Negotiating with your Values through Psychological Distance

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Negotiating with your Values through Psychological Distance

How hypothetical and informational distance influence negotiators’ value-behavior correspondence

Place, Date Cuijk, 23 January 2022

Name Harm Rutten

Student ID 13621238

Faculty UvA Economics and Business

Qualification MSc. in Business Administration – Consumer Marketing Track

Course Master Thesis Consumer Marketing

Course Code 6314M0374Y

Supervisor Dr. Alfred Zerres

Assignment Master Thesis

Version Final

EBEC Approval Codes 20211112011137 (Experiment 1) 20211124111132 (Experiment 2)

Word Count 15632

Pages 66

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2 STATEMENT OF ORIGINALITY

This document is written by Harm Rutten, who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document are original and that no sources other than those mentioned in the text and its references have been used in creating it.

UvA Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Previous research suggests that the available amount of information can be explained as another form of psychological distance (e.g., Fiedler, 2007; Wakslak et al., 2006). Therefore, these hypotheses are both based on the expectations from construal level theory (Eyal et al., 2009). The value-behavior correspondence of negotiators refers to the relationship between SVO and negotiation behavior. Previous studies have shown that negotiators’ strategic choices predominantly depend on their social value orientation (Messick & McClintock, 1968).

This relation exists, because negotiators’ social value orientation (SVO) represents their levels of self-concern and other concern, which has shown to strongly influence strategic decision- making (Pruitt, 1983; Pruitt & Rubin, 1986). In two online experiments, these value-behavior correspondence hypotheses are tested. The first experiment confirmed prior research on the effects of SVO on negotiation strategies but showed no evidence that hypothetical distance strengthens value-behavior correspondence in negotiators. Similarly, the second experiment found partial support for previous research on the effects of SVO on negotiation strategies and provided no evidence that informational distance strengthens negotiators’ value- behavior correspondence. However, it did find a direct positive effect of informational distance on the adoption of distributive strategies. Based on these findings, the theoretical and managerial implications are discussed. Lastly, some potential areas for future research are highlighted.

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1 INTRODUCTION

The 2021 United Nations climate change conference seemed to be the first climate conference in which all parties agreed to the elimination of coal power and fossil fuel subsidies (Michaelowa, 2021). However, at the very last moment India and China changed the Glasgow Climate Pact, such that the pact only stated a phase-down of coal power and fossil fuel subsidies instead of a phase-out (Michaelowa, 2021). The phase-down is more beneficial for India and China themselves, so these countries eventually chose personal gain over mutual benefit. How can it be that these parties initially agreed to a mutually beneficial agreement, but later changed their preference to a personally beneficial agreement? It might be a matter of psychological distance (Giacomantonio et al., 2010).

Psychological distance is defined as the extent to which individuals perceive to be removed from an object or event (Trope et al., 2007). Objects that are psychologically close are mentally represented in contextual and concrete terms, while psychologically distant objects are pictured in abstract and general terms (Trope et al., 2007). This indicates that people change the mental processes that they address to perceive a specific object, depending on the amount of psychological distance between themselves and the object (Trope & Liberman, 2012). Specifically, people change their focus on primary features or issues instead of secondary features or issues under psychological distance (Trope et al., 2007). This focus on primary issues causes people to focus more on their primary concerns, which are their inner values (Eyal et al., 2009; Torelli & Kaikati, 2009).

Therefore, psychological distance influences the prominence of one of the main determinants of negotiators’ strategic behavior (Pruitt, 1983; Pruitt & Rubin, 1986). Research namely shows that negotiators’ strategic behavior is mainly determined by their levels of self-concern and other concern (Pruitt, 1983). These concerns are represented in negotiators social value orientation, which is an individual difference factor that reflects people’s social values, like altruism, cooperation, individualism or competition (Liebrand & McClintock, 1988).

Specifically, the social value orientation (SVO) represents people’s preference about a resource allocation between themselves and others (Messick & McClintock, 1968). The relation between SVO and strategic negotiation behavior indicates that some value-behavior correspondence exists in negotiators. Particularly, proself negotiators try to claim as much

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7 resources as possible for themselves, while prosocial negotiators aim to maximize joint value (de Dreu & van Lange, 1995). Therefore, the present paper suggests that negotiators’ SVOs are important determinants in their strategic decision-making.

Moreover, the current research proposes that psychological distance strengthens this value-correspondence relationship of negotiators. CLT states that people base their decisions more on primary features of objects rather than secondary features under psychological distance (Todorov et al., 2007). This causes people to construe their own behavior more abstractly under psychological distance (Trope et al., 2007). In turn, this increased mental abstraction encourages people to include their values in behavioral decisions, because these values are activated through abstract thinking (Eyal et al., 2009; Torrelli & Kaikati, 2009).

Therefore, it can be reasonably expected that psychological distance strengthens the value- behavior correspondence in negotiators.

One of the dimensions of psychological distance is hypothetical distance (Wakslak et al., 2006). Hypothetical distance refers to the perceived likelihood that an event will occur, where very probable events are considered as hypothetically close and almost impossible events as hypothetically distant (Wakslak et al., 2006). Researching the effects of hypothetical distance on the value-behavior correspondence in negotiators is especially relevant because negotiators’ decisions depend on how probable they perceive a successful negotiated agreement to be (Kihlstrom & Roth, 1982). This means that hypothetical distance should be very relevant in negotiations and should have prominent effects on the value-behavior correspondence of negotiators. Therefore, the following research question is stated:

How does hypothetical distance influence the relationship between social value orientation and negotiation strategies?

On top of this research question, this paper will also investigate a second research question.

Specifically, this study is focused on revealing the effects of informational distance on the relationship between SVOs and negotiation strategies. Informational distance is defined as the extent to which information is available to people (Fiedler, 2007). Prior research suggests that informational distance has similar effects as other dimensions of psychological distance.

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8 Particularly, research proposes that the presence of information induces people to construe objects concretely, while a lack of information prompts people to construe objects abstractly (Fukukura et al., 2013; Wakslak et al., 2006). The explanation for this effect is that people experience less stress under informational distance, which reduces their attention selectivity (Chajut & Algom, 2003). This reduced attention selectivity allows people to take more into consideration than only task-specific attributes and thus induces more abstract thinking. This abstract thinking, in turn, increases the influence of values in behavioral decisions (Eyal et al., 2009; Torelli & Kaikati, 2009). Therefore, informational distance should also strengthen the value-behavior correspondence in negotiators.

