Hypotheses

In this section of the article, we will investigate the predictive validity of emotional intelligence, ERA, and cognitive ability on economic and relational negotiation outcomes.

Based on the theoretical background provided above, we generally expect all of these three abilities to have a positive effect on economic gains. As for emotional intelligence and ERA, theoretical accounts focus mainly on how these skills enhance identifying and influencing the counterpart’s interests and emotional state (e.g., Fulmer & Barry, 2004). Higher emotional intelligence individuals should thus be more aware of the counterpart’s satisfaction with the options created and be better able to regulate their own emotions to maintain composure.

Consequently, the probability of integrative agreements and higher joint gains should be increased (Foo et al., 2004). Given that emotional intelligence is also supposed to increase insight in one’s own judgment biases and emotions, participants high in emotional

intelligence should make decisions that are more suitable for maximizing their own gains (if they are instructed to do so). Further, inducing positive mood in the counterpart might also encourage him or her to make concessions (Foo et al., 2004). On the other hand, the few empirical studies in this area suggest that the increase in joint outcome for dyads with a high emotional intelligence member is due to higher gains of the counterpart (Foo et al., 2004) and no study has found an effect of emotional intelligence on one’s own individual gains. These findings suggest that high emotional intelligence individuals tend to accommodate the

interests of their counterpart, e.g., because they prioritize relational above economic outcomes (Kong et al., 2011).

In contrast, the only study investigating ERA in a negotiation context found increased individual gains for negotiators with high ERA (Elfenbein et al., 2007). This might reflect a

152 different way of using the information acquired about the interests and feelings of the

counterpart, namely to persuade the counterpart to make concessions and to ultimately

increase one’s own gains. Individuals high in ERA might not sacrifice gains as high emotional intelligence individuals seem to do. This hypothesis is also indirectly supported by Thompson and Hastie’s study (1990), in which negotiators who made more accurate judgments about the other party's interests and priorities earned higher individual payoffs. Another reason for a different effect of ERA as compared to overall emotional intelligence could be that the standard test measuring emotional intelligence (MSCEIT, see below) might capture a different ability than ERA tests due to a different scoring procedure (the correct response is determined by group consensus in the emotional intelligence test versus by objective criteria in ERA tests). The comparison of emotional intelligence and ERA with respect to negotiation outcomes can therefore inform a deeper understanding of the construct and predictive validity of these affective abilities. Based on previous research, we thus predict:

H1: Higher emotional intelligence is associated with higher joint gains.

H2: Higher emotional intelligence is associated with higher gains of the counterpart.

H3: Higher ERA is associated with higher joint gains.

H4: Higher ERA is associated with higher individual gains.

As described earlier, higher cognitive ability is expected to lead to higher joint gains through better information acquisition and higher decision making soundness (Fulmer &

Barry, 2004). Participants with a high level of cognitive ability should learn faster in the course of the negotiation that the topics discussed differ in their value for the two negotiators and that gains can be increased for both partners by trading off those issues. One could assume that these processes also provide the intelligent negotiator with the ability to persuade the other party to accept their offers by providing better arguments and consequently, to

153 increase their individual gains. However, there is some evidence that joint gains are increased by means of increasing the individual outcome of the negotiator with the lower cognitive ability (Fulmer & Barry, 2004, Barry & Friedman, 1998). This suggests that a) high cognitive ability in one partner can compensate for the other partner and b) that intelligent negotiators might not be able (or do not intend) to claim more value for themselves. Thus, we

hypothesize:

H5: Cognitive ability is associated with higher joint gains.

H6: Cognitive ability is associated with higher individual gains of the counterpart.

As suggested in the literature, high emotional intelligence should have an important influence on relational negotiation outcomes. For example, Foo et al. (2004) proposed that focusing on the other person’s interests and affective state, maintaining composure, and avoiding premature judgments should lead to a more rewarding negotiation experience for both negotiators. Similarly, Fulmer and Barry (2004) argued that emotionally intelligent negotiators’ use of emotional tactics and their ability to induce emotions in others help establishing rapport with the other party which should increase their likeability and trustworthiness. This idea was empirically supported by Mueller and Curhan (2006) who found that high emotional intelligence negotiators induced positive mood in their

counterparts, leading to higher outcome satisfaction. Recently, Kong et al. (2011) suggested that high emotional intelligence individuals are successful in achieving relational outcomes because they have a chronically high relational self-construal (RSC). RSC describes the cognitive representation of the self as being fundamentally connected to other people and includes cognitive consequences (e.g., focusing on the similarity with others), emotional consequences (expressing positive emotions that enhance the relationship), and motivational consequences (using behaviors that foster interpersonal connections such as disclosure of one’s feelings and interests, desire to help others attain their goals; Gelfand et al., 2006).

