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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues
Jan 1, 2018

On the Relative Importance of Individual-Level Characteristics and Dyadic Interaction Effects in Negotiations: Variance Partitioning Evidence From a Twins Study


Negotiations are inherently dyadic. Negotiators’ individual-level characteristics may not only make them perform better or worse in general, but also may make them particularly well- or poorly-suited to negotiate with a particular counterpart. The present research estimates the extent to which performance in a distributive negotiation is affected by (1) the negotiators’ individual-level characteristics and (2) dyadic interaction effects that are defined by the unique pairings between the negotiators and their counterparts. Because negotiators cannot interact multiple times without carryover effects, we estimated the relative importance of these factors with a new methodology that used twin siblings as stand-ins for one another. Participants engaged in a series of one-on-one negotiations with counterparts while, elsewhere, their co-twins engaged in the same series of one-on-one negotiations with the co-twins of those counterparts. In these data, dyadic interaction effects explained more variation in negotiation economic outcomes than did individual differences, whereas individual differences explain more than twice as much of the variation in subjective negotiation outcomes than did dyadic interaction effects. These results suggest dyadic interaction effects represent an understudied area for future research, particularly with regard to the economic outcomes of negotiations.

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