Analyzing the effects of information on the relationship between SVO and negotiation strategies is especially relevant in a negotiation context because information is the main tool of negotiators to influence the cognitions and behavior of the opposing party (Thompson, 1991). Therefore, researching the effects of information on the relation between SVO and negotiation strategies is needed to fully understand the dynamics of negotiations. This results in the following research question:

How does informational distance influence the relationship between social value orientation and negotiation strategies?

Answering these research questions will result in an academic contribution that is twofold.

First, it will explain how hypothetical and informational distance alter the value-behavior correspondence of negotiators. Specifically, it shows how hypothetical and informational distance influence the effects that negotiators’ SVOs have on their strategic decisions.

Second, it provides insights into the role of informational distance in the overall psychological distance construct.

Moreover, the study has some practical implications for negotiators as well.

Specifically, it shows how negotiators can predict strategies of the opposing party by demonstrating the relationships between SVO, hypothetical and informational distance and negotiation strategies. Furthermore, it illustrates how negotiators can strategically apply hypothetical and informational distance to negotiators with differing SVOs, such that they influence the strategic choices of those negotiators.

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2 THEORY

This section synthesizes extant literature about negotiation strategies, dual concern theory, and construal level theory.

2.1 NEGOTIATION STRATEGIES

Negotiations are procedures for resolving opposing preferences between two or more parties (Carnevale & Pruitt, 1992). It involves interaction between the parties, with the goal of reaching an agreement (Carnevale & Pruitt, 1992). Generally, negotiators strive to reach a negotiation outcome in which they satisfy as much of their preferences as possible. The outcome potential that can be reached by the negotiators depends on the concerns and priorities of each party (Brett & Thompson, 2016). The extent to which this outcome potential is captured by the negotiators and how much value they leave on the table, in turn, is determined by the strategies of the negotiators (Brett & Thompson, 2016). Therefore, negotiators’ strategies are extremely important determinants for the ultimate negotiation outcome.

Negotiation strategies can be defined as the goal directed behaviors that negotiators utilize to reach an agreement (Weingart et al., 1990). Negotiation scholars generally distinguish between two types of negotiation strategies, distributive and integrative strategies (Walton & McKersie, 1965). Negotiators with distributive strategies are focused on claiming as much value as possible for themselves (Walton & McKersie, 1965). On the other hand, negotiators with integrative strategies are not only focused on claiming value for themselves, but also on creating value for mutual benefit (Walton & McKersie, 1965). Therefore, negotiators that adopt distributive strategies often fail to recognize manners in which they could create more value in the negotiation outcome, while negotiators with integrative strategies do recognize these opportunities (Brett & Thompson, 2016)

Negotiation literature describes multiple distributive negotiation strategies, such as take-it- or-leave-it, objective standards, first offer bargaining and hardline bargaining. The take-it-or- leave-it strategy refers to a negotiation strategy in which negotiators propose an offer that is framed as an ultimatum (Harnett & Cummings, 1980). The goal of this strategy is to induce concessions of the opposing party by giving them the impression that further negotiation is

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10 not possible. Next, the objective standards strategy refers to a behavior in which negotiators compare their offer to an objective measure, to justify the fairness of the offer (Fisher et al., 2011). This strategy tries to influence the opposing negotiators to make concessions, by creating the feeling that the current offer is fair when measured along objective standards (Fisher et al., 2011). Third, the first offer strategy refers to a negotiation strategy that involves influencing opposing negotiators through the first offer in the negotiation. The first offer in a negotiation serves as an anchor around which the further negotiation process revolves (Strack

& Mussweiler, 1997; Galinsky & Mussweiler, 2001). For instance, when negotiators provide a high offer, knowledge that is consistent with high prices is selectively made more accessible in negotiators’ minds (Mussweiler & Strack, 2000). Therefore, negotiators can influence the opposing party by providing a reference point for the negotiation (Galinsky & Mussweiler, 2001). Lastly, hardline bargaining is a strategy that is similar to first offer bargaining and refers to behaviors in which negotiators make extreme first offers and refrain from making concessions (Hüffmeier et al., 2014). Therefore, this strategy also utilizes anchoring as an approach to influence the opposing party (Hüffmeier et al., 2014). This indicates that the aim of this strategy is also capturing as much value as possible, by inducing concessions from the other party toward the extreme anchor (Hüffmeier et al., 2014).

These examples of distributive negotiation strategies show that although distributive strategies can take different forms, all these strategies have one common objective. This common goal of distributive strategies is to provoke concession from the other parties, while minimizing one’s own concessions (Walton & McKersie, 1965). Specifically, distributive strategies are aimed at influencing the opposing parties, to make concession toward the desired outcome of the focal negotiator, whether it is through ultimatums, comparisons or anchors (Walton & McKersie, 1965). This illustrates that distributive negotiators perceive negotiations as a competition in which only one party wins, and the other parties lose (Walton

& McKersie, 1965). It shows that distributive negotiators see the outcome potential of negotiations as a fixed pie that must be distributed between the parties (Fisher et al., 2011).

This is the reason that negotiators with distributive strategies focus solely on claiming value for themselves.

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11 Similarly, negotiation literature describes several integrative negotiation strategies, such as logrolling, explicit information exchange, implicit information exchange and heuristic trial and error. One of the most prominent integrative negotiation strategies is logrolling. Logrolling involves making tradeoffs between more important and less important issues in the negotiation (Pruitt & Rubin, 1986). In logrolling, negotiators evaluate which issues are their primary concerns and which issues are their secondary concerns (Pruitt & Rubin, 1986). Then, these negotiators concede on their secondary issues, in exchange for getting their way on primary issues (Pruitt & Rubin, 1986). The goal of this logrolling strategy is to maximize both individual and joint benefits (Pruitt & Rubin, 1986). Next, explicit information exchange is a strategy in which negotiators engage in series of questions and answers with the opposing negotiators, to create insights into each other’s concerns and priorities (Thompson, 1991).

