

$20,000

Three weeks

$0

$0

Installation

Full installation

$40,000

$0

Limited installation

$20,000

$2,500

No installation

$0

$5,000

Payment time

One week

$0

$40,000

Two weeks

$2,500

$20,000

Three weeks

$5,000

$0

Appendix 2: Instructions for Negotiation Exercise

Version A: Sales Manager

In this exercise, you are a sales manager at a company called Gamma Industries.

Your goal is to negotiate the sale of a shipment of light bulbs to the Purchasing Manager at Acme Industries. These are not ordinary light bulbs, so you cannot sell them to most customers. As far as you know, Acme is one of only two customers to use this type of light bulb. You have already talked to the other possible customer, Peter Industries, and they are only willing to pay $10,000 for the shipment. You believe this is not enough money, and you are hopeful that you can sell them at a higher price to Acme Industries instead. You do not know how many other suppliers Acme Industries might have for these light bulbs.

You would like to sell the light bulbs to Acme Industries at the highest price possible. However, price is not your only consideration. You also care about the delivery time, installation, and payment time.

Delivery Time

You need to deliver the light bulbs as soon as possible. Your warehouses are full, and you need the storage space. The longer Acme waits for delivery of the light bulbs, the more costly it is for you because you will need to spend money renting additional storage space to hold the light bulbs.

Installation

You need to charge extra money if you will install the light bulbs for Acme Industries, because this is an extra expense for you to provide this service. You can provide Acme with a “Full installation” or “Limited installation” service, depending on how much they are willing to pay.

Payment Time

You would prefer for Acme to pay you in one week, so that you can use the money to pay your own suppliers as soon as possible. This is very important to you.

Although you believe it is preferable to reach an agreement with Acme Industries, it is not compulsory. If the deal with Peter Industries is a better alternative, then you can choose that instead. Peter Industries would buy the light bulbs for $10,000, with three weeks delivery time, full installation, and payment due in three weeks.

If you reach a deal with Acme Industries, then your score for this negotiation is as follows: [see Appendix 1 for schedule of points].

Version B: Purchasing Manager

In this exercise, you are a purchasing manager at a company called Acme Industries.

Your goal is to negotiate the purchase of a shipment of light bulbs from the Sales Manager at Gamma Industries. These are not ordinary light bulbs, so you cannot buy them from most stores. As far as you know, Gamma is one of only two suppliers with this type of light bulb available. You have already talked to the second supplier, Omega Industries, and they want $100,000 for the light bulbs. You believe this is too much money, and you are hopeful that you can pay a lower price to Gamma Industries instead. You do not know how many other customers Gamma Industries might have for these light bulbs.

You would like to buy the light bulbs from Gamma Industries at the lowest price possible. However, price is not your only consideration. You also care about the delivery time, installation, and payment time.

Delivery Time

You need the light bulbs as soon as possible. The longer Gamma waits to deliver the light bulbs, the more costly it is for you because you will need to spend money renting additional lighting equipment for temporary use in those rooms that need new light bulbs.

Installation

You would prefer that Gamma Industries installs the light bulbs for you, because you do not have enough staff members who are trained in the necessary safety procedures. If Gamma cannot provide you with their “Full installation” option, then the “Limited installation” would still be better than nothing. This is very important to you.

Payment Time

You would prefer to pay Gamma in three weeks, so you can keep the money earning interest in your accounts for as long as possible.

Although you believe it is preferable to reach an agreement with Gamma Industries, it is not compulsory. If the deal with Omega Industries is a better alternative, then you can choose that instead. Omega Industries would sell you the light bulbs for $100,000, with three weeks delivery time, no installation, and payment due in one week.

If you reach a deal with Gamma Industries, then your score for this negotiation is as follows: [see Appendix 1 for schedule of points].

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Elfenbein, H.A., Foo, M.D., White, J. et al. Reading your Counterpart: The Benefit of Emotion Recognition Accuracy for Effectiveness in Negotiation. J Nonverbal Behav 31, 205–223 (2007). https://doi.org/10.1007/s10919-007-0033-7

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