Heart Strings

and Purse
Strings

Carry Over Effect of

Emotions on
Negotiation Decisions

Group 8
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Contents

Literature Review and Research Gap ............................................................................................................ 3

Research Question ........................................................................................................................................ 3
Description of Variables ................................................................................................................................ 3
Hypotheses: .................................................................................................................................................. 4
Experimental Design ..................................................................................................................................... 4
Results ........................................................................................................................................................... 5
Analysis ......................................................................................................................................................... 7
Research Findings and Discussion................................................................................................................. 8
Assumptions and Limitations ........................................................................................................................ 9
Regression Model ....................................................................................................................................... 10
Managerial Implications.............................................................................................................................. 10
Further Research......................................................................................................................................... 11
Works Cited ................................................................................................................................................. 12
Appendix ..................................................................................................................................................... 13
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Literature Review and Research Gap

In the recent years, research has shifted its focus towards affect and the significance of its impact in the process of
decision making. It has been proven that emotions have a strong tendency to carry over temporally and color
judgments about the future. The most significant emotions along the affect spectrum have been examined in past
literature and can be classified into two broad categories: Positive and Negative.

The positive end of the affect spectrum includes happiness, surprise, excitement, contentment amongst others
whereas the negative end of the spectrum includes anger, disgust and sadness as the major elements. We
classified our literature into three broad categories: i) The Affect-as-Information perspective, ii) Heuristic
Processing as a Function of Mood and iii) The Affect Infusion Model.

i) The Affect-as-Information perspective suggests that affect is the source of unconscious evaluative
information serves to modify the cognitive processes that underlie decision situations.
ii) People in positive emotional states tend to rely heavily on decision making heuristics while sad
people are more likely to engage in motivated effortful processing (Bless 2000, 2001; Ruder & Bless,
2003).
iii) The Affect Infusion Model suggests that mood effects on cognition will be moderated by the
information processing strategy required by task at hand. Stronger effects are observed when the
task calls for extensive information search.

While the influence of specific emotions on decision situations has been examined extensively in the past, the area
of negotiation still remains relatively underexplored. For this reason, we decided to see the influence of negative
emotions (disgust and sadness, specifically) on negotiation effectiveness in an employment scenario.

Research Question
How do specific fleeting emotions of disgust and sadness carry over from past situations to color
performance in subsequent unrelated negotiations?

Description of Variables

In order to answer the aforementioned research question, the following variables have been identified and
selected:

Dependent variable : Score obtained in a negotiation activity

Independent variable : Emotional states (neutral, sad, disgusted)
Control variables : Gender
School*** (SDSB, SHSSL, SSE)
Role (A person in a position of power e.g. a manager might negotiate
differently than a person in an inferior position e.g. a job candidate.)
Year of study (Ability increases over course of undergrad study.)
GPA*** (A greater GPA might be correlated with better negotiation skills.)
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Emotional state of the opponent***

NOTE: *** indicates identified control variables which have actually been controlled in the experiment to some
extent.

Hypotheses:

As past literature indicates, emotions can carry over from one point in time to another and can influence
judgments as a result. Therefore, our first hypothesis was that emotions will carry over from the first phase of our
experiment to the next. About the specific emotion of sadness, research has suggested that sadness causes people
to want to change their current circumstances as a result of which the endowment effect is reversed. By this
extension, we hypothesized that people in the sad state will be willing to negotiate longer in order to reach better
outcomes as compared to people in the disgusted state. Lastly, as previous research suggests, people in a
disgusted state have this overwhelming desire to expel and get rid of things. By this extension, we hypothesized
that people primed for disgust wouldn’t argue their case for long and consequently, underperform in the
negotiation situation.

Experimental Design

Selecting participants

A sample of 22 LUMS SDSB freshmen and sophomores was selected for the experiment. The GPAs of the selected
participants ranged from 3.00 - 3.80. These criteria help control for the school and GPA which are important
control variables. The participants were divided into 11 pairs. The description of the pairs is as follows:

 Neutral-Neutral: Neither of the two members was subjected to emotional priming of any sort.
There were 2 such pairs.
 Neutral-Sad: One member was subjected to the sadness prime while the other was not
subjected to emotional priming of any sort. There was a total of 4 such pairs.
 Neutral-Disgusted: One member was subjected to the disgust prime while the other was not
subjected to emotional priming of any sort. There was a total of 5 such pairs.