These insights, in turn, are used to generate value for both the focal negotiator as well as the opposing party (Thompson, 1991). Implicit information exchange is very similar to the explicit information exchange strategy. However, instead of engaging in an explicit question and answer interaction, negotiators reveal their concerns and priorities through their offers and arguments (Pruitt, 1981). Again, these insights are then utilized to create joint benefits (Pruitt, 1981). However, research shows that there are cultural differences in the ease with which people recognize these implicit cues, which means that there are differences in the extent to which this strategy creates value (Adair et al., 2001). Finally, negotiators that adopt a heuristic trial and error strategy propose multiple offers that meet their highest objectives, and the negotiators only lower their ambitions when the opposing party denies all these offers (Pruitt, 1981).

These examples of integrative negotiation strategies illustrate that integrative strategies have different modes, but also that they all have the same objective. Integrative strategies are focused on creating as much joint benefits as possible (Walton & McKersie, 1965). Specifically, integrative strategies attempt to create an open information exchange, in which negotiators share all their concerns and priorities (Walton & McKersie, 1965). This open information exchange allows negotiators to cooperate and reach agreements that maximize gains for all parties (Thompson, 1991). Furthermore, it shows that negotiators with integrative strategies perceive the negotiation outcome as a pie that can be expanded to create additional value for both parties (Fisher et al., 2011). Therefore, these negotiators realize that

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12 more benefits can be reached by cooperating (Brett & Thompson, 2016). This perception on the negotiation process explains why these negotiators focus both on creating and claiming value.

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2.2 DUAL CONCERN MODEL

The previous section describes how negotiators’ concerns and priorities determine the outcome potential of negotiations (Brett & Thompson, 2016). Moreover, it showed how negotiators adopt different types of strategies to capture the outcome potential (Brett &

Thompson, 2016). How negotiators decide about particular strategies, depends on the internal motivations of these negotiators (de Dreu, 2004). Therefore, much negotiation research has focused on explaining how negotiators’ internal motivations influence their strategic decisions (de Dreu, 2004).

Initially, scholars assumed that negotiators were solely motivated to satisfy their own desires. However, further research into negotiations showed that most people are also motivated by other factors in choosing their negotiation strategies. For instance, Kelley and Thibaut (1978) showed that people are also motivated to satisfy the desires and concerns of other people than themselves. Furthermore, other research demonstrated that some people strive toward equality of outcomes in negotiations (Deutsch, 1975). These examples illustrate that people are not solely focused on their own outcomes in negotiations, but that they also regard the outcomes of other people. This proves that some kind of social motive must be taken into account when explaining how internal motivations influence negotiators’ strategic decisions (Kelley & Thibaut, 1978). Therefore, further research tried to explain strategic decision-making of negotiators based on both selfish motives and social motives. One of the most influential research streams in this area has been the work on dual concern theory (Pruitt, 1983).

The dual concern model describes how negotiators are motivated to make strategic decisions based on two factors, self-concern and other concern (Pruitt, 1983). Specifically, the model states that strategic decisions of negotiators are based on how much concern they have for their own outcomes and how much concern they have for the outcomes of the other party (Pruitt, 1983). When negotiators are predominantly concerned with their own outcomes, they are expected to adopt a contending or distributive approach toward negotiations (Pruitt, 1983). Conversely, when negotiators are concerned with both their own outcomes and the outcomes of others, they are expected to adopt a problem-solving or integrative approach toward negotiations (Pruitt, 1983).

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14 The dual concern model proposes that the level of self-concern that negotiators feel is influenced by several factors (Pruitt, 1983). First, the importance of the outcomes to negotiators has a significant influence on the concern about them (Pruitt, 1983). When outcomes are more important to negotiators, the negotiators will have a stronger motivation to achieve those outcomes and they will display greater concern for them (Pruitt, 1983).

Second, negotiators’ self-concern is increased when negotiators’ aspirations become closer to their ultimate goal (Kelley et al., 1967). This means that when negotiators are closer to their objective, they will be more motivated to achieve that goal. Lastly, self-concern is increased when negotiators are bargaining with people that they distrust, because this distrust diminishes their willingness to cooperate with those people (Fry et al., 1979).

Negotiators’ level of other concern is also influenced by multiple factors (Pruitt, 1983).

First, other concern is increased when the focal negotiator has some level of interpersonal attraction to the other negotiator (Clark & Mills, 1979). This interpersonal attraction increases people’s willingness to cooperate, because it creates genuine concern about the welfare of the other (Clark & Mills, 1979). Similarly, when negotiators feel that the other negotiator shares some common group identity with them, other concern is increased as well (Hatton, 1967).

Last, other concern is improved when negotiators have a general positive mood (Isen & Levin, 1972). This positive mood will increase their cooperative behavior, because helping others will increase their positive mood even more (Andreoni, 1989).

Concern for own outcomes

Low High

Concern for others’ outcomesLowHigh

Avoiding

Compromising

Competing Accommodating Collaborating

Figure 1 : Dual-concern model (Pruitt & Rubin, 1986)

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15 However, research discovered that even when all these situational factors are held constant, people still differ in the amount of self-concern and other concern they experience (Messick

& McClintock, 1968). This implies that besides these situational factors, an individual difference factor exists that also influences the levels of self-concern and other concern of negotiators (Liebrand & McClintock, 1988). Messick and McClintock (1968) called this individual difference variable the social value orientation.

The authors called this variable the social value orientation (SVO) because it illustrates the social values, like altruism, cooperation, competition or individualism, that peoples use in situations where interdependence exists between the focal person and other people (McClintock, 1972; Liebrand & McClintock, 1988). SVO was first described in literature by Messick and McClintock (1968), who developed a theory for the motivational basis of strategic choices. These authors showed that people have different preferences about resource allocations between themselves and other people depending on their motivational orientation (Messick & McClintock, 1968). Put differently, they found that individuals’ levels of self-concern and other concern are influenced by their motivational orientation. Therefore, SVO is a representation of the two concerns that form the basis for negotiators’ strategic decisions.

