Linda Babcock

Constraints and Triggers: Situational Mechanics of Gender in Negotiation

The authors propose 2 categories of situational moderators of gender in negotiation: situational ambiguity and gender triggers. Reducing the degree of situational ambiguity constrains the influence of gender on negotiation. Gender triggers prompt divergent behavioral responses as a function of gender. Field and lab studies (1 and 2) demonstrated that decreased ambiguity in the economic structure of a negotiation (structural ambiguity) reduces gender effects on negotiation performance. Study 3 showed that representation role (negotiating for self or other) functions as a gender trigger by producing a greater effect on female than male negotiation performance. Study 4 showed that decreased structural ambiguity constrains gender effects of representation role, suggesting that situational ambiguity and gender triggers work in interaction to moderate gender effects on negotiation performance.

Self-Serving Assessments of Fairness and Pretrial Bargaining

A persistently troubling question in the legal-economic literature is why cases proceed to trial. Litigation is a negative-sum proposition for the litigants-the longer the process continues, the lower their aggregate wealth. Although civil litigation is resolved by settlement in an estimated 95 percent of all disputes, what accounts for the failure of the remaining 5 percent to settle prior to trial?

Who Goes to the Bargaining Table? The Influence of Gender and Framing on the Initiation of Negotiation

Unlike typical negotiation experiments, these studies investigated when men and women initiate negotiations in the absence of overt prescriptions to negotiate. Using a new experimental paradigm, the authors showed that the framing of situations is a critical driver of gender differences in initiating negotiations. Drawing on literature on language, power, and politeness, the authors argued that framing situations as opportunities for negotiation is particularly intimidating to women, as this language is inconsistent with norms for politeness among low-power individuals, such as women. By contrast, framing situations as opportunities for asking is much less intimidating to women, as this language is more polite and role-consistent. Consequently, gender differences in initiating negotiations persisted when situations were framed as opportunities for negotiation yet were eliminated when situations were framed as opportunities to ask. Moreover, primed power attenuated gender differences in aversive reactions to the negotiation frame. In all, the studies presented begin to elucidate the reasons for gender differences in initiating negotiations and further illustrate that such effects depend on the situation.

How Can Women Escape the Compensation Negotiation Dilemma? Relational Accounts Are One Answer

Policy makers, academics, and media reports suggest that women could shrink the gender pay gap by negotiating more effectively for higher compensation. Yet women entering compensation negotiations face a dilemma: They have to weigh the benefits of negotiating against the social consequences of having negotiated. Research shows that women are penalized socially more than men for negotiating for higher pay. To address this dilemma, the authors test strategies to help women improve both their negotiation and social outcomes in compensation negotiations. In Study 1, communicating concern for organizational relationships improved female negotiators’ social outcomes, and offering a legitimate account for compensation requests improved negotiation outcomes. However, neither strategy—alone or in combination—improved both women’s social and negotiation outcomes. Study 2 tested two strategies devised to improve female negotiators’ social and negotiation outcomes by explaining why a compensation request is legitimate in relational terms. Results showed that, although adherence to the feminine stereotype is insufficient, using these “relational accounts” can improve women’s social and negotiation outcomes at the same time. Normative implications of conformity to gender stereotypes to reduce gender pay disparities are discussed.

Notes on Behavioral Economics and Labor Market Policy

Labor market policies succeed or fail at least in part depending on how well they reflect or account for behavioral responses. Insights from behavioral economics, which allow for realistic deviations from standard economic assumptions about behavior, have consequences for the design and functioning of labor market policies. We review key implications of behavioral economics related to procrastination, difficulties in dealing with complexity, and potentially biased labor market expectations for the design of selected labor market policies including unemployment compensation, employment services and job search assistance, and job training.

Bargaining Unit Composition and the Returns to Education and Tenure

Using data on collectively bargained outcomes in Pennsylvania schools in 1983–89, the authors find a strong relationship between the returns to education and tenure and the distribution of those attributes in the bargaining unit. For instance, the higher the median level of teacher tenure in a district, the greater was the pay gap between teachers with low and high tenure. This relationship was very strong in districts with vigorous community support for union activities and weak or nonexistent in districts with low union support. The authors argue that, consistent with the “median voter model,” the unions in this study pushed hardest to advance the interests of their typical members, and that they were most effective in doing so where the community was generally supportive of unions.

