Foreign language effect in negotiations: negotiation language and framing effect on contract terms and subjective outcomes

Purpose: This study aims to test negotiation outcomes when bilinguals negotiate in a foreign rather than their native language. Decision research on the foreign language effect indicates that bilingual individuals may be less susceptible to framing bias when using a foreign language because they make less emotional and biased choices. With increasing international business activity, there is a pressing need to examine the effect of language on bilingual negotiators. Design/methodology/approach: The authors tested the hypotheses using a two (task frame: gain vs loss) × 2 (language: foreign vs native) factorial design recruiting 246 Korean–English bilinguals. A negotiation simulation with three issues was used, and participants exchanged offers with a preprogrammed computer they believed to be a real counterpart. Findings: There was no significant interaction effect between framing and language on the offers made, but the framing effect was mitigated and nonsignificant for negotiators who used their foreign language. The interaction between framing and language conditions significantly affected negotiators’ positive emotions and satisfaction with the negotiation. Originality/value: The uniqueness of this paper is related to its effort to investigate the effect of negotiation language on a negotiator’s decision-making. Considering globalization and the increasing prevalence of international negotiations, this paper has implications for researchers and practitioners.