Messick and McClintock (1968) distinguished between four general orientations in SVOs. Specifically, the authors assumed that people are in either one of four motivational orientations: individualistic, competitive, cooperative or indifferent. Negotiators with an individualistic orientation base their strategic decisions on the goal of maximizing their own gains (Messick & McClintock, 1968). Competitive negotiators strive toward a maximization of their gains relative to the gains of the other negotiators and make their decisions accordingly (Messick & McClintock, 1968). Next, cooperative negotiators have the goal of maximizing both their own outcomes and the outcomes of others, so they try to achieve joint gain maximization (Messick & McClintock, 1968). Lastly, indifferent negotiators are not motivated by anything to make strategic choices, so these negotiators make their decisions randomly (Messick & McClintock, 1968). Later, McClintock (1972) added the altruistic orientation to their motivational theory of choice behavior. Negotiators with an altruistic orientation base their strategic choices solely on the goal of maximizing others’ gains (McClintock, 1972).

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16 Depending on these five motivational orientations, individual negotiators evaluate outcomes differently and hence have different preferences about strategic decisions (McClintock, 1972).

Another categorization of SVO that is often used in literature is the prosocial versus proself orientation (de Dreu & van Lange, 1995). Negotiators with a proself orientation are focused on maximizing their own outcomes, with no or negative regard for the outcomes of others (de Dreu & van Lange, 1995). Therefore, individualistic and competitive negotiators belong to the proself negotiators. On the other hand, prosocial negotiators are focused on maximizing joint outcomes and creating value for both themselves and for others (de Dreu & van Lange, 1995).

Therefore, cooperators and altruists belong to the prosocial negotiators.

In 1973, Griesinger and Livingston proposed a geometric model to display people’s SVOs. This model depicts people SVOs as the ratio of the weights that people attach to their own outcomes and to other people’s outcomes (Griesinger & Livingston, 1973). This model shows that SVOs can take an infinite number of variations. Therefore, this model proved that SVO is an individual difference variable, which takes a distinct value for every individual person.

2.2.1 SVO AND NEGOTIATION STRATEGY

Previous research has already shown that negotiators’ SVOs influence their cognition and behavior in negotiations. Specifically, prosocial negotiators are found to have lower demands and greater feelings of fairness than proself negotiators (de Dreu & van Lange, 1995).

Moreover, prosocial negotiators are found to focus on preserving the relationship with the opposing negotiator rather than focusing on the negotiation task at hand (Olekalns & Smith, 1999). Conversely, proself negotiators are found to be concerned with the negotiation itself and the potential outcomes of that negotiation only (Olekalns & Smith, 1999). Furthermore, proself negotiators are less inclined to make concessions (de Dreu & van Lange, 1995). Lastly, proselfs seem to focus on dividing resources between the parties rather than on building rapport with the opposing negotiator (Olekalns & Smith, 2003).

These previous studies show that negotiators’ cognition and behavior during negotiations depends on their SVOs. Specifically, this research demonstrates that prosocial negotiators have more integrative tendencies than proself negotiators, while proself

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17 negotiators have more distributive tendencies than prosocial negotiators (de Dreu & van Lange, 1995). This means that negotiators who are predominantly concerned with themselves are also occupied with claiming value for themselves, while negotiators who are concerned with both themselves and others are trying to create joint value maximization (Messick &

McClintock, 1968). These findings are exactly in line with the predictions from dual concern theory (Pruitt, 1983; Pruitt & Rubin, 1986). Therefore, these studies demonstrate that negotiators’ behavior corresponds with the SVO that these negotiators adhere to.

One potential explanation for this value-behavior correspondence in negotiators could be the false consensus bias (van Kleef & de Dreu, 2002). The false consensus bias states that people judge their own values and behaviors as more common than alternative values or behaviors (Ross et al., 1977). Therefore, when no information indicates otherwise, people assume that others adhere to the same values as themselves (Ross et al., 1977). Van Kleef and de Dreu (2002) show that negotiators indeed make assumptions about the SVOs of other negotiators based on their own SVO. Therefore, negotiators with a prosocial SVO assume that other negotiators are prosocial as well, while proself negotiators assume that others have proself SVOs (van Kleef & de Dreu, 2002). This means that prosocial negotiators expect other negotiators to adopt more integrative strategies, while proself negotiators expect others to adopt more distributive strategies. Therefore, negotiators anticipate upon the expected actions of the opposing party and respond with a strategic approach that they deem appropriate, which is the approach that is based on their own SVO (van Kleef & de Dreu, 2002). This leads up to the first hypothesis:

H1: Negotiators’ social value orientation influences the choice of negotiation strategies, such that prosocials adopt more integrative strategies, while proselfs adopt more distributive strategies.

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2.3 CONSTRUAL LEVEL THEORY

The previous section posits the existence of a value-behavior correspondence in negotiators.

Specifically, it shows how negotiators’ SVOs influence their strategic decisions. Prior research has demonstrated that negotiators’ perceptions play a crucial role in the cognition and behavior of negotiators (Thompson & Hastie, 1990). Therefore, negotiators’ perceptions should have an influence on the value-behavior correspondence in negotiators (Giacomantonio et al., 2010). Specifically, research has shown that psychological distance and negotiators’ construal level influence this value-behavior relationship (Giacomantonio et al., 2010).

Construal level theory (CLT) was introduced into social psychology literature by psychologists Yaacov Trope and Nira Liberman in 2003. Initially, CLT was developed to explain how people’s responses to events change as they get closer in time to engaging in those events (Trope & Liberman, 2003). The authors proposed that distance in time alters people’s responses to future activities by consistently changing the manner in which people imagine these activities (Trope & Liberman, 2003). Specifically, the authors state that people represent an activity more abstractly in their mind when it is further away in time rather than close in time (Trope & Liberman, 2003). For instance, people could think about their graduation ceremony a year from now or tomorrow. If people imagine their graduation ceremony taking place in a year, they might think about it being the end of their academic career and it being a very memorable moment. However, if people think about their graduation ceremony taking place tomorrow, they might consider what they are going to wear and what they want to say during the ceremony.

However, Trope and Liberman (2003) also recognized that time is not the only factor that influences the way people construe activities. For instance, distance in space, social connection or distance from reality are presumed to have similar effects on people’s responses to events (Trope & Liberman, 2003). Therefore, the authors propose that the same principles hold for various dimensions of distance and generalize their theory to incorporate multiple types of distance, to what Lewin (1951) defined as psychological distance.

Psychological distance is the extent to which individuals perceive to be removed from an object or phenomenon (Trope et al., 2007). This psychological distance exists, because people evaluate other entities from an anchor point, which is their direct experience (Liberman

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19 et al., 2007). Anything that is not part of people’s direct experience, is an element of their mental representation (Liberman et al., 2007). This implies that the experience of distance toward an entity is related to the mental representation of that entity (Liberman et al., 2007).

