The prospect of negotiating: Stress, cognitive appraisal, and performance

Journal of Experimental Social Psychology 46 (2010) 729–735

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Journal of Experimental Social Psychology journal homepage: www.elsevier.com/locate/jesp

The prospect of negotiating: Stress, cognitive appraisal, and performance Kathleen M. O’Connor a,*, Josh A. Arnold b,c, Andrea M. Maurizio a a

The Johnson School, Cornell University, USA College of Business Administration, California State University, Long Beach, USA c Department of Management, City University of Hong Kong, Hong Kong, China b

a r t i c l e

i n f o

Article history: Received 20 June 2008 Revised 16 March 2010 Available online 20 April 2010 Keywords: Conflict Negotiation Stress Cognitive appraisal Performance Fear Anxiety Emotion

a b s t r a c t Despite a significant literature on the impact of stress on performance in achievement settings, little is known about whether and how stress might matter for would-be negotiators. In two studies, we investigate how bargainers cognitively appraise a looming negotiation, whether its prospect is stressful and what the consequences are for performance. Individuals who appraised a prospective negotiation as a threat experienced more stress ahead of a negotiation, and reached lower quality deals compared to those who had appraised a challenge. Results from a follow-up experiment showed that would-be negotiators who had appraised a threat behaved more passively and were less likely to use tough tactics compared to those who appraised a challenge. Those who appraised a threat also had relatively inaccurate perceptions of their partners’ priorities and interests, which undermined their outcomes. The outcome advantage for those who appraised a challenge was limited to negotiations that contained integrative potential. Ó 2010 Elsevier Inc. All rights reserved.

Anticipating a performance can be quite stressful for people. For example, just before delivering a public speech, it is not unusual for people to experience a spike in their level of reported stress (Feldman, Cohen, Hamrick, & Lepore, 2004; Skinner & Brewer, 2002). In fact, a meta-analytic findings have shown a significant rise in pre-performance stress as measured by cortisol responses for a wide range of motivated performance tasks (Dickerson & Kemeny, 2004). These include cognitive tasks (e.g., mental arithmetic and Stroop tests), verbal interaction tasks (e.g., interviews), as well as public speaking occasions. What these tasks have in common is that they are motivated performance tasks that are marked by (1) uncontrollability of the task outcome, and (2) the potential for social evaluation. When tasks have these features, the cortisol responses that accompany stress increase. Negotiation exchanges share these features, leading us to propose that the prospect of a negotiation is likely to serve as a stressor for would-be bargainers. Specifically, the interdependent nature of negotiations means that the outcomes are not solely within either party’s control. So, too, do negotiations carry the possibility for social evaluation. Even when negotiations are conducted between the principles, the outcomes are known to one’s partner, opening up the possibility for the negotiator to be judged negatively. We would expect, then, that would-be negotiators

* Corresponding author. Address. The Johnson School, Sage Hall, Cornell University, Ithaca, NY 14853, USA. E-mail address: [email protected] (K.M. O’Connor). 0022-1031/$ - see front matter Ó 2010 Elsevier Inc. All rights reserved. doi:10.1016/j.jesp.2010.04.007

would experience the rise in stress that has been documented for tasks that share its features. In the first of two studies, we test whether pre-negotiation stress and cognitive appraisal have any effect on the quality of deals negotiators reach. In Study 2, we manipulate cognitive appraisal, allowing us to draw stronger conclusions about whether cognitive appraisal directs outcomes. Moreover, we test the mechanisms through which cognitive appraisal shapes outcomes. Finally, we manipulate the structure of the negotiation task to delineate the scope of the effects. We aim to make three contributions. First, we extend work on stress and cognitive appraisal (Blascovich & Tomaka, 1996; Lazarus & Folkman, 1984) by examining whether and how it operates in interdependent settings. Second, by showing that for some the mere prospect of negotiating can trigger stress and fear, we make a case for studying these naturally occurring experiences and emotions and their effects in negotiation. Finally, we demonstrate that the way in which negotiators cognitively appraise a looming interaction shapes the direction their negotiations take, with significant consequences for the quality of deals they reach. Stress, cognitive appraisal, and negotiation The psychological study of stress stretches back over nearly 100 years and has been marked by vigorous discussions around its proper definition (McGrath, 1976). Selye (1936) defined stress as the ‘‘nonspecific (that is common) result of any demand upon

