Putting negotiation in context: The US vs. Japan

We study the extent to which cultural differences in bargaining behavior are context-dependent. In an online experiment, we examine bargaining behavior in the US and Japan using the ultimatum game, questionnaire items, and multiple contextualized scenarios. Our participants were presented with two general questions about negotiation behavior, one about the tendency to negotiate and another about the level of aggressiveness in negotiations. They also played the ultimatum game, making two decisions, one as the proposer and one as the responder. Finally, they responded to questions about 13 different real-life negotiation scenarios, indicating whether they would try to negotiate or not, and in 7 scenarios stating what their proposal to the other party would be. The participants also indicated how frequent each of the negotiation scenarios was in their environment. We found significant cross-country differences in willingness to negotiate in 6 out of the 13 scenarios. In half of these cases, the Americans were more willing to negotiate; in the other half, the Japanese were more willing. We also found significant differences in the level of the proposals to the other party in two out of seven scenarios. Similarly, in one of these cases, the proposals of the Americans were higher, while in the other the Japanese proposed higher amounts. Our analyses show that the differences in negotiation behavior can be partly explained by how frequent the negotiation scenarios are in the participants’ environment. Across the two countries, the questionnaire measure of the general tendency to negotiate highly correlated with the willingness to negotiate in the real-life scenarios. Moreover, our measure of the level of aggressiveness in negotiations significantly correlated with the level of the proposals made in the scenarios. On the contrary, we did not find significant correlations between the ultimatum game behaviors and the responses to the scenarios.