154 Based on this research, we expect that individuals high in emotional intelligence will describe their behavior during the negotiation as being oriented towards the other person’s well-being and as being cooperative. At the same time, these individuals should be perceived as more cooperative and be liked better by their counterparts. Further, the atmosphere during the negotiation should be more friendly and relaxed if at least one negotiator is high in emotional intelligence. Thus, we hypothesize:

H7: Higher emotional intelligence is related to higher self-ratings of cooperative and other-oriented behavior.

H8: Higher emotional intelligence is related to higher cooperativeness/ likeability ratings given by the counterpart.

H9: Higher emotional intelligence is related to ratings of a more friendly and relaxed atmosphere by both negotiators.

With respect to ERA, we expect similar relationships with relational negotiation outcomes due to its link with emotional intelligence. Previous research (e.g., Davis & Kraus, 1997; Hall et al., 2009) has shown that ERA or interpersonal sensitivity is related to positive adjustment, higher empathy, and higher self-monitoring including its three components of extraversion, acting, and other-directedness. This suggests that in a negotiation context, individuals high in ERA should focus on the other person’s feelings and interests and be able to contribute to a more positive negotiation experience. Further, Davis and Kraus (1997) reported that individuals with high ERA were rated as more interpersonally sensitive and as more trustworthy by acquaintances. Hence, it is plausible to assume that high ERA would also favorably influence relational outcomes in a negotiation context such as being rated as more likeable and cooperative. Thus, we hypothesize:

155 H10: Higher ERA is related to higher self-ratings of cooperative and other-oriented behavior.

H11: Higher ERA is related to higher cooperativeness/ likeability ratings given by the counterpart.

H12: Higher ERA is related to ratings of a more friendly and relaxed atmosphere by both negotiators.

As for cognitive ability, we do not expect any effect on self-rated and perceived cooperativeness, because the construct does not a priori include an interpersonal component allowing for any predictions in terms of RSC or other-directedness. However, the means by which intelligent negotiators are assumed to increase economic gains might also have relational consequences. For example, if intelligent negotiators are faster and better at

acquiring knowledge about their own and other’s intentions and make better strategic choices from which both negotiators benefit (e.g., proposing package deals), they might appear more competent and professional to their counterpart. Previous research has shown that controlling a conversation, displaying confidence, and mentioning accomplishments are behaviors associated with the formation of competence impressions (Godfrey, Jones, & Lord, 1986).

Especially in negotiation, these behaviors might occur more frequently in intelligent individuals as this task specifically requires the demonstration of problem-solving and decision-making abilities. The successful application of these abilities might also lead to a more pleasant and rewarding negotiation experience in both negotiators. Thus, we predict:

H13: Higher cognitive ability is positively related to higher competence/

professionalism ratings given by the counterpart.

H14: Higher cognitive ability is related to ratings of a more friendly and relaxed atmosphere by both negotiators.

156 In addition to these hypotheses, we examined three additional variables that might influence the results: Gender, interaction effects of the ability levels of both negotiators, and negotiation role. A priori, we expect all hypotheses to be valid for both men and women, as in the studies examining emotional intelligence, ERA, and cognitive ability in negotiation no gender differences were found (Elfenbein et al., 2007; Mueller & Curhan, 2006; Foo et al., 2004; Fulmer & Barry, 1998). However, other studies in the field have shown that

negotiations between females resulted in lower joint gains than negotiations between males (Kray, Thompson, & Galinsky, 2001). Further, men were found to set higher goals and to report greater confidence in negotiation as well as higher relational capital after the

negotiation (Curhan & Brown, 2011). Researchers have also suggested that women have a generally higher level of RSC, whereas men tend to be more concerned with maximizing their outcomes (Gelfand et al., 2006, Thompson, 1990). The assumptions that women are higher in RSC and that higher emotional intelligence comes along with higher RSC (Kong et al., 2011) are in line with the well-demonstrated female advantage in interpersonal sensitivity (Hall &

Matsumoto, 2004). As gender is likely to influence some of the independent variables (ERA, emotional intelligence) and the dependent variables (economic and relational outcomes) in our study, it might also affect the relationships between these variables. This has not explicitly been tested in previous studies. We therefore decided to examine gender interaction effects for all hypotheses made above.

