Reference Context Selection In Buy-Sell Situation And Its Influence On Negotiation

The bargaining between buyers and sellers is ubiquitous in today's business society. Based on prospect theory and considering the gap between WTA and WTP appeared in experiments used good for resale, we proposed the concept of reference context. We examined the reference context preference and selection in buy-sell situation, and its influence on negotiators' perception and performance in buyer-seller negotiation. The reference context referred to the criteria or system used by decision makers to make sense of the current context. The difference between reference context and reference point was differenct reference points had same quality, while different reference contexts were of different quality. The current study contained two parts. In study 1, we examined the individual decision makers' reference context preference and selection in buy-sell situation by scenario questionnaire. Using simulated buyer-seller negotiation, we examined the influence of reference context selection on negotiators' perception and performance in study 2.In study 1, three experiments were designed. The results were found in experiment 1 that when good and money presented together, decision makers prefered money to good. Experiment 2 demonstrated that decision makers' preference of money to good is influenced by the way of presentation of money and good. When good and money presented separately, decision makers prefered good to money. The two sub-experiments of experiment 3 showed that decision makers steadily selected money as reference context in buy-sell situation, though influenced by the ownership of good. We named this phenomenon money salience in the current study.Study 2 contained five experiments. Experiment 1 showed that the selection of money as reference context in buyer-seller negotiation led the buyers' perceived bargaining zone after negotiation larger than sellers' perceived bargaining zone after negotiation. Experiment 2 reconfirmed this result and excluded the power explanation. Further, experiment 2 showd that even before negotiation, the perceived bargaining zone of buyers' was larger than that of sellers'. Experiment 3 confirmed that the influence of money as reference context on negotiators' performance was mediated by negotiators' perception. At the same time, alternative explanations of power difference and communication tactics were excluded together in experiment 3. Experimt 4 provieded control group. The structure of the two groups was identical, while the experimental group was described as "buyer-seller negotiation"; the control group was described as "barter". The result showed that negotiators' selection of money as reference context was not influenced by easiness for division and calculation of money. It was very possible that it was influenced by people's habit of money spending. Experiment 5, which was a sublimentary experiment, excluded the possible confounding caused by college students' lacking "selling" experience in experiment 1-experiment 4 by selecting office workers as subjects, and increased the generalizability of the current study.Finally, we summarized the verification of the main hypotheses, modified the theory framework according to the results of the empirical findings, and discussed the possible directions for future research.