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the body, be the effect mental or somatic” (p. 3). McGrath (1976) defined stress broadly, arguing that it involves an interaction between a person and his/her environment. Lazarus and Folkman (1984) further defined stress as ‘‘a relationship between the person and the environment that is appraised by the person as taxing or exceeding his or her resources and endangering his or her wellbeing” (p. 21). While quite broad, these definitions clearly point to stress as an outcome for individuals who face taxing situational demands. In this way, stress is perceptual, and, for any given situation, is likely to vary from person to person. Theoretical and empirical research point to a robust source of variation in stress—the judgments people make about the situations they face and whether they have what it takes to manage them. Specifically, the degree to which people will experience stress at the prospect of a performance situation depends on two judgments: (1) their cognitive appraisal of the demands of the situation and (2) whether they believe they have the resources to cope with the situation (e.g., Folkman, Lazarus, Gruen, & DeLongis, 1986; Lazarus & DeLongis, 1983; Lazarus & Folkman, 1984). Judgments about what the situation demands are part of what is called primary appraisal, and judgments about whether one has the resources to meet the demands are known as secondary appraisal. Together, these determine whether people appraise a situation as a threat or a challenge (Blascovich & Tomaka, 1996; Lazarus & Folkman, 1984). When people see their skills as falling short of the task demands, they are likely to see the situation as more threatening than when they believe they have the skills and resources to meet the demands. How people cognitively appraise a performance situation matter for how much stress they experience, with threat appraisals associated with higher levels of stress than challenge appraisals (Tomaka, Blascovich, Kelsey, & Lietten, 1993).

were male. Many of these participants were part-time students with job experience and this is reflected in their demographics. Their average age was 24.8 years (SD = 6.6). The average number of years of full-time work experience was 4.4 (SD = 7.1), and part-time work experience was 3.6 (SD = 2.9). Students had not completed a negotiation course, and can be considered novices. Participants were given brief background information on a negotiation related to a class trip and project (see O’Connor, Arnold, & Burris, 2005). They also received a payoff schedule that presented the six issues to be negotiated, the potential settlement levels for each issue, and the points associated with settlement at each level (see Appendix A). The negotiation included the following issues: the number of sites to be visited, the location of the sites, course project (assignment), budget, mix of businesses, and timing of trip (week). Location, budget, and timing were distributive issues, with both parties placing equal value on these issues. Number of sites and mix of businesses were integrative issues, meaning the parties had different priorities for these two issues. Trading concessions on lower priority issues for gains on higher priority issues allows negotiators to create more value than if they had simply split the difference on these issues. This negotiation, then, had integrative potential. Finally, course project (assignment) was a compatible issue, wherein parties preferred the same outcome. We randomly assigned participants to represent a group of students with an academic focus on business strategy or a group with a focus on entrepreneurship. As Appendix A makes clear, if a negotiator were to claim the maximum number of points on each issue, he/she would receive 1380 points. If he/she split the difference on the issues, taking half the value on each issue, the deal would be worth 690 points. We did not give negotiators any minimum price, thereby maximizing variance on negotiation outcomes. Parties had 35 min to negotiate.

Study 1

Measures Before the negotiation, participants completed a questionnaire that included items measuring cognitive appraisal, stress, and fear. Drawing on existing measures (e.g., Tomaka et al., 1999), we used three 9-point items to assess primary appraisal, ‘‘How demanding is the upcoming negotiation going to be?” (0 = not at all, 8 = very much), ‘‘How threatening do you expect the upcoming negotiation to be?” (0 = not at all, 8 = very much), and ‘‘The upcoming negotiation is very demanding” (0 = strongly disagree, 8 = strongly agree). We averaged these items to form a primary appraisal index (a = .88). Three 9-point items comprised secondary appraisal: ‘‘How able are you to cope with the upcoming negotiation?”, ‘‘Do you have the ability to deal with the upcoming negotiation?”, and ‘‘Can you cope with the upcoming negotiation?” We averaged these items to calculate a secondary appraisal index (a = .95). To assess cognitive appraisal, we calculated a ratio of primary to secondary appraisals, as is common practice (Tomaka, Blascovich, Kibler, & Ernst, 1997; for review, Blascovich & Tomaka, 1996). Higher ratios indicate greater threat appraisals. We measured momentary situational stress about the upcoming negotiation by asking participants, ‘‘To what extent do you feel stressed about the negotiation?” (0 = not at all, 8 = very much) (see Bono, Foldes, Vinson, & Muros, 2007). Because feelings of stress and fear tend to co-occur (Raffety, Smith, & Ptacek, 1997), we also asked, ‘‘To what extent do you feel fearful?” (0 = not at all, 8 = very much). We combined these two items to form a stress index (a = .71). For each negotiator, we summed the number of points he/she received in the deal.