Therefore, psychological distance between the focal person and another object increases the level of abstraction with which that object is represented in the mind of the focal person (Trope et al., 2007). Consequently, the closer people judge an object to be to their immediate environment, the more concretely they construe that object (Trope et al., 2007). For instance, people could think about building a windmill park in their own village or somewhere across the country. When people imagine that a windmill park is built in their own village, they might think about that it is going to create excessive noise and that it will ruin their view. However, when people think about a windmill park being built somewhere else, they might only consider the benefits that it will have for the climate.

This relationship between psychological distance and mental representation implies that people address different mental processes to evaluate or decide about distant activities and close activities (Trope & Liberman, 2003). Specifically, the authors propose that central mental processes are used to evaluate distant events, while peripheral processes are utilized to evaluate near events (Trope & Liberman, 2012). These distinct mental processes result in different mental representations about the event (Trope & Liberman, 2012). The authors distinguish between two levels of mental representation that exist because of people’s response to psychological distance, called high-level and low-level construal (Trope et al., 2007). High-level construal entails only the broad and abstract features of concepts, so that it incorporates the essence of the concepts (Trope & Liberman, 2003). On the other hand, low- level construal consists of a more detailed description of concepts, with more attention for contextual elements than the big picture (Trope & Liberman, 2003). CLT states that evaluations and decisions regarding psychologically distant activities are based on high-level construal, while decisions about psychologically close activities are rooted in low-level construal (Trope et al., 2007). For example, people could decide to go on a vacation six months ahead of time or they could also decide to go only last minute. When people decide on their vacation six months in advance, they might base their destination choice on the beauty of the location or on the tourist attractions that can be visited. Conversely, when

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20 people decide on their vacation last minute, they might base their destination choice also on the current weather conditions there or whether the location is easily reachable by public transport.

Not only does psychological distance influence construal level, but construal level can also influence people’s experience of psychological distance (Trope et al., 2007). Specifically, low- level construal creates experiences of a small distance, while high-level construal generates experiences of a large distance (Trope & Liberman, 2003). Therefore, the more abstractly something is represented in someone’s mind, the more distance that people experience. For instance, people could describe another person’s face either in great detail or somewhat vaguely. When people have a clear mental image of someone’s face, they might already feel a social connection with that person, without having met that person. However, when people cannot imagine someone’s face, they might still feel like that person is a stranger to them.

This relationship between psychological distance and mental construal could possibly be explained by the role of knowledge in the experience of distance (Wakslak et al., 2006).

When an object is in the direct experience of people, they receive much information about that object through their sensory impulses (Bar-Anan et al., 2006). This allows people to construe the object in a contextual manner. However, when that object is removed from the direct experience, people rely on their mental image of that object to represent it (Bar-Anan et al., 2006). Therefore, people cannot collect information through their senses, so much less knowledge is available to create a mental image. This lack of knowledge limits people in the representation of the object (Wakslak et al., 2006). For example, when people think about pizza, they usually can imagine what a pizza looks like and describe its general features, but its smell is very hard to imagine. However, when people have an actual pizza in front of them, they can rely on their senses to create a more detailed mental image of that pizza, also incorporating its scent. This means that people’s construal level is the result of the limited availability of knowledge about an object due to its removal from the direct experience (Wakslak et al., 2006).

As mentioned, psychological distance is a multilateral concept, meaning that it contains a variety of dimensions (Trope & Liberman, 2003). However, the most common defined

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21 dimensions are distance in time, distance in space, social distance and distance from reality (Bar-Anan et al., 2006). Together, these four dimensions compose the most important aspects of psychological distance (Bar-Anan et al., 2006).

Distance in time, or temporal distance, refers to the extent to which events are removed from the present (Trope & Liberman, 2003). Events are temporally close when they are near the present, like tomorrow, and events are temporally distant when they are far from the present, such as next year (Trope & Liberman, 2003). Distance in space, also called spatial distance, refers to the physical distance between the focal person and another object (Trope et al., 2007). Objects are spatially close when they are located near the focal person, e.g., across the street (Trope et al., 2007). Conversely, objects are spatially distant when they are located far from the focal person, like across the continent (Trope et al., 2007). Social distance refers to the distance in personal relationship or resemblance to the self (Trope et al., 2007).

People are socially close to the focal person when there is a personal relationship with them or when they are very similar in appearance and character to the focal person (Trope et al., 2007). People are socially distant from the focal person when no personal relationship with them exists or when they do not resemble the focal person at all (Trope et al., 2007). Lastly, distance from reality, or hypothetical distance, refers to the distance in probability of events occurring (Wakslak et al., 2006). Events are hypothetically close when they are certain to happen, but events are hypothetically distant when they are almost impossible to happen (Wakslak et al., 2006).

Although these dimensions of psychological distance are acknowledged as separate entities, they are in fact closely associated with one another (Trope & Liberman, 2012;

Liberman & Trope, 2014). The reason for this interrelation is that the same process of abstraction underlies all these different aspects of psychological distance (Liberman & Trope, 2014). Therefore, a more abstract mental representation of an object increases multiple types of distance simultaneously (Liberman & Trope, 2014).

2.3.1 HYPOTHETICAL DISTANCE

As mentioned, hypothetical distance is a specific dimension of psychological distance that refers to the probability of events occurring (Wakslak et al., 2006). People perceive certain events as closer to the direct experience than uncertain events (Wakslak et al., 2006).

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22 Therefore, people treat certain events differently from uncertain events. Specifically, people treat certain events as if they are already part of their direct experience (Wakslak et al., 2006).

This encourages people to use concrete mental processes instead of abstract processes to evaluate them (Wakslak et al., 2006). Conversely, people treat uncertain events as if they are not part of their direct environment, which motivates them to use abstract mental processes to assess them (Wakslak et al., 2006). For instance, when people that live in safe neighborhoods are asked to think about burglaries and the probability of being robbed is low, they might think about how crime should be prevented in society. However, when people that live in unsafe neighborhoods are asked to think about burglaries, they might think about how they are going to secure their own house against robbers.