This experimental design ensures that an emotionally primed participant is always paired with a neutral person,
hence controlling for “Emotional state of the opponent” for non-control individuals.

Emotional Priming – Stage 1:

The participant was made to watch two videos of durations ranging from 3 to 5 minutes on a laptop screen in a
secluded Discussion Room. It was ensured that there was no human interaction during the video.

 Sadness: The two video clips shown were:

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o Video 1: Earthquake in Nepal (3:41) – A short video depicting the loss of lives and
family stories
o Video 2: Changing Batteries (5:34) – The story of an old, lonely man whose son sends
him a robot to take care of him and how their bond develops over time
 Disgust:
o Video 1: Fear Factor (2:23) – Showed people being made to drink donkey semen and
donkey urine
o Video 2: Top Ten most Disgusting Foods (3:16) – Showed how foods can be disgusting

Note: The combined duration of the videos selected for inducing sadness was deliberately kept longer because it is
harder to induce sadness than it is to induce disgust; and we wanted both emotions to be induced on a relatively
comparable scale.

The Negotiation Game – Stage 2:

Immediately after the emotional priming (if applicable) each participant was paired up with his opponent and the
pair was taken to an isolated Discussion Room. One of the members was assigned the role of an HR Manager while
the other one was assigned the role of a Job candidate. Each of them was given his respective information sheet
which carried a description of his role along with a payoff table (see Exhibits 1 and 2). They were also presented
with an employment contract (see Exhibit 3). After the rules of the game were explained to the two opponents,
they were given an infinite duration of time to arrive at an agreement and fill in the employment contract. They
were then left to negotiate in privacy. It was ensured that they did not experience any disturbance or distraction of
any sort while they were negotiating. The entire negotiation process was observed unobtrusively by an
experimenter outside the DR to ensure conformance to the rules.

Rules of the game:

(i) Each subject had to read his information sheet thoroughly before beginning the negotiation. The
information sheet was not to be shared with the opponent.
(ii) Each subject had to negotiate within the capacity of his role (HR manager or Job Candidate), keeping
in mind the payoff table and with an aim of maximizing his own payoff.
(iii) The pair had to negotiate on 7 key elements of the employment contract and write down the final
values that had been decided upon as a result of the negotiation.
(iv) The subjects were not given a time limit to finish their negotiation. They would not be interfered
during the game. However, the experimenters would intervene if there was any confusion with
regards to the process that needed clarification.

Results

The employment contracts filled by all of the 11 pairs were collected and scored. The individual scores of the Job
candidates and HR managers as well as the combined score of each pair were calculated using the combined
payoff table (see Exhibit 4).

The pairwise results for all 11 pairs are as follows:

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Figure 1: Pairwise comparisons

The individual results for all 22 participants are as follows:

Figure 2: Individual comparisons

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Analysis

Figure 3 below shows a comparison of the calculated means for the three different kinds of pairs.

Figure 3: Comparison of mean scores across pairs

The mean combined scores for the three types of groups are tabulated below :

Sad-Neutral Disgusted-Neutral Neutral-Neutral

18462.5 19194 20600

It can be seen that the pairs having both members neutral significantly outperformed the pairs having one
member who was emotionally primed (disgusted or sad). It can also be seen that the sad-neutral pairs performed
less well than the disgusted-neutral pairs.
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Figure 4 below shows a comparison of the calculated means for the three different kinds of emotional states.

Figure 4: Comparison of mean scores across individuals

The mean combined scores for the three emotional states are tabulated below:

Disgusted Sad Neutral

8980 9770.8 9775

It can be seen that disgusted individuals significantly underperformed in the negotiation as compared to sad and
neutral individuals. However, there is no significant difference between the average performance of the sad and
the neutral individuals.

Research Findings and Discussion

As indicated by the comparison of aggregate scores across the three types of groups and the three types of
individuals, specific fleeting emotions of disgust and sadness do appear to carry over from past situations to color
performance in subsequent unrelated negotiations.

