Alliance formation: the impact of teams and individuals in initial negotiations

Abstract

In this paper, we investigate whether individuals or teams should be sent to an initial alliance meeting and the impact of shared team aspiration levels on negotiation processes and outcomes. We use an experimental role-play to simulate an initial alliance meeting. 128 subjects participated in our study and our findings reveal that in team to team negotiations, higher economic outcomes were achieved and a higher degree of competitive behaviour was reported than in individual to individual dyads, and that team aspiration alignment was associated with increased reciprocity between teams. These findings suggest that in initial negotiations in an alliance, sending teams may be better for the subsequent developments in the alliance. When these teams are aligned, they are more attuned to the behaviour of their alliance partner.