This example shows how the probability of an event occurring can change the construal level at which people think (Wakslak et al., 2006). As hypothetical distance causes people to construe events at different levels, it also has important implications for how people make decisions. The likelihood of an outcome influences how the decision maker weighs its attributes (Todorov et al., 2007). Therefore, decision makers could have differing preferences between outcomes depending on the level of hypothetical distance (Todorov et al., 2007).

According to the principles of CLT, decision makers will give higher weights to the primary aspects of an outcome under great hypothetical distance, while more weight will be given to secondary features under low hypothetical distance. This could result in preference reversals between multiple options, by only varying the hypothetical distance towards the outcomes (Todorov et al., 2007).

For instance, when people are confronted with a choice between two jobs, their preferences could change depending on the probability that they will get either one of the jobs. Suppose that the first job includes a monthly salary of $5.000 and requires you to work 50 hours per week. The second job provides a monthly salary of only $3.000, but also only demands 30 working hours per week. When it is very unlikely that you get either one of these jobs, you are expected to only consider the primary outcome of the job, i.e., the salary (Todorov et al., 2007). Therefore, people will prefer the first job under high hypothetical distance. On the other hand, when it is very likely that you get either one of the jobs, you are expected to consider both the primary outcome and the secondary outcome of the job, i.e., the working hours (Todorov et al., 2007). This might result in some people switching

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23 preferences from the first job to the second job, because they also value their work-life balance. This example shows how the probability with which an outcome occurs can alter how people weigh the attributes of the outcome, which eventually changes the perceived value of the outcome (Todorov et al., 2007). This effect can be of great importance in negotiators’

strategic choices because these strategic decisions depend on their primary values and motivations (Messick & McClintock, 1968).

2.3.2 PSYCHOLOGICAL DISTANCE IN NEGOTIATION

Negotiation literature has explored the effects of several dimensions of psychological distance already. For instance, temporal distance is found to increase negotiators’

preferences for more integrative negotiation agreements (Henderson et al., 2006). Moreover, temporal distance increased negotiators’ tendencies to engage in logrolling behavior and their tendency to adopt problem-solving behaviors (Henderson et al., 2006; de Dreu et al., 2009). Similarly, spatial distance was found to increase negotiators’ capabilities to achieve integrative agreements (Henderson, 2011).

Agerström and Björklund (2009) provide a potential explanation for this increased prosocial behavior due to psychological distance. These authors suggest that moral values are represented at an abstract level in the mind, while selfish motivations are represented at a concrete level (Agerström & Björklund, 2009). Therefore, high psychological distance induces negotiators to consider moral values in their strategic decision-making, which increases the other concern of these negotiators (Agerström & Björklund, 2009). On the other hand, low psychological distance induces negotiators to think only about themselves, which increases the self-concern of negotiators (Agerström & Björklund, 2009). Therefore, this stream of research predicts that high psychological distance increases the adoption of integrative strategies in negotiators, while low distance increases the adoption of distributive strategies.

2.3.3 STRENGTHENING EFFECT OF HYPOTHETICAL DISTANCE

As previously explained, much research on the relationship between psychological distance and negotiation strategies finds that psychological distance increases negotiators’

preferences for adopting integrative strategies (e.g., de Dreu et al., 2009; Henderson et al.,

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24 2006; Henderson, 2011). These studies propose that psychological distance increases negotiators capabilities to think about their moral values, which makes them more prosocial in their behavior (Agerström & Björklund, 2009). However, further studies suggest that this relationship between psychological distance and negotiation strategies is too simplistic.

Giacomantonio et al. (2010) demonstrate that psychological distance influences the value- behavior correspondence in negotiators. Specifically, these authors show that the relationship between SVO and negotiation strategies is strengthened by psychological distance (Giacomantonio et al., 2010). This means that prosocial negotiators adopt even more integrative strategies under psychological distance (Giacomantonio et al., 2010). Similarly, proself negotiators adopt even more distributive strategies under psychological distance (Giacomantonio et al., 2010).

The explanation for this strengthening effect of psychological distance on social value orientation lies within CLT. Particularly, research shows that values have a greater influence on behavioral decisions under psychological distance, because values are abstract psychological concepts that are activated under great psychological distance (Eyal et al., 2009; Torelli & Kaikati, 2009). Therefore, the influence of SVOs on behavior should also be affected by psychological distance, because SVOs represent people’s social values (McClintock, 1972; Liebrand & McClintock, 1988).

According to CLT, people base their decisions more on primary features rather than secondary features under hypothetical distance (Todorov et al., 2007). Therefore, people focus more on primary features when making decisions about their own behavior in hypothetically distant scenarios. This focus on primary features leads to a more abstract mental representation of the behavior (Trope et al., 2007). This abstract mental representation of the behavior, in turn, induces people to consider their values in their behavior, because these values are activated through abstract thinking (Eyal et al., 2009; Torelli & Kaikati, 2009).

Therefore, values play a bigger role in behavioral decisions when hypothetical distance is high. For instance, when it is almost certain that people have to tell something embarrassing about themselves, most people will not be willing to tell it. People will be thinking on a contextual level and might think about the stress that telling this embarrassing moment will give them. However, when it is very unlikely that people have to tell something embarrassing about themselves, it might emphasize the moral value of honesty in their minds, because this

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25 distance encourages abstract thinking. Therefore, people might be more willing to tell something embarrassing about themselves when hypothetical distance is great rather than small.

In conclusion, hypothetical distance causes people to construe their own behavior more abstractly (Trope et al., 2007). This increased mental abstraction encourages people to include values in their behavioral decisions, because values are activated through abstract thinking (Eyal et al., 2009; Torelli & Kaikati, 2009). Therefore, negotiators should be more likely to use social values in creating their behavior under hypothetical distance. This leads to the following hypothesis:

H²: Hypothetical distance strengthens the influence of social value orientation on behavior, such that prosocials adopt even more integrative strategies under hypothetical distance and proselfs adopt even more distributive strategies under hypothetical distance.

2.3.4 INFORMATIONAL DISTANCE

Besides hypothetical distance, it is also relevant to investigate the effects of informational distance in negotiations, because information is the main tool that negotiators possess to influence the cognition and behavior of the opposing party (Thompson, 1991). Research already shows that the manner in which negotiators provide or seek information can significantly influence the outcome of the negotiation (Thompson, 1991). Moreover, previous research has also shown that an interesting dynamic exists between information and psychological distance (Wakslak et al., 2006). Therefore, the current paper attempts to explain the role of information in negotiations as another form of psychological distance. It adopts a conceptualization of information that is derived from psychological distance research.