The feeling of disgust, as mentioned in the article “Heart Strings and Purse Strings” increases the desire to expel. In
this scenario (an ongoing negotiation e.g. pertaining to an employment contract) disgust produces the same effect.
This can be seen in the dramatic reduction in the negotiation scores of individuals who were primed with disgust. It
is therefore proposed that disgust decreases the ability and the willingness of an individual to perform well in a
negotiation and hence strike a better bargain. This is so because the individual has a greater desire to get out of
the current situation and therefore he tries to satisfice instead of optimize.
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Sadness, on the other hand does not appear to significantly affect the ability or willingness to negotiate well, as is
evidenced by Figure 4. We propose here that in the context of a sad negotiator, there are two competing forces at
play. On one hand, sadness increases the desire to change one’s current situation (as described in the article
“Heart Strings and Purse Strings”). This encourages an individual to negotiate better, because a positive outcome
in the negotiation would lead to a change in the current situation (in this case, it would lead to the transition from
unemployment to employment). However, at the same time, sadness decreases the willingness and ability of the
individual to engage in meaningful and substantive discussion with a fellow human being. These two forces act in
opposite directions and end up nullifying each other. As a result, sadness does not significantly affect negotiation
ability.

It was also observed during statistical analysis of the results that males negotiate significantly better than females.
In fact, given the extremely small sample size of 22 participants, gender was the only variable that was significant
at 5% level of significance when the regression model (described below) was run.

Assumptions and Limitations

(i) The year of study (freshman, sophomore, junior and senior) of the participants could not be
controlled for due to time constraints and the small number of available people to select
participants from. This is a major limitation because generally it is believed that the power to
argue reasonably and rationally and hence persuade and negotiate better improves over the
course of one’s undergraduate study. Additionally, SDSB sophomores study a course called
“Organizational Behavior” which contains a brief module on “Negotiation”. This might have
affected results by giving other people an upper hand over their freshman counterparts.
However, it is hoped that the module on Negotiation did not skew results significantly because it
is very brief (covering two lectures at most) and focuses mainly on theory rather than the
practical application of negotiation strategies.

(ii) The GPA of the participants fell within the 3.0 to 3.8 bracket. However, the variable GPA could
not properly be controlled for, for the same reasons as described above. A range of 3.0 to 3.8
contains significant variation. Although GPA is not a direct predictor of a person’s negotiation
skills it does indicate a person’s level of conscientiousness, and, to some extent, his smartness
and ability to think clearly and reason well. It might be possible that a large difference in the GPA
within a pair could have skewed the negotiation results.

(iii) Gender could not be controlled for, for the same reasons as mentioned above. This is a major
limitation because the preliminary regression model (described below) showed gender to be the
most important variable determining negotiation ability in our small sample of 22 people.

(iv) Since there was no feasible way to determine a person’s individual tendency to negotiate well, a
differential in such natural tendency was a limiting factor that would have affected results.
Natural tendency refers to a person’s inner ability to negotiate well keeping the effect of
education constant. This might be affected by family background, individual interests and
hobbies and inborn ability.
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(v) The sample size was only 22 due to time constraints. This size is undoubtedly small and
insufficient to generalize from.

(vi) It was assumed that the videos were successful in inducing the relevant emotions. This may or
may not have held.

(vii) It was also assumed that the emotion induced during the priming carried over to the next stage
of the experiment i.e. the negotiation game. This may or may not have held.

Regression Model

If the study is repeated for a larger sample size, the following regression model can be useful.

SCORE = Bo + B1sad + B2disg + B3Gen + B4Role + B5Year + B6sESP + B7dESP + B8GPA+ u

Where
Sad: Sad emotion induced (Yes/No)
Disg: Disgusted emotion induced (Yes/No)
Gen : Gender ( 1 for males 0 for females)
Role : Manager/Candidate (1 for Manager)
Year: Freshman/Sophomore (1 for Sophomore)
ESP: Sad partner (Yes/No)
dESP: Disgusted partner (Yes/No)
GPA: cGPA

The control variables in this model would help to overcome some of the limitations of the experiment above in
terms of variables that have not been controlled for.

Managerial Implications
We conducted this research to help managers make better decisions at the workplace. The human mind is
susceptible to biases, and its tendency to rely on heuristics to make decisions in a fast paced world often leads to
suboptimal choices resulting inevitably in less than ideal consequences. Our emotions influence our decision
making, even when we claim to be objective and rational.

