The influence of reward magnitude, opening bid and concession rate on profit earned in a managerial negotiation game

This paper examines the influence that reward magnitude, concession rate, and opening bid concession have on the payoffs earned in a managerial bargaining game. Twenty-four subjects participated as both buyers and sellers in 18 separate bargaining sessions. The data indicate that the opening bid concession and the concession rate of the bargainer are crucial in reaching mutually rewarding agreements over a period of time regardless of the magnitude of the potential earnings. The implications of the results for managerial bargaining behavior in organizations are discussed.