The relationship between uncertainty, the contract zone, and efficiency in a bargaining experiment

Research on bargaining suggests that the efficiency of bargaining is related to the size of the surplus to be divided and to uncertainty about the opponent. We conducted a bargaining experiment which manipulated both of these factors. We find that the presence of uncertainty decreases bargaining efficiency, while the effect of contract zone size depends on whether there is uncertainty or certainty.

Negotiation Topic as a Moderator of Gender Differences in Negotiation

Recent research on gender and negotiations suggests that women are less likely to initiate negotiations than men (Small, Gelfand, Babcock, & Gettman, 2007) and that they negotiate less well than men (Bowles, Babcock, & McGinn, 2005; Stuhlmacher & Walters, 1999). However, little attention has been paid to how the negotiation issue itself affects these gender differences (but see Bear, 2011, for how issues affect gender differences in avoiding negotiation and Miles & LaSalle, 2008, for how issues affect gender differences in self-efficacy in negotiation). Experimental research on negotiations predominantly uses prototypically masculine issues. In a metaanalysis of how gender influences negotiation performance (Stuhlmacher & Walters, 1999), 47.5% of the 21 included studies involved monetary purchases, 24.5% involved compensation, and 28.3% involved legal issues. Might gender differences be eliminated or even reversed if the negotiations were over more prototypically feminine issues? There is reason to believe that this may be the case. Situations that do not match an individual’s gender role involve behaving in a counterstereotypical way, such as when a woman occupies a masculine, agentic role (e.g., a top managerial position) or when a man occupies a feminine, communal role (e.g., staying at home to raise children). These types of gender-incongruent situations lead to anxiety and role conflict (Bosson, Prewitt-Freilino, & Taylor, 2005; Luhaorg & Zivian, 1995; Parry, 1987), and in comparison with gender-congruent situations, gender-incongruent situations are more likely to be avoided (Bem & Lenney, 1976) and tend to elicit more negative evaluations (Davison & Burke, 2000; Eagly & Karau, 2002; Hoyt, 2012). In the current study, we examined whether the masculinity or femininity of the negotiation issue moderates gender differences in performance. We predicted an interaction between the gender of the negotiator and the nature of the negotiation topic: That is, we expected that men would outperform women when negotiating over a masculine issue, and that women would outperform men when negotiating over a feminine issue.

Settlement Escrows: An Experimental Study of a Bilateral Bargaining Game

This paper reports the results of a bargaining experiment. We follow the pretrial bargaining model of Gertner and Miller (1995) under uncertainty and examine the effect of a litigation institution, called a settlement escrow and uncertainty on the timing and quality of settlement outcomes. Our findings indicate that settlement rates are significantly higher when a settlement escrow is added to the bargaining process where there is asymmetric information. Quality of outcomes, measured as the percentage of the true damage that the outcome represents, is positively and significantly influenced by the addition of a settlement escrow. Settlement rates are higher when certainty is provided, under the no escrow institution. Quality of outcomes is negatively and significantly influenced by the addition of certainty. The escrow institution has no effect on bargaining outcomes, under the certainty condition; and, the provision of certainty has no effect on bargaining outcomes, under the escrow institution. These findings suggest first that the escrow is a useful device for improving efficiency when bargaining is conducted under uncertainty and second, that the escrow fully compensates the negative effect of uncertainty on bargaining processes.

Gender as a Situational Phenomenon in Negotiation

We explore how situational factors moderate gender differences in negotiation. We conduct a baseline study with MBA students and 2 experiments with laboratory participants. In Study 1, males (vs. females) report significantly higher performance targets and agreement payoffs within a structurally ambiguous negotiation. Study 2 reveals a significant interaction between gender and structural ambiguity: gender differences (favoring males) in target prices, intended offers and agreement prices are significant under high ambiguity but diminish under low ambiguity. Study 3 produces a significant interaction between gender and representation role (for self vs. other) on prenegotiation expectations: gender differences (favoring males) in target wages and intended offers are greater when negotiators represent themselves vs. others. We conclude with prescriptive implications of this research.