Specifically, the extent to which information is available to people is defined as informational distance, as proposed by Fiedler (2007). Objects about which much information is available are considered informationally close (Fiedler, 2007). Conversely, objects about which little or no information is available are said to be informationally distant (Fiedler, 2007).

Several studies, including Fiedler (2007), Fukukura et al. (2013) and Wakslak et al.

(2006), propose that information decreases people’s construal level and that absence of

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26 information, i.e., informational distance, increases their construal level. This indicates that informational distance creates similar effects on people’s perception as temporal, spatial, social and hypothetical distance. Therefore, Fiedler (2007) states that informational distance is another dimension of the overall psychological distance construct.

This proposition from Fiedler (2007) is substantiated by other research. Particularly, Wakslak et al. (2006) suggest that informational distance might have relationships with people’s construal level. The authors suggest that when people have much information about an object, so that informational distance is low, people construe that object more contextually (Wakslak et al., 2006). On the other hand, when people have little information about an object, such that informational distance is high, people represent that object more abstractly (Wakslak et al., 2006). This implies that informational distance creates similar effects on people’s construal levels as other dimensions of psychological distance. Therefore, this research confirms the proposition that informational distance is another dimension of psychological distance.

Similarly, Fukukura et al. (2013) also propose that information decreases people’s construal level. These authors state that using psychological distance in low informational distance situations positively influences people’s decision-making (Fukukura et al., 2013).

Specifically, the abstract mental processes that are activated by psychological distance increase people’s capabilities to extract the essence from an abundance of information (Fukukura et al., 2013). Therefore, the usage of psychological distance is beneficial for people in low informational distance situations (Fukukura et al., 2013). This implies that people approach low informational distance situations with a low-level construal (Fukukura et al., 2013). So, low informational distance induces low-level construal, while high informational distance encourages high-level construal. This implies that informational distance has similar effects on people’s construal level as other dimensions of psychological distance. Therefore, this research also substantiates the proposition that informational distance is another dimension of psychological distance.

Thus, multiple studies suggest that informational distance has similar effects on construal level as temporal, spatial, social and hypothetical distance. This implies that informational distance is another dimension of psychological distance (Fiedler, 2007). This

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27 would mean that the other dimensions of psychological distance are highly related to informational distance. Therefore, the following hypothesis is stated:

H³: Informational distance is strongly positively correlated with hypothetical distance.

Furthermore, when informational distance in negotiations can be explained as another dimension of psychological distance, informational distance should have similar effects on negotiators’ value-behavior correspondence as the other dimensions of psychological distance. In this regard, Chajut and Algom (2003) show that informational distance increases people’s attention on broad aspects and that informational closeness increases people’s attention on concrete aspects. Specifically, these authors show that much available information, i.e., informational closeness, increases stress in individuals (Chajut & Algom, 2003). This stress that is caused by informational closeness increases people’s attention selectivity (Chajut & Algom, 2003). Therefore, people’s attention is narrow under informational closeness, so that they only focus on the task-specific attributes (Chajut &

Algom, 2003). Conversely, little available information, i.e., informational distance, decreases people’s stress as well as their attention selectivity (Chajut & Algom, 2003). Therefore, people focus on broader attributes when informational distance is large (Chajut & Algom, 2003). This implies that people’s thinking is more abstract under high informational distance. This abstract thinking induces people to include values in their decision-making, which again increases the influence of values on people’s behavioral decisions (Eyal et al., 2009; Torelli & Kaikati, 2009).

Therefore, informational distance should increase the value-behavior correspondence in negotiators. This results in the following hypothesis:

H⁴: Informational distance strengthens the influence of social value orientation on behavior, such that prosocials adopt more integrative strategies under informational distance and proselfs adopt more distributive strategies under informational distance.

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3 CONCEPTUAL MODELS

This section integrates the hypotheses into two conceptual models. These theoretical models schematically depict how all concepts discussed in the theory chapter are interrelated.

The conceptual models describe the relationships between SVO, negotiation strategies, hypothetical distance and informational distance. As depicted in the models, it is predicted that SVO has a direct effect on negotiation strategies, based on previous research (e.g., de Dreu & van Lange, 1995). Furthermore, it is predicted that hypothetical and informational distance moderate this relationship between SVO and negotiation strategies. Specifically, it is predicted that hypothetical and informational distance strengthen the effects of SVO on negotiation strategies (Giacomantonio et al., 2010).

These relationships are described in two separate models, because hypothetical distance and informational distance are predicted to be independent factors. It is predicted that informational distance increases negotiators’ perceptions of distance, but it does not influence objective hypothetical distance. Therefore, both effects are depicted in separate models, to clarify that both factors should be able to independently influence the relation between SVO and negotiation strategies. This does not take away from the fact that informational distance might create very similar effects as hypothetical distance, because it is proposed to be part of the same construct of psychological distance (Fiedler, 2007). However, even when these variables would be part of the same overall construct, they still would have independent effects on the relation between SVO and negotiation strategies. Therefore, the relationships are depicted in two separate models.

Informational Distance

Social Value Orientation Negotiation Strategy

Figure 2 : The conceptual models

H1

H⁴

Hypothetical Distance

Social Value Orientation Negotiation Strategy

H1

H²

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4 EXPERIMENT 1

This section describes how the first experiment is conducted. This experiment is designed to test the direct effect of SVO on negotiation strategies. Moreover, it analyzes the interaction effect between hypothetical distance and SVO on negotiation strategies. The section outlines the research methodology, reports the results of the experiment and discusses the implications of those results.

4.1 METHODOLOGY

4.1.1 SAMPLE

Participants for this experiment are recruited through convenience sampling. No specific selection criteria are applied, besides the requirement that participants must be over the age of 18 years. Participants of this experiment are 173 people who were recruited mainly via online platforms. Eleven participants (6.4%) are excluded from the final sample for failing the attention check. Therefore, the final sample consists of 162 participants (54.9% female; M^age

= 31.1 years, SD = 12.6 years). Participants agreed to partake in the study on a voluntary basis and were randomly assigned to either the control (n = 78) or experimental condition (n = 84).

