Mental Accounting in Allocation Negotiations

Conflicts of interests on allocation resources between parties are ubiquitous at all levels of society, which makes resource allocation a prevalent feature of social life. It can occur between individuals, teams, organizations, and nations; it can take place on informal occasions, such as household decision-making (e.g., how couples will contribute to the household and how incomes will be distributed with the family), as well as formal occasions, such as corporate policy-making (deciding the capital input towards a joint venture and the distribution of future profits) and international issues (e.g., distributing finishing rights among nations). In all these allocations, negotiation is the indispensable decision-making process that cuts down the chances of future conflicts, arouses economic prosperity, and regulates resource allocations. Although negotiations play a crucial role in resolving conflicts about allocations, little is known about psychological processes that affect individuals' perceptions and behaviors in negotiation tasks that involve the contribution or/and distribution of resources. The current research project aims to systematically investigate psychological processes emerging in negotiations against the backdrop of different types of allocation tasks (i.e., distribution vs. contribution negotiations). We build on the theoretical foundations of mental accounting in consumer and decision-making research and a recently introduced mental-accounting model of negotiation and seek to investigate how negotiators mentally process benefits (e.g., economic profits) and costs (e.g., economic losses) in distribution vs. contribution negotiations. By examining the psychology of mental accounting in allocation negotiations, the present research will contribute to psychological conflict research and the negotiation literature from both theoretical and applied perspectives.