Negotiating with the Powerful Yields Higher Profits, Even at the Cost of Efficiency
This research looks at how bargaining power affects negotiations when a boss deals with two workers. The order of negotiations can impact how well decisions are made. When there are factors affecting both workers, it's best for the boss to talk to the stronger worker first to get the most benefit. Even if there are problems caused by one worker's actions, the ideal plan is still negotiating with the strong worker first. However, when the workers' actions benefit each other, the boss might prefer talking to the weaker worker first, even though it's not the most effective way. These results apply with more than two workers, and there are certain situations where making deals with all workers at the same time is the smartest choice.