When negotiations loom, we expect that would-be negotiators who believe they have the skills, abilities, and personal resources that the negotiation will demand will appraise the upcoming situation as a challenge. In contrast, individuals who do not think they have what it takes to negotiate will appraise a threat. In keeping with current theories of stress and appraisal, we expect that as threat appraisals increase, reported stress also will increase (H1). Cognitive appraisal of a performance situation also carries implications for people’s chances for success (Drach-Zahavy & Erez, 2002). Indeed, meta-analytic results show that challenge appraisals are more likely to be associated with successful performance than threat appraisals (LePine, Podsakoff, & LePine, 2005). For example, in a sample of collegiate athletes, those who appraised their upcoming season as a threat performed poorly compared to those who appraised the season as a challenge (Blascovich, Seery, Mugridge, Norris, & Weisbuch, 2004). Similarly, studies have shown that people who appraise a public speaking situation as a challenge outperform those who see the looming speech as a threat (Feldman et al., 2004). We expect a similar pattern of results here for cognitive appraisal and performance. That is, as threat appraisals increase, negotiators’ outcomes will decrease in value (H2). Finally, we hypothesize that stress will mediate the relation between cognitive appraisal and outcomes (H3). Negotiators who appraise a threat will experience greater stress, and this stress will have direct and negative effects on outcomes. Method

Analytic strategy Participants and procedure 138 undergraduate students enrolled in an introductory management course participated for course credit. Sixty-three (45.7%)

For measures collected before negotiations begin (e.g., stress), it is appropriate to conduct analyses at the individual level. However,

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once negotiations start, partners become interdependent as their choice of tactics and their outcomes are responsive to what the other has done. These data interdependencies create several analytical challenges (Kenny, 1996; see also Turel, 2010). Ignoring these characteristics of the data can affect tests of significant (by producing biased standard errors) and lead to erroneous inferences (Kenny & Judd, 1986, 1996). Statistically speaking, dyads constitute a special case of hierarchically structured data, with individual negotiators nested within dyads. Multilevel models can be used to account for the interdependence between members of dyads. Such models are a set of regression estimation techniques applied to data organized into hierarchically structured clusters (Bryk & Raudenbusch, 2002; Snijders & Bosker, 1999). Multilevel analysis combines the effects of variables at different levels (individual and dyadic) into a single model, while accounting for the interdependence among observations within higher-level units. In this paper, we estimated a multilevel random intercept regression model (using STATA’s xtreg command). Results and discussion Table 1 shows the means, standard deviations, and correlations among the study variables. As we predicted in H1, the greater the appraisal of negotiation as a threat, the greater the stress the individual reported experiencing before the negotiation (b = 2.89, t(136) = 9.04, p = .0001, R2 = .37). In H2, outcomes are interdependent, and thus, we use a multilevel random intercept regression model to test this hypothesis. As we predicted in H2, as threat appraisals increased, outcomes suffered (b = 170, z(127) = 4.98, p < .001, R2 = .16). We hypothesized (H3) that stress would mediate the relation between cognitive appraisal and outcomes. Following the recommendation of Shrout and Bolger (2002), we used bootstrap methods to test for mediation (or indirect) effects (see Preacher & Hayes, 2004). Bootstrapping results, based on 20,000 bootstrap samples, indicated that the mean mediation effect from cognitive appraisal through stress was not significant (z = 1.39, ns), meaning that stress did not mediate the relation between cognitive appraisal and outcomes. Results support our claim that how would-be negotiators appraise a prospective negotiation carries consequences for how stressed they feel and, ultimately, for the quality of deals they reach, with growing threat appraisals undercutting outcomes. Despite the strong link between cognitive appraisal and reported stress, however, stress did not mediate the impact of appraisal on outcomes, which means that other factors must be at work. In the next study, we investigate the mechanism that accounts for the impact of appraisal on outcomes. Specifically, we test how appraisal influences negotiators’ tactical behavior, their level of engagement in the negotiation, their insight into their partners’ interests, and their economic outcomes. Additionally, in Study 2 we manipulate cognitive appraisal, enabling us to make stronger causal claims. We also manipulate the task structure to test the boundary conditions of the effects we identify.

