Bargaining Power and the Impact of Gender Differences - An Experimental Investigation on Retailer-Manufacturer Bargaining

One of the recurring topics in retailing is the power shift in the supply channel toward the retailers. Several studies focus on the reasons for the power shift rather than highlighting the consequences for the retailer-manufacturer relationship. Despite a considerable amount of literature about gender, the intersection of power and gender is seldom challenged. In this paper, we combine both research fields and analyze the force of gender differences and bargaining power on the success in the domain of retailer-manufacturer negotiations. In our experiment, which is a modified version of Gupta's (1989) negotiation task with 72 negotiators, we consider the issue authority as a proxy of bargaining power. Differences in issue authority allocation turn out to have a significant impact on negotiation success. In scenarios with substantial differences in bargaining power, particularly female and mixed dyads failed to achieve a mutually satisfactory result. We learn that an increase in issue authority for one of the two parties does not necessarily lead to an increase in negotiation efficiency. Female negotiators rely on their bargaining power, rather than systematically improving mutual utilities whereas masculine dyads negotiate on a consistently higher, but still inefficient level. In the light of these differences, we argue that bargaining power in commercial negotiations does not compensate for insufficient negotiation skills or efforts. On the contrary, unbalanced bargaining power decreases the likelihood of success.