Negotiations between British and Dutch managers: cultural values, approaches to conflict management, and perceived negotiation.

The present research investigates cultural values, approaches to conflict management, and perceived negotiation satisfaction in manager samples from the UK and the Netherlands. Three studies (total N = 412) were conducted, of which Study 1 and 2 pertained to the development of the measure and Study 3 was used to conduct the main analysis. The research focus centres around the following main objectives: a) refinement of conflict management models and instruments; b) profile analyses of Dutch and British conflict management approaches using Schwartz’s (1992, 1994) Value Types to explain observed differences, and c) testing of a model describing interrelations between cultural values, approaches to conflict management, conflict context, and perceived negotiation satisfaction. Previous research on conflict management modeled conflict behaviour on the basis of a concern for self vs. concern for others matrix, which incorporated communication styles. The present research distinguishes between the underlying concerns, conflict management strategies, and communication styles to predict perceived negotiation satisfaction. Furthermore, conflict management dynamics are investigated by comparing the ratings of own vs. other team’s conflict management approach. In-group vs. out-group differentiation was dependent on the social desirability of the conflict management approach in question. Dutch managers associated themselves less and British managers more with a concern for Inconvenience, Avoiding, and Indirect communication, whereas British managers associated themselves more and Dutch managers less with these approaches. Results for cultural values showed that the main difference between Dutch and British managers concerned a higher score for Dutch managers on Self Transcendence and a higher score on Self Enhancement for British managers. Self Enhancement mediated the effect for nationality for Dominating strategy. Furthermore, Self Transcendence predicted a concern for Clarity, a Problem Solving strategy, and a Consultative communication style. Nationality as predictor of Concern for Inconvenience, Avoiding strategy, and Indirect communication style was not mediated by Value Types. Suggestions are made for future research exploring the role of Uncertainty Avoidance at the individual level. Success and Comfort were predicted by own and other team’s Conflict Management Approach, additional to cultural value types and contextual variables. National differences were observed for particular predictors of perceived negotiation satisfaction

Autonomous agents in bargaining games : an evolutionary investigation of fundamentals, strategies, and business applications