Table 1 Study 1: means, standard deviations, and correlations among the study variables.

1 Challenge/threat 2 Stress 3 Individual outcomes

M

SD

0.73 2.17 835

(.33) (1.60) (143)

Note: n P 128, 0 = challenge, 1 = threat. ** p < .01.

1 .61** .41**

2

.22**

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Study 2 Classic work on threat has characterized responses to stress from both a physiological and behavioral perspective as ‘‘fightor-flight” (Cannon, 1932). Depending on how individuals size up the threat they face, they can stay and fight the threat or they can exit. While the physiological manifestations of reactions to threat are well documented (Taylor et al., 2000), fight-or-flight also has been adopted as a metaphor for explaining human reactions to stressful situations. Negotiation researchers typically focus their analyses on negotiators’ decisions to use tactics aimed at growing the available resources (i.e., integrative tactics) and/or to use tactics aimed at collecting the greater share of resources (i.e., distributive tactics) (e.g., Pruitt, 1981; Putnam, 1990). Both sets of tactics require negotiators to be actively engaged in the negotiation, making offers, advancing their interests, responding to partners, and so on. Emphasizing these kinds of active tactics has meant that negotiators’ tendency to disengage from a negotiation (that is, flee) is rarely studied. Yet, negotiators’ beliefs in their abilities are likely to influence their level of engagement in the negotiation (Nes, Segerstrom, & Sephton, 2005). Specifically, these judgments should influence whether, in the face of a threat, negotiators actively engage in the negotiation, pursuing the tactics we describe above (‘‘fight”), or whether they take a more passive approach, choosing to ‘‘flee” from the exchange. We speculate that the fight response at the bargaining table will take the form of using tougher, more confrontational (i.e., distributive) tactics aimed at gaining leverage over the other side, and maximizing one’s own gains. Thus, we would expect that some negotiators who appraise a threat will use more distributive tactics than those who appraise a challenge. As we noted above, estimates of the size of the threat determine whether individuals fight or flee. Because these estimates will vary from person to person, we cannot say with certainty which threatened negotiators will choose to flee and which will fight. Rather, we simply predict that when negotiations are appraised as threatening, negotiators will be comparatively more likely to take either a passive approach to the negotiation (H4) or to use distributive tactics relative to negotiators who appraise a challenge (H5). Distributive tactics aimed at forcing the other side to make concessions can be quite effective for gaining a greater share of the resources, particularly if the one using the tactics enjoys a power advantage (Pruitt, 1981). However, if parties are equally matched, then there is little reason for the partner to concede, making the tactics ineffective. Moreover, relying on these tactics can prevent negotiators from understanding one another’s underlying interests, depressing their outcomes when there is opportunity to make profitable trades. Similarly, we would expect that negotiators who take a more passive approach to the negotiation would be less likely to rely on the kinds of tactics useful for creating mutually beneficial deals. Thus, regardless of whether exchanges are marked by more distributive or more passive tactics, we expect negotiators who report greater initial threat to develop less accurate insights into their partners’ priorities (H6). Consequently, negotiators in the threat condition will reach lower value deals compared to those in the challenge condition (H7). Insight will mediate the link between appraisal and outcomes (H8). We also investigate the extent to which these effects are limited to negotiations that carry integrative potential. Our conceptual model holds that threat appraisals prevent negotiators from recognizing the integrative potential that often exists in negotiation tasks. Failing to appreciate the underlying structure of the issues can interfere with negotiators’ ability to reach high quality deals. Thus, we hypothesize that negotiators who appraise a challenge