Furthermore, we also tested interaction effects between the respective ability measures of the two negotiators to examine whether effects are different depending on the composition of the dyads. For example, it could be that it is more beneficial for the gains of a dyad if only one negotiator has high emotional intelligence as opposed to when both negotiators are highly emotionally intelligent. In the latter case it might be that negotiators neglect economical goals and focus too much on relational outcomes (“relational sacrificing”, Gelfand et al., 2006).

157 Finally, we also considered the two roles in our negotiation task as potential sources of different results regarding our hypotheses. Previous research suggests that the roles in our exercise (employee versus recruiter, see below) are associated with typical “scripts” of behavior that negotiators tend to pursue, e.g., the recruiter leading the flow of offers (Elfenbein et al., 2007). Thus, our postulated relationships between cognitive and affective abilities and economic negotiation outcomes might differ by role. Role differences have also been found in negotiation studies examining face threat sensitivity and positive affect as predictors of economic gains (Anderson & Thompson, 2004; White, Tynan, Galinsky, &

Thompson, 2004). Negotiator role might also affect the association between abilities and relational outcomes. For example, Schmid Mast, Jonas, Cronauer, and Darioly (2012) found that participants that were more interpersonally sensitive had more satisfied subordinates when they were randomly assigned to the role of the leader in an interpersonal interaction.

7.3.2 Method 7.3.2.1 Participants

One hundred and thirty students (66 male) from various disciplines at the University of Geneva and other colleges participated in this study for payment which was partly based on their performance in the negotiation (see below). Age ranged from 18 to 35 with a mean of 23.46 (SD=4.04). All participants were native French speakers.

7.3.2.2 Procedure

Participants who replied to flyers and posters distributed at the University of Geneva were contacted by phone and were asked to provide some demographic variables (gender, age, profession/study domain). Based on this information, we invited participants in randomly created pairs matched on gender and age (maximum two years of age difference) to come to our laboratory. When possible, we avoided inviting pairs from the same study domain to make sure that participants would be unacquainted. Of the 65 pairs, 33 were male and 32 were

158 female. For one female dyad, participants reported knowing each other quite well, and for one male dyad participants said they knew each other “a little bit”. These participants were

retained in the sample.

In the laboratory, participants were seated in separate rooms where they received the negotiation instructions. The negotiation task was a French translation and adaption of the

“New Recruit” exercise that has been widely used in research (Pinkley, Neale, & Bennett, 1994). In this task, participants discuss the terms of a work contract consisting of eight issues such as salary, vacation days, moving expenses reimbursement, etc. (see Appendix A for details). Participants were randomly assigned to the role of the employee or the human resources manager. They both received the information that the employee had been working in the company for many years and that he or she wished to be transferred to another division – a transfer which had already been approved by the management. This was done to make the employee and human resource manager roles more equivalent in terms of power. For the sake of better readability and consistency with previous studies, the human resource manager will be referred to as “recruiter” in the remainder of the article.

Instructions further included the payoff schedule for the respective role (see Appendix A) which described how many points the participant would win for each of the five options for agreement per issue. Two of the issues were distributive (salary and starting date), meaning that the potential gains of the two parties were diametrically opposed. Two issues were compatible (city and department), meaning that participants earned the same amount of points for each possible option. The remaining issues (insurance, vacation, bonus, and moving expenses reimbursement) were logrolling issues in which participants had interests that were opposed, but had different values for each participant, allowing for integrative agreements by trading off more and less important issues.

159 Participants were instructed to win as many points as possible, as their gains would be converted into money. They would not receive any payment for the negotiation if they did not reach an agreement within 30 minutes and were also told not to show their payoff schedule to the other person. After reading these instructions, participants had the possibility to ask questions to the experimenter. Then, participants were escorted into a different room where they were seated face to face (the chairs were placed at an angle of about 120 degrees from each other to allow frontal video recordings) with a small side table between them. The negotiation was audio- and video-recorded, with the experimenter not being present in the room. Upon reaching an agreement, participants signed a “contract” with the options that they chose for each issue. After 25 minutes of negotiation, the experimenter reminded the

negotiators that they had 5 minutes left. All dyads except for one reached an agreement within 30 minutes. The pair that reached an impasse was excluded from the analyses.

