Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. Goals Gone Wild 1

Three studies show that negotiators consistently underestimate the size of the bargaining zone in distributive negotiations (the small pie bias) and, by implication, overestimate the share of the surplus they claim (the large slice bias). We explain the results by asymmetric disconfirmation: Negotiators with initial estimates of their counterpart’s reservation price that are “inside ” the bargaining zone tend to behave consistently with these estimates, which become self-fulfilling, whereas negotiators with initial “outside ” estimates revise their perceptions in the face of strong disconfirming evidence. Asymmetric disconfirmation can produce a population-level bias even when initial perceptions are accurate on average. We suggest that asymmetric disconfirmation has implications for confirmation bias and self-fulfilling prophecy research in social perception. Claiming a Large Slice 3 Claiming a Large Slice of a Small Pie: Asymmetric Disconfirmation in Negotiation Consider a common negotiation scenario. Jill posts an ad for a used car. It is listed for $2,800, but she is willing to accept $2,300. After several rounds of posturing, arguing, and conceding, she and the buyer arrive at a price of $2,450. Jill is quite satisfied that she has cleared

Goal setting is one of the most replicated and influential paradigms in the management literature. Hundreds of studies conducted in numerous countries and contexts have consistently demonstrated that setting specific, challenging goals can powerfully drive behavior and boost performance. Advocates of goal setting have had a substantial impact on research, management education, and management practice. In this article, we argue that the beneficial effects of goal setting have been overstated and that systematic harm caused by goal setting has been largely ignored. We identify specific side effects associated with goal setting, including a narrow focus that neglects non-goal areas, a rise in unethical behavior, distorted risk preferences, corrosion of organizational culture, and reduced intrinsic motivation. Rather than dispensing goal setting as a benign, over-the-counter treatment for motivation, managers and scholars need to conceptualize goal setting as a prescription-strength medication that requires careful dosing, consideration of harmful side effects, and close supervision. We offer a warning label to accompany the practice of setting goals. Goals Gone Wild 3 Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal-Setting

This paper presents a series of studies (laboratory, archival, and field) that test models of cognitive and emotional decision-making in the context of Internet auctions. We demonstrate for the first time a behavioral reversal of the classic anchoring effect, finding that lower starting prices can produce higher final sale prices. We show that this effect results from lower starting prices reducing barriers to entry into the auction, thereby increasing interest, traffic, and, in the end, higher final prices. We also show how starting price interacts with a number of different variables, and in doing so, find support for Mandler’s (1975; 1982) congruity model, an affective extension of that model, and a new model of competitive arousal (Ku, Malhotra, & Murnighan, 2003). The discussion focuses on extending our understanding of the effects of anchors from intrapersonal and dyadic to group domains, contextualizing anchors in social processes, and the need to simultaneously consider cognitive and affective influences in decision-making. Congruity, Competitive Arousal, and Anchoring Reversal 3 Starting low but ending high: Congruity, competitive arousal, and a reversal of the anchoring effect in auctions “When the competition swings into high gear, e-motion really comes into play, … In the

Abstract. An e-market system is a concrete implementation of a market institution; it embeds one or more exchange mechanisms. E-market systems are also information systems which are information and communication technologies artifacts. This work puts forward an argument that the study of e-markets must incorporate both the behavioral economics as well as the information systems perspectives. To this end the paper proposes a conceptual framework that integrates the two. This framework is used to formulate a model, which incorporates the essential features of exchange mechanisms, as well as their implementations as is artefacts. The focus of attention is on two classes of mechanisms, namely auctions and negotiations. They both may serve the same purpose and their various types have been embedded in many e-market systems.

Abstract not found