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should outperform those who appraise a threat, though this advantage should hold only when the task contains integrative potential (H9). Method Participants and procedure One hundred and ninety-six undergraduate students in a large introductory management course volunteered to participate in the study. Their average age was 22.2 years (SD = 2.8) and they had 1.4 years of full-time (SD = 2.8), and 3.8 years of part-time (SD = 2.2) work experience. 54% (106) were women. Five dyads did not reach an agreement and were dropped from the analysis. The study design was a 2 (task structure: distributive, integrative)  2 (cognitive appraisal: challenge, threat). Participants were randomly assigned to play the role of a representative for a group of international strategy majors or a group of entrepreneurship majors, negotiating over five issues related to a class trip and project: number of sites to be visited, course project, budget, mix of businesses, and timing of trip. Participants had 30 min to negotiate. In both task structure conditions, participants were given the same materials, with one exception. In the distributive structure condition, the issues were all distributive, meaning that a gain for one was a loss for the other, and there were no opportunities to trade low-cost concessions. In the integrative structure condition, the issues were integrative, allowing negotiators to make tradeoffs across the issues (see Appendix B). For instance, parties valued number of sites and the mix of businesses differently, allowing each side to do better if they traded concessions on the issue they valued less than if they had simply split the difference. In both conditions, the maximum number of points that a party could achieve was 1160. Participants also were randomly assigned to the two cognitive appraisal conditions. After participants read about the negotiation, they were given a sheet entitled, ‘‘Important Lessons from Past Experience.” This sheet contained the appraisal manipulation. It purportedly provided advice from students who had participated in the same negotiation in a past semester. We manipulated both primary (situational demands) and secondary (controllability of the situation) appraisals (see Drach-Zahavy & Erez, 2002; Tomaka et al., 1997). In the challenge appraisal condition, participants read information that emphasized past success on the task and noted that the task was not particularly difficult (see Appendix C). In addition, participants read that past students attributed their success in the negotiation to hard work, determination, and persistence. In the threat appraisal condition, participants read information that emphasized that the task was particularly difficult and that students attributed their success to special negotiation training, superb people skills, and luck. Measures Pre-negotiation questionnaire items included manipulation checks of cognitive appraisal. Just as we had done in Study 1, we used three items to measure primary appraisals (a = .75) and three items to measure secondary appraisals (a = .88). We calculated a ratio of primary to secondary appraisals with high ratios indicating threat appraisals and low ratios indicating challenge appraisals. The pre-negotiation questionnaire also measured stress and fear (a = .66). Following the negotiation, negotiators provided retrospective judgments of their partners. Specifically, they evaluated their partners on four behavioral dimensions: the extent to which the focal negotiator was aggressive, competitive, passive, and tough (1 = not at all, 7 = extremely). Because the items aggressive, competitive, and tough measured a similar underlying construct (a = .80), we created an index of these retrospective items, labeled ‘‘competi-

tiveness.” Negotiators also reported on their partners’ tactics using 7-point scales (1 = not at all, 7 = extremely). Participants noted the extent to which their partners used distributive tactics: (1) the focal negotiator prevented him/her from exploiting his/her weakness, (2) the focal negotiator tried to gain the upper hand against him/her, and (3) the focal negotiator persuaded him/her to make the most of the concessions (Sullivan, O’Connor, & Burris, 2006). We combined these three items into a distributive tactic index (a = .63). Participants also judged the extent to which their partners used integrative tactics, including (1) the focal negotiator asked questions about his/her points and priorities among issues, and (2) the focal negotiator made creative suggestions for making tradeoffs (Sullivan, O’Connor, & Burris, 2006). We combined these two items into an integrative tactic index (a = .58). After the negotiation was completed, participants received a blank payoff schedule that listed the issues and levels, but did not contain the points associated with each issue and level. Rather, there were blanks. Participants were instructed to fill in the points as they believed they appeared on their partners’ payoff schedule (see de Dreu, Koole, & Sander, 2000; Pietroni, Van Kleef, De Dreu, & Pagliaro, 2008; Thompson & Hastie, 1990). We calculated insight by taking the absolute value of the difference between the number of points attributed to each of the five levels for the five issues and the actual value of the level. The greater the score, the less accurate the judgment of the partners’ points, the lower the insight. Finally, we summed the points that each party received for each of the five issues to create an individual outcome score. Results and discussion Table 2 shows the means, standard deviations, and intercorrelations among the study variables. The manipulation check was successful, as participants assigned to the challenge condition appraised their skills as exceeding the demands of the task (M = .82, SD = .41) to a greater degree than did those in the threat condition (M = .92, SD = .41), F(1, 187) = 3.61, p = .06, g2 = .02. We also tested whether our manipulation had the unintended consequence of manipulating positive expectations or the motivation to perform well. There were no differences in mean responses between the two conditions for items asking how successful participants expected to be (challenge: M = 3.29, SD = .89; threat: M = 3.21, SD = .89), or how hard they planned to work to reach a deal that meets their needs (challenge: M = 5.99, SD = .84; threat: M = 6.08, SD = .95), or in how much they wanted to get the best possible deal for their side (challenge: M = 6.56, SD = .68; threat: M = 6.47, SD = .81). Consistent with H1, before the negotiation, participants assigned to the challenge condition experienced less stress ahead of the negotiation (M = 2.03, SD = 1.4) than did participants in the threat condition (M = 2.50, SD = 1.7), F(1, 187) = 4.28, p < .05, g2 = .02. Given the interdependent nature of the interaction, for the next set of analyses, we rely on multilevel models. Table 3 contains the Table 2 Study 2: means, standard deviations, and correlations among the study variables.