After the negotiation, participants immediately completed a post-negotiation questionnaire (see Appendix B) before learning about how many points they and their counterpart had gained and who had won the negotiation. Prior to the laboratory session, participants completed the Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT;

Mayer, Salovey, Caruso, & Sitarenios, 2003) and other questionnaires online. During the laboratory session, they completed the Geneva Emotion Recognition Test (GERT; Schlegel, Grandjean, & Scherer, 2012) and the NV5R “general reasoning” test (Thiébaut & Bidan-Fortier, 2003) ¹⁰.

10 The study included other measures taken in the context of the negotiation and tasks at the laboratory which will be not discussed here in detail. These include other questionnaires and tests, hormonal measures (testosterone and cortisol), physiological measures (respiration, heart rate, skin conductance), a face perception task to measure sensitivity to subliminally presented emotional facial expressions with electromyography, and an injustice manipulation in which participants received less or more money than they were expecting after the negotiation. More information can be found in Bediou, Koban, Mehu, van Peer, Sacharin, & Schlegel (2011):

Negotiation and EMOtion (NEMO): An interdisciplinary study on individual differences in social and emotion skills in relation to behaviour and success in interpersonal negotiation. Unpublished document.

160 7.3.2.3 Measures

Economical negotiation outcomes. We calculated the individual gains of each participant (value claimed) as the total number of points that the participant earned and the joint gains (value created) of each dyad as the sum of the recruiter’s and employee’s individual gains.

Geneva Emotion Recognition Test (GERT, Schlegel et al., 2012). The GERT is a test to measure individual differences in ERA and includes 14 emotions (positive emotions: pride, joy, amusement, pleasure, relief, interest; negative emotions: anxiety, fear, despair, sadness, disgust, irritation, and anger; and surprise which can be positive or negative). Participants are presented 83 short video clips with sound in which actors express one of the 14 emotions and are asked, after each clip, to select the emotion term that describes best the emotional

expression in the clip. We used the GERT total score to evaluate our hypotheses, but conducted exploratory analyses for the recognition of positive versus negative emotions as well. These two scores were calculated using the unbiased hit rate which corrects for participants’ response tendencies towards each emotion category (for more details, see Wagner, 1993).

Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT, Mayer et al., 2002).

The MSCEIT consists of 141 Items that measure four branches of emotional intelligence (Perceiving Emotions, Facilitating Thought, Understanding Emotions, Managing Emotions) using eight different tasks such as identifying emotions from abstract pictures, evaluating how moods impact thinking, and indicating the effectiveness of different solutions to problems.

The MSCEIT yields scores for each branch and an overall emotional intelligence score.

NV5R (Thiébaut & Bidan-Fortier, 2003). This battery of tests measures cognitive aptitudes in young adults. We administered the general reasoning subtest which measures inductive and deductive reasoning with numeric, spatial, and lexical content.

161 Post-negotiation questionnaire. The post-negotiation questionnaire (PNQ) was

developed specifically for this study and measured participants’ evaluations of the negotiation situation, their own behavior, and their counterpart. It was based on a questionnaire used by Brackett et al. (2006) to evaluate social competence after a social interaction. The PNQ can be found in Appendix B. In order to create scales of relational negotiation outcomes, we ran a Principal Components Analysis (PCA) on the three subsets of items in which participants evaluated a) their own behavior during the negotiation (14 items), b) the atmosphere during the negotiation (five items), and c) the behavior of their counterpart (14 items). Based on the results of the PCA we calculated the following variables for each participant: 1)

cooperativeness rating (Items 7, 8, 9, 12, 14, 15, 17, 18, 20), 2) competitiveness self-rating (Items 11, 13, 16, 19), 3) atmosphere self-rating (Items 21 to 25; Items 22, 24, 25 were reversed), 4) cooperativeness/likability rating for the counterpart (Items 27, 28, 29, 31, 32, 35, 39), 5) competence/ professionalism rating for the counterpart (Items 26, 34, 37, 28), and 6) competitiveness rating for counterpart (Items 30, 33, 36). In this article, we only considered self- and other ratings of cooperativeness, other-rated professionalism, and atmosphere to keep the number of hypotheses and the presentation of results as manageable and concise as possible.

7.3.2.4 Data analysis

In order to evaluate hypotheses 1, 3, and 5 (effects of emotional intelligence, ERA, and cognitive ability on joint gains) we ran multiple regressions with the joint gains of the 64 pairs as the dependent variable and the following independent variables: gender, the

respective test scores for the employee and recruiter (GERT mean score, MSCEIT mean

respective test scores for the employee and recruiter (GERT mean score, MSCEIT mean