The results of our study are especially relevant in the context of negotiations. Bargaining or negotiations are an
integral part of business activities where one tries to maximize their perceived value while giving up a few benefits
in return. Negotiations take place when a person sits in a job interview and is discussing his pay package. They take
place when a procurement management tries to purchase raw materials from a vendor for the least amount of
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capital. They also take place when a fed up employee asks for a pay raise from his boss. In all these situations the
mood of the person in power will greatly determine the chances of success. We looked at two emotions in our
study, namely sadness and disgust. According to our research, managers should be aware that being in a disgusted
state will increase their propensity of giving generous concessions to employees they are negotiating with.
Similarly, in order to achieve the ultimate goal of organization’s profit maximization, it should be ensured that
negotiations are conducted under the right emotional states in order in order maximize gains. Further research
should be conducted in order to determine the effect of other emotions, like happiness, fear and anger on a
person's ability to negotiate. Furthermore this research can be extended to include tactics that will result greater
success. There are some emotions that, when displayed, will result in greater chances of success.

Offices in which the employees are interviewed should be clean and the ambience should be pleasant increasing
the ability of the interviewer to stay in the room and conduct a proper interview. Foul odors in the room will
increase the probability of negotiator giving more concessions than the original wanted to give. Formal dress code
should be made mandatory for interviews which make the interviewee appear pleasant. Pleasant looking people
will rarely evoke the emotion of disgust, thus increasing the chances of a successful negotiation (from the
company's perspective). Care should also be taken that company employees receive good treatment right before
the start of a negotiation. They shouldn't be exposed to any undesirable stimulus right before the negotiation as,
like our study suggests, it will have a detrimental effect on their ability to negotiate.

The ability to negotiate effectively can be a source of competitive advantage for the firm. Being able to buy raw
materials of good quality at a lower price, being able to secure profitable contracts and not succumbing to unfair
demands of employees will all result in increased revenues for the firm which later on can be reinvested to further
increase the business. From a personal point of view, effective negotiation tactics can help employees in their
domestic life as well. Strategically conservations can be maneuvered to get out of potential cumbersome tasks at
home especially at a time when the office requires your attention.

Further Research

While we were able to successfully prime the disgusted state, we were limited in our ability to prime sadness.
Sadness is a rather difficult emotion to prime temporarily. Unless, the situation involves a personal loss, an
individual wouldn’t truly be in that particular emotional state. Therefore, we suggest that future research uses
subjects who are currently in an actual depressive state rather than and temporary one.

Gender differences are important predictors of negotiation outcomes. The significance of gender in conjunction
with specific emotions in predicting decision outcomes is yet to be explored. Personality differences also need to
be accounted for. People with a particular personality type would be more likely to be influenced by a specific
emotion as opposed to others. This variable needs to be accounted for.

The influence of time difference needs to be explored further. Since the time lag between emotional priming and
the decision situation is a lot different in experimental situations as compared to real life scenarios, the varying
lengths of in-between time would act as a mediating factor between emotions and decision outcomes.
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Works Cited
Barry, Bruce, and Richard L. Oliver. "Affect in Dyadic Negotiation: A Model and Propositions."

Www.sciencedirect.com. Elsevier, Aug. 1996. Web. 28 May 2015.

<http%3A%2F%2Fwww.sciencedirect.com%2Fscience%2Farticle%2Fpii%2FS0749597896900692>.

Butt, Arif Nazir, Jin Nam Choi, and Alfred M. Jaeger. "The Effects of Self-Emotion, Counterpart Emotion, and

Counterpart Behavior on Negotiator Behavior: A Comparison of Individual-Level and Dyad-Level

Dynamics." Jstor.org. Wiley, Sept. 2005. Web.

<http%3A%2F%2Fwww.jstor.org%2Fstable%2Fpdf%2F4093888.pdf%3FacceptTC%3Dtrue>.

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eds. Marvin E. Goldberg, Gerald Gorn, and Richard W. Pollay, Provo, UT : Association for Consumer

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JSTOR. Why Does Affect Matter in Organizations, Feb. 2007. Web. 28 May 2015.

<http://www.jstor.org/stable/4166286>.

Lerner, Jennifer S., and George Loewenstein. "The Role of Affect in Decision Making." Handbook of Affective

Sciences (2003): 619-42. Print.

Lerner, Jennifer S., Deborah A. Small, and George Loewenstein. "Heart Strings and Purse Strings - Carryover Effects

of Emotions on Economic Decisions." Psychological Science 15.5 (2004): 337-41. Web.

Thagard, Paul, and Fred W. Kroon. "Emotional Consensus in Group Decision Making." Mind & Society (2006): n.

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Appendix

Exhibit 1: HR Manager Role

14
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Exhibit 2: Job Candidate Role

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Exhibit 3: The Employment Contract

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Exhibit 4: Combined Payoff Table