1 2 3 4 5

Stress Passive tactics Distributive tactics Insight Outcomes

M

SD

2.26 3.60 4.04 2346 655

(1.56) (1.54) (1.01) (569) (140)

Note: n P 70. 1 = challenge, 2 = threat. t p = .10. * p < .05. ** p < .01.

1 .13t .18** .14 .04

2

.22** .26* .18*

3

4

.03 .15*

.18

K.M. O’Connor et al. / Journal of Experimental Social Psychology 46 (2010) 729–735 Table 3 Study 2: means and standard deviations for the study variables in each of the cognitive appraisal conditions.

Passivity Distributive tactics Competitive Insight Outcomes

Threat

Challenge

3.83 (1.47) 3.84 (1.06) 3.62 (1.31) 2499 (462) 643 (129)

3.41 (1.59) 4.27 (.93) 3.98 (1.23) 2169 (633) 666 (150)

Note: n P 70.

means and standard deviations for the study variables across the two cognitive appraisal conditions. Tactical analysis showed that negotiators in the challenge and threat conditions differed in their passivity, as we had predicted. Results from the multilevel analyses showed that negotiators in the threat condition were seen as more passive than were those in the challenge appraisal condition, (b = .42, z(177) = 1.85, p = .06, R2 = 02). However, contrary to our hypothesis, negotiators in the threat condition did not rely more heavily on distributive tactics. Rather, negotiators in the challenge condition used significantly more distributive tactics (b = .42, z(178) = 2.68, p = .01, R2 = .04). In addition, they were seen by their partners as more competitive than were those in the threat condition (b = .35, z(177) = 1.73, p = .08, R2 = .02), though this effect was modest. Given their tendency to rely on more passive tactics, we hypothesized that negotiators assigned to the threat condition would be more inaccurate in their post-negotiation perceptions of their partners’ preferences and priorities compared to negotiators in the challenge condition (H6). This was the case, (b = 330, z(71) = 2.53, p = .01, R2 = .09). According to H7, negotiators in the challenge condition should reach higher value deals than will those in the threat condition. This was not the case. However, results supported the interaction we hypothesized (H9). Specifically, we postulated that the outcome advantage for negotiators in the challenge condition would be greater when the task contained integrative potential than when it did not. Results showed a significant and negative coefficient for the interaction between cognitive appraisal and task type (b = 49.78, z(188) = 2.27, p < .05) (Fig. 1). The negative coefficient indicates that negotiators in the challenge condition conducting a negotiation with integrative potential reached significantly higher quality deals (M = 748, SD = 110) than those in this task condition who had appraised a threat (M = 708, SD = 140). When the task did not have integrative potential—that is, when it was purely distributive—cognitive appraisal did not have an effect on

Fig. 1. Negotiator outcomes by condition.

