The pernicious role of asymmetric history in negotiations

Source: Linda Dezső, George Loewenstein, Jonathan Steinhart, Gábor Neszveda, Barnabás Szászi, Journal of Economic Behavior & Organization, Volume 116, August 2015
(subscription required)

From the abstract:
The role of history in negotiations is a double-edged sword. Although parties can develop trust over time, there are also countless examples of protracted feuds that developed as a result of conflicting interpretations and invocations of history. We propose that, due to biased invocations of the past, history is likely to play a pernicious role in negotiations – particularly when given an asymmetric history in which one party benefited at the expense of the other. We test this prediction in two, two-stage experiments. We find that asymmetric history in a first stage leads to increased impasses in a second stage, but that this effect holds only when the second stage pairs the same two parties who shared the asymmetric history in the first.

• Two experiments demonstrate the significance of asymmetric history in negotiations.
• In both experiments, dyads negotiate to divide joint earnings.
• We find incompatible bargaining claims when partners share asymmetric history.
• Asymmetry only matters when parties share history.

How history adds conflict to negotiations
Source: Shilo Rea – Carnegie Mellon, Futurity, June 22, 2015

New research shows how past histories can harm negotiations, particularly when an event in the past benefited one party at the other’s expense.

In these situations, the party that got the short end of the stick tends to believe that they’re owed retribution. The party that triumphed in the past, in contrast, tends to think that the past is irrelevant—bygones should be treated as bygones.

Although different sides can develop trust over time, there are also countless instances of prolonged feuds that developed because of conflicting histories.

A prime example is World War II, which was fought in part to rectify perceived wrongs from the past. The phenomenon also extends to day-to-day situations such as sharing utility costs with a roommate or jockeying for position at grocery store checkout lanes.