The Effects of Subjective Value on Future Consequences: Implications for Negotiation Strategies

Conventional wisdom holds that the objective value (OV) of a dealthat is, the explicit set of terms regarding the agreement-is the barometer of successful negotiation performance, bar none. By contrast, how one feels afterward is considered a fleeting emotion, subject to heuristics and biases. Offering a counterpoint to this rationalist assumption, in this chapter and elsewhere we maintain descriptively that negotiators care about how they feel and about how their counterparts feel. Going a step further, we maintain prescriptively that negotiators should care. Simply put, these subjective feelings during and after negotiations have objective consequences. The formal term we use for these feelings is subjective value (SV)-defined by Curhan, Elfenbein, and Xu (2006, p. 494) as the “social, perceptual, and emotional consequences of a negotiation.” The present chapter’s purpose is fourfold. First, we review theory and recent evidence documenting that SV not only matters to negotiators but also can matter in some cases more than OV. Second, we describe some specific negotiator actions, or tactics, that existing research suggests are associated with promoting or depleting a negotiation counterpart’s SV. Third, we identify two trends in the 21st century workplace that seem likely to strengthen the need for negotiators to pay attention to SV. These trends are: (a) the so-called flattening of hierarchical organizations and (b) the increased frequency of communication via “lean” channels such as e-mail and other text-only formats. We refer to these formats as lean because text-based communication limits participants from accessing the range of nonverbal cues, which carry additional affective meaning to enhance the appropriate regulation of social interaction (for a review, see Elfenbein, 2007). While describing each of these trends, we attempt to explain why they are likely to strengthen the need for the negotiation process to enhance counterparts’ SV. Fourth, and last, we identify research questions about SV that would be valuable to examine in future work, as guided by the dynamics of the 21st century workplace.