4.1.2 | DESIGN

The first experiment has a one-way (hypothetical distance: low; high) independent samples design. The low hypothetical distance condition serves as the control condition and determines the effects of SVO on negotiation strategy under hypothetical closeness. The high hypothetical distance condition serves as the experimental condition and demonstrates the effects of SVO on negotiation strategy when people are experiencing hypothetical distance.

A comparison between the control and experimental condition shows how people’s strategic choices change depending on the level of hypothetical distance.

4.1.3 PROCEDURE

Participants are invited to partake into an online questionnaire on a voluntary basis. All participants are informed that they will be engaging in several negotiation exercises with a fictional other person. Then, each participant will be asked to fill in the 6-item SVO slider measure to determine participants’ SVOs. Thereafter, participants are randomly exposed to

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30 one of the two conditions as described earlier. In both conditions, hypothetical distance is manipulated. Both scenarios will be phrased in the exact same way, except from the manipulation of hypothetical distance. The scenarios describe either how probable or improbable a successful negotiated agreement is for the participants. The exact scenario descriptions for each condition can be found in appendix 8.1.

After being exposed to one of the conditions, participants are asked to indicate their agreement with twenty statements that either represent an integrative or distributive negotiation strategy, according to the measures of Cheung et al. (2006) and Koza and Dant (2007) respectively. Twelve of the statements are representative of integrative negotiation strategies, while the remaining eight statements relate to distributive strategies. These statements are presented to the participants in a random order, to prevent any potential order effects. The participants will be asked to indicate the extent to which they agree with the statements on a 7-point Likert scale. Finally, participants are asked to fill in an attention check question, the manipulation check question and demographic information about their age and gender.

4.1.4 VARIABLES AND OPERATIONALIZATION

The current experiment reviews the relationships between three distinct variables. Each variable is related with another in a specific manner. The research manipulates one independent variable, namely, hypothetical distance, but it also measures an independent variable, SVO. Lastly, two dependent variables are measured in this study, integrative negotiation strategies and distributive negotiation strategies.

In this experiment, hypothetical distance is manipulated by changing the scenario description in the control and experimental condition. This description will be altered, such that it either seems probable (low hypothetical distance) or improbable (high hypothetical distance condition) that participants will reach an agreement with the fictional other. Therefore, hypothetical distance is created by providing participants with a-priori information about the probability of coming to a successful negotiated agreement. In the low hypothetical distance scenario, the probability of coming to a negotiated agreement will be described as “almost

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31 certain, around 95% chance”. In the high hypothetical distance scenario, the probability of coming to a negotiated agreement will be described as “very unlikely, around 5% chance”.

These operationalizations are adapted from Wakslak et al. (2006).

Furthermore, there is another independent variable, that will be measured during this experiment. Participants’ SVO will be measured with the SVO slider measure as developed by Murphy et al. (2011). The main advantage of this SVO slider measure over other, mainly categorical, measures is that the SVO slider method allows us to represent SVOs at the ratio level (Murphy et al., 2011). This means that we can precisely calculate the SVOs of individuals, instead of being limited to a categorical classification of participants. The SVO slider measure consists of a six-item decomposed game measure, based on the technique developed by Messick and McClintock (1968).

Messick and McClintock devised this technique, because the behavior of players is dependent on both their own preferences and their beliefs about the intentions of the other player in strategic games. Therefore, people’s true SVO can only be found when the people believe they can determine the outcome themselves. In a decomposed game task, the decision-makers can individually determine how resources are divided between themselves and a fictional other player (Messick & McClintock, 1968). Therefore, this task allows for an observation of someone’s preferences about an outcome division without interdependence on others. This means that the true, independent SVO of people can be determined through this decomposed game technique.

After participants completed the SVO slider measure, the mean resource allocation for the self (𝐴̅!) and the mean resource allocation for the other (𝐴̅") can be calculated. Then, 50 is subtracted from each of these means, so that the base of the calculated angle is in the center of the SVO-ring, as developed by Griesinger and Livingston (1973) (Murphy et al., 2011). When the inverse tangent of this ratio is computed, the resulting angle is representative of an individuals’ SVO. The greater numerical value of that angle is, the more prosocial a person is (Murphy et al., 2011).

SVO° = arctan ( A0_#− 50 A0_$− 50 )

Figure 3 : The SVO slider measure formula (Murphy et al., 2011)

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32 The negotiation strategies of participants will be measured according to scales that are adopted from Cheung et al. (2006) and Koza and Dant (2007) to measure the levels of integrative and distributive negotiation strategies respectively. The scale to measure integrative negotiation strategies consists of 12 items, which are measured on a 7-point Likert scale (1= strongly disagree; 7= strongly agree). This measure presents participants with statements about their negotiation behavior, which reflects how many integrative negotiation strategies they adopt (Cheung et al., 2006). This measure of integrative strategies proved high reliability (Cronbach’s α = 0.894). The corrected item-total correlations indicate that all items have good correlation with the total score of the scale (all > 0.30). Moreover, none of the items would significantly influence reliability if the item was deleted.

Similarly, the scale to measure distributive negotiation strategies consists of 8 items, which are measured on a 7-point Likert scale (1= strongly disagree; 7= strongly agree). This measure also presents participants with statements about their negotiation behavior, but these statements reflect how many distributive negotiation strategies they adopt (Koza &

Dant, 2007). The distributive strategies measure was highly reliable as well (Cronbach’s α = 0.830). The corrected item-total correlations indicate that all items have good correlation with the total score of the scale (all > 0.30). Also, none of the items would significantly influence reliability if the item was deleted

For hypotheses testing, these integrative strategies and distributive strategies scales were converted into overall scores of integrative and distributive strategies. The integrative strategies measure from Cheung et al. (2006) was converted into an overall score by calculating the mean value over all 12 items. Similarly, the distributive strategies scale from Koza and Dant (2007) was converted into an overall score by calculating the mean value over all 8 items. These overall scores represent participants’ general adoption of integrative and distributive negotiation strategies.

4.1.5 MANIPULATION CHECK

After the main experiment, participants will be asked to fill in some questions to check whether the manipulations of the independent variables were successful. Firstly, we must validate that the participants perceive the 5%-condition as hypothetically close, and the 95%-

Negotiating with your Values through Psychological Distance

Negotiating with your Values through Psychological Distance

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