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individual outcomes (challenge: M = 580, SD = 132; threat: M = 585, SD = 83). We expected that insight would mediate the relation between appraisal and outcomes in the integrative negotiation condition, and results bore this out (H8). Just as we had done in Study 1, we used the bootstrap method described by Preacher and Hayes (2004) to estimate the indirect effect. Based on 20,000 samples, results showed that the mean mediation effect from cognitive appraisal through insight was significant (z = 2.34, p < .05), indicating that insight mediated the link between cognitive appraisal and outcomes. Multiple mediator analyses Results showed that insight mediates the effect of cognitive appraisal on outcomes, but this finding does not rule out the possibility that other variables might be at work as well. To determine the role that other variables may be playing, we ran a multiple mediator analysis that allows us to include several mediators at once (Preacher & Hayes, 2008). We estimated a model that included insight, stress, and passive tactics as mediators. Only insight was a significant mediator, z = 2.00, p < .05. Neither stress (z = .54, ns) nor passive behavior (z = .78, ns) played a mediating role. The results of Study 2 allowed us to test the robustness of our findings and to rule out alternative explanations for our results. By experimentally manipulating cognitive appraisal we are able to determine with greater certainty the impact that challenge or threat appraisals have in the negotiation process. In particular, we are able to pinpoint the variables that lead cognitive appraisal to affect outcomes—insight. Moreover, showing that cognitive appraisal affects outcomes in some kinds of negotiations, and not others, allows us to identify a boundary condition of this effect. The benefits of a challenge appraisal appear to be limited to negotiations with integrative potential. General discussion Negotiation exchanges share features of other kinds of tasks— public speeches and math tests, for instance—that have been shown to trigger stress. Yet, accounts of whether negotiations are a source of stress for people, and if they are, how stress might matter in negotiation are few. The present studies extended work on cognitive appraisal and stress (Blascovich & Tomaka, 1996; Lazarus & Folkman, 1984) by examining whether and how they operate in interdependent settings. Indeed, results showed that the cognitive appraisal framework is useful for predicting outcomes in interpersonal contexts. Specifically, would-be negotiators’ cognitive appraisals of a looming negotiation as a challenge or as a threat determined how much stress they experienced ahead of the negotiation, and, more importantly, shaped how well they did in the negotiation. In keeping with our hypotheses, threat appraisals were positively linked with feelings of stress and fear. Highlighting this potential source of negotiator emotion is particularly useful in light of the continuing focus on the role of emotions in negotiation (e.g., Pillutla & Murnighan, 1996; Steinel, Van Kleef, & Harinck, 2008; Van Kleef, De Dreu, & Manstead, 2004). Some of that work has focused on how positive affect affects bargainers (Anderson & Thompson, 2004; Carnevale & Isen, 1986), while much of it investigates the impact of anger on negotiators and their partners (Allred, 1999; Allred, Mallozzi, Matsui, & Raia, 1997; Sinaceur & Tiedens, 2006). By noting the role of stress and fear during the pre-negotiation phase, we broaden the range of emotions that researchers might consider as well as a potential source of naturally-occurring emotions at the bargaining table. Would-be negotiators who perceived the looming negotiation as a threat reached poorer quality deals compared to those who

