The effect of externally set goals on reaching integrative agreements in competitive markets

The study of the negotiation process has enjoyed a recent resurgence of scholarly interest. Of particular concern is the ability of negotiators to achieve solutions which result in integrative outcomes. The purpose of this study is to identify the effects of different levels of aspiration/goals on negotiator success and their ability to reach integrative solutions in a competitive market. One hundred fifty‐eight subjects who were assigned one of four levels of goal difficulty‐no goal, compromise goal, challenging goal, and difficult goal‐participated in a competitive, multi‐person, multi‐transaction market simulation. The study found (1) challenging and difficult goals significantly enhanced participants' performance; (2) the more difficult the goal, the fewer transactions were completed; and (3) while there were no differences in total profitability among the challenging goal, compromise goal, and no goal, the difficult goal condition had a significant and negative effect on the ability of participants to achieve profitable outcomes within the market. A discussion of these findings and directions for future research are presented.