Offer and veto: an experimental comparison of two negotiation procedures

Abstract

Negotiation by veto is introduced as a novel negotiation approach and as an alternative to the exchange of offers. Rather than proposing offers, negotiators following the negotiation by veto approach eliminate unfavorable settlement options from the set of possible agreements until they eventually achieve a mutual acceptable solution. It is argued that this approach could lead to superior negotiation outcomes and improve negotiators’ satisfaction. In an experiment with student participants the performance of offer and veto negotiation procedures is compared. In simple negotiation problems both negotiation procedures reach similar outcomes. In complex negotiation problems negotiation by veto achieves fewer but better agreements. However, participants were more satisfied with the negotiation process, outcome and their opponent’s behavior when exchanging offers rather than vetoing alternatives.