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saw the negotiation as a challenge. Having documented this link between appraisal and outcomes, we went further to identify and test the mechanisms responsible for these effects in the second study. To test our causal claims, and to detail the pathways that lead appraisal to affect outcomes, we manipulated both appraisal and the structure of the task in Study 2. We drew on classic work on threat experiences (Cannon, 1932) to hypothesize that feeling threatened would translate into a fight-or-flight response in negotiators. Indeed, threatened negotiators were more passive relative to those who appraised a challenge. However, overall, those who appraised a challenge were more active in the negotiation, and this included greater use of distributive tactics. Thus, we find evidence of a flight response to threat in negotiation, but no support for the fight response. These tactics interfered with negotiators’ ability to gain insight into their partners’ priorities and preferences, and their outcomes reflected their errors in judgment, with lower outcomes among negotiators in the threat condition. Across Studies 1 and 2, then, the advantage goes to those who appraise a looming negotiation as more challenging than threatening. The strong link between threat appraisals and passivity leads us to consider whether relative disengagement in negotiation may be more common than previously thought. Whereas negotiation scholars typically focus on whether negotiators pursue more distributive (value claiming) or more integrative (value creating) strategies (Pruitt, 1981; Walton & McKersie, 1965), our findings hint that disengagement may play an important role in shaping outcomes, too. Negotiators in our study who initially felt more threatened were relatively less active during the exchange. This finding is consistent with studies that show that the lower negotiators’ confidence in their skills, the less likely they are to persist in negotiation (Arnold & O’Connor, 2006). Knowing more about the conditions under which negotiators are likely to reduce their efforts, or cut the negotiations short, or opt for another—perhaps less productive—means for dealing with their conflicts would give researchers a richer account of people’s attitudes toward negotiation, and a better sense of when they will or will not choose this option. By manipulating the task structure in Study 2, we delineated a boundary around these effects; they were present and strong for integrative tasks and not for distributive tasks. Whether negotiators appraised a challenge or a threat mattered very little for their outcomes when the task did not contain integrative potential. Because their exchanges were marked by passivity, it is not surprising that threatened negotiators did not enjoy an advantage in the distributive negotiation. It is possible, however, that in some cases—for instance, when the negotiator has a power advantage over the other side—that he or she might be more willing to fight, thus giving him or her an advantage in a distributive negotiation. Work on negotiators’ regulatory focus has shown that those who adopt a promotion focus set more ambitious goals for themselves and, consequently, reach better deals than do those who are focused on prevention (Galinsky, Leonardelli, Ohkuysen, & Mussweiler, 2005). Those foci direct whether one tends to seek positive outcomes (promotion) or to avoid negative outcomes (prevention). This work, too, is broadly consistent with our finding that one’s outlook makes a difference for one’s willingness to work hard to achieve gains at the table. However, the present studies depart from that line of research in that our questions are less about a negotiator’s general needs and how they drive behavior, and more specifically focused on negotiators’ specific cognitions about the current negotiation. Would-be bargainers assess the current situation and determine the degree to which they have the skills necessary to tackle it. Whether a negotiator appraises a challenge or a threat, we argue, is likely to depend on the particulars of the negotiation—the number of issues, time constraints, partners, for instance.

Further research To assess the flight response in negotiation, we relied on partners’ judgments of negotiator passivity. However, alternative measures of flight would be helpful for understanding what it is and how it affects the dynamics of negotiations. Flight may take the form of delaying a negotiation or talking only generally about the key issues and interests or retreating to an outside option, even when that option is relatively weak. So, too, might flight take the form of seeking third party help (Arnold & O’Connor, 2006). These negotiations were relatively low stakes, and parties had roughly the same amount of modest bargaining experience. Thus, the range of appraisals was likely rather small. With a wider range of expertise, and possibly, greater stakes, we might expect even wider differences in the emotions and experiences of those who appraise a challenge versus a threat, with even stronger effects on performance. An unanswered question here is what distinguishes individuals who appraise a challenge from those who appraise a threat. In our studies, participants were novice negotiators. Greater experience might make a difference, with experts more likely to appraise a challenge than a threat. Training, therefore, may be instrumental in getting this shift in appraisal. For instance, the kind of negotiation skills training that takes place in MBA programs boosts participants’ skills, increases confidence in their skills, and provides success experiences. These effects could go a long way toward increasing the likelihood that people appraise a looming negotiation as a challenge—one for which they have the requisite skills— rather than a threat. Further work needs to be done to unpack the sources of threat and challenge appraisals in negotiation, and to offer ways of shifting people’s appraisals from threats to challenges.

Conclusion Showing that—for some—a looming negotiation can be threatening, and a source of stress and fear, makes a strong case for studying these naturally occurring experiences and emotions and their effects in negotiation. A broader point that our results raise, though, is that as much as negotiations are described by scholars as a rather straightforward means of effectively managing conflicts, or resolving incompatible goals (Pruitt & Carnevale, 1993), to negotiators, it may not be that simple. Depending on how negotiators evaluate their own skills relative to what they believe is needed to do well, the prospect of a negotiation can be seen not as an opportunity, but as a threat. And, if this is the case, then the way people think about negotiation can undermine their chances for success before the negotiation even begins. Acknowledgments We thank Beta Mannix and Chris Anderson for their detailed comments on earlier drafts of this manuscript. We also thank members of the O&M department at Emory’s Goizueta School of Business and the Management Department at the University of Arizona’s Eller School for their questions and suggestions. Portions of this work were presented at the International Association for Conflict Management meeting in Chicago (2008). This project was supported by the Institute for Social Sciences at Cornell University.

Appendix A. Supplementary material Supplementary data associated with this article can be found, in the online version, at doi:10.1016/j.jesp.2010.04.007.

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