On-line Trade Negotiations: A Study of Perceived Fairness of Negotiation-Support Tools Usage

The proliferation of the digital economy has created a need for firms to negotiate business deals online. Negotiation support tools are likely to play a more critical role in web portal sites, manufacturer-supplier procurement sites, and on-line exchanges. Prior research has shown that negotiators concern themselves with fairness because they care about building and strengthening business relationships among trading partners, while some negotiators are even willing to forego material benefits to achieve it. Notwithstanding their importance, the impact of the different degree of sophistication of computer negotiation support on the perceived fairness of negotiation outcomes and processes are not well understood. This research addresses this gap by conducting laboratory experiments to investigate negotiating dyads’ perceived fairness of the negotiation process and outcome in multi-issue, on-line trade negotiations supported by three types of computer negotiation support tools with different degrees of sophistication – web-based electronic messaging (EM), negotiation support systems (NSS), and autonomous electronic bargaining agents (EBA). Two types of bargaining situation were investigated: integrative and distributive bargaining. Our findings show that the degree of sophistication in the negotiation support does affect different dimensions of the perceptions of fairness of negotiation outcomes and processes in integrative and distributive bargaining situations. EM was typically found to have the highest evaluations in perceived fairness of negotiation process and outcome in integrative and distributive negotiations, while there are no significant perceived differences in fairness of negotiation outcomes and processes in EBA and NSS-supported distributive negotiations. Implications for NSS and EBA implementation and research are drawn.