Bargaining is becoming increasingly important due to developments within the field of electronic commerce, especially the development of autonomous software agents. Software agents are programs which, given instructions from a user, are capable of autonomously and intelligently realise a given task. By means of such agents, the bargaining process can be automated, allowing products and services together with related conditions, such as warranty and delivery time, to be flexible and tuned to the individual preferences of the people concerned. In this theses we concentrate on both fundamental aspects of bargaining as well as business-related applications of automated bargaining using software agents. The fundamental part investigates bargaining outcomes within a stylised world, and the factors that influence these outcomes. This can provide insights for the production of software agents, strategies, and setting up bargaining rules for practical situations. We study these aspects using computational simulations of bargaining agents. Hereby we consider adaptive systems, i.e., where agents learn to adjust their bargaining strategy given past experience. This learning behaviour is simulated using evolutionary algorithms. These algorithms originate from the field of artificial intelligence, and are inspired by the biological theory of evolution. Originally, evolutionary algorithms were designed for solving optimisation problems, but they are now increasingly being used within economics for modelling human learning behaviour. Besides computational simulations, we also consider mathematical solutions from game theory for relatively simple cases. Game theory is mainly concerned with the “rational man”, that is, with optimal outcomes within an stylised setting (or game) where people act rationally. We use the game-theoretic outcomes to validate the computational experiments. The advantage of computer simulations is that less strict assumptions are necessary, and that more complex interactions that are closer to real-world settings can be investigated. First of all, we study a bargaining setting where two players exchange offers and counter offers, the so-called alternating-offers game. This game is frequently used for modelling bargaining about for instance the price of a product or service. It is also important, however, to allow other product- and service-related aspects to be negotiated, such as quality, delivery time, and warranty. This enables compromises by conceding on less important issues and demanding a higher value for relatively important aspects. This way, bargaining is less competitive and the resulting outcome can be mutually beneficial. Therefore, we investigate using computational simulations an extended version of the alternating-offers game, where multiple aspects are negotiated concurrently. Moreover, we apply game theory to validate the results of the computational experiments. The simulation shows that learning agents are capable of quickly finding optimal compromises, also called Pareto-efficient outcomes. In addition, we study the effects of time pressure that arise if negotiations are broken off with a small probability, for example due to external eventualities. In absence of time pressure and a maximum number of negotiation rounds, outcomes are very unbalanced: the player that has the opportunity to make a final offer proposes a take-it-or-leave-it offer in the last round, which leaves the other player with a deal that is only slightly better than no deal at all. With relatively high time pressure, on the other hand, the first offer is most important and almost all agreements are reached in the first round. Another interesting result is that the simulation outcomes after a long period of learning in general coincide with the results from game theory, in spite of the fact that the learning agents are not “rational”. In reality, not only the final outcome is important, but also other factors play a role, such as the fairness of an offer. Using the simulation we study the influence of such fairness norms on the bargaining outcomes. The fairness norms result in much more balanced outcomes, even with no time pressure, and seem to be closer outcomes in the real world. Negotiations are rarely isolated, but can also be influenced by external factors such as additional bargaining opportunities. We therefore also consider bargaining within a market-like setting, where both buyers and sellers can bargain with several opponents before reaching an agreement. The negotiations are executed consecutively until an agreement is reached or no more opportunities are available. Each bargaining game is reduced to a single round, where player 1 makes an offer and player 2 can only respond by rejecting or accepting this offer. Using an evolutionary simulation we study several properties of this market game. It appears that the outcomes depend on the information that is available to the players. If players are informed about the bargaining opportunities of their opponents, the first player in turn has the advantage and always proposes a take-it-or-leave-it deal that leaves the other player with a relatively poor outcome. This outcome is consistent with a game-theoretic analysis which we also present in this thesis. If this information is not available, a theoretical analysis is very hard. The evolutionary simulation, however, shows that in this case the responder obtains a better deal. This occurs because the first player can no longer anticipate the response of the other player, and therefore bids lower to avoid a disagreement. In this thesis, we additionally consider other factors that influence the outcomes of the market game, such as negotiation over multiple issues simultaneously, search costs, and break off probabilities. Besides fundamental issues, this thesis presents a number of business-related applications of automated bargaining, as well as generic bargaining strategies for agents that can be employed in related areas. As a first application, we introduce a framework where negotiation is used for recommending shops to customers, for example on a web page of an electronic shopping mall. Through a market-driven auction a relevant selection of shops is determined in a distributed fashion. This is achieved by selling a limited number of banner spaces in an electronic auction. For each arriving customer on the web page, shops can automatically place bids for this “customer attention space” through their shop agents. These software agents bid based on a customer profile, containing personal data of the customer, such as age, interests, and/or keywords in a search query. The shop agents are adaptive and learn, given feedback from the customers, which profiles to target and how much to bid in the auction. The highest bidders are then selected and displayed to the customer. The feasibility of this distributed approach for matching shops to customers is demonstrated using an evolutionary simulation. Several customer models and auction mechanisms are studied, and we show that the market-based approach results in a proper selection of shops for the customers. Bargaining can be especially beneficial if not only the price, but other aspects are considered as well. This allows for example to customise products and services to the personal preferences of a user. We developed a system makes use of these properties for selling and personalising so-called information goods, such as news articles, software, and music. Using the alternating-offers protocol, a seller agent negotiates with several buyers simultaneously about a fixed price, a per-item price, and the quality of a bundle of information goods. The system is capable of taking into account important business-related conditions such as the fairness of the negotiation. The agents combine a search strategy and a concession strategy to generate offers in the negotiations. The concession strategy determines the amount the agent will concede each round, whereas the search strategy takes care of the personalisation of the offer. We introduce two search strategies in this thesis, and show through computer experiments that the use of these strategies by a buyer and seller agent, result in personalised outcomes, also when combined with various concession strategies. The search strategies presented here can be easily applied to other domains where personalisation is important. In addition, we also developed concession strategies for the seller agent that can be used in settings where a single seller agent bargains with several buyer agents simultaneously. Even if bargaining itself is bilateral (i.e., between two parties), a seller agent can actually benefit from the fact that several such negotiations occur concurrently. The developed strategies are focussed on domains where supply is flexible and can be adjusted to meet demand, like for information goods. We study fixed strategies, time-dependent strategies and introduce several auction-inspired strategies. Auctions are often used when one party negotiates with several opponents simultaneously. Although the latter strategies benefit from the advantages of auctions, the actual negotiation remains bilateral and consists of exchanging offers and counter offers. We developed an evolutionary simulation environment to evaluate the seller agent’s strategies. We especially consider the case where buyers are time-impatient and under pressure to reach agreements early. The simulations show that the auction-inspired strategies are able to obtain almost maximum profits from the negotiations, given sufficient time pressure of the buyers

The multi-dimensionality of trustworthiness of banks midst a confidence crisis : the case of retail banks in Zimbabwe

The strategic importance of a well-established banking sector in an economy and the pivotal role trust plays in this sector is well-documented in banking literature. Given this accepted importance of trust, it is surprising that some banks are still exhibiting more signals of distrust than of trust as expected, shattering consumer trust and confidence in the process. In response, governments, through their central banks, occasionally resort to implementing policies that focus heavily on regulation and control. These interventions are usually designed to restore consumer confidence in the banks’ future behaviours as well as providing assurance that exchanges taking place within a banking sector are safe and secure. Surprisingly, consumer trust and confidence are still elusive in some banking sectors, despite all these measures. This mixed-methods, sequential explanatory study explores the concept of trustworthiness by investigating trustworthiness dimensions of banks that drive consumer trust in the Zimbabwean banking sector that is experiencing low trust and confidence levels. To fulfil the objectives of this study, a quantitative research approach (survey) was first employed to explore bank customers’ trustworthiness perceptions on a sample of 400 customers. A qualitative research approach (semi-structured interviews), was then employed to gain a better understanding and clarification of the survey findings. Structural Equation Modeling (SEM) was applied to determine the statistical model that sought to explain the relationship among the variables. Hypotheses were then tested between model constructs to determine their influence on one another. Study findings revealed that shared values, structural assurance and integrity (consistency) are the trustworthiness determinants with the highest positive influence on bank trustworthiness. A negative relationship was found between communication and bank trustworthiness. Competence was found to have an insignificant correlation with trustworthiness. Additionally, both behavioural intentions and affective commitment (relational outcomes) were found to positively influence bank trustworthiness. This study has brought to light how trustworthiness of banks is perceived in a banking sector that is not only experiencing a confidence crisis but also in a country that is experiencing an uncertain economic and political environment within an African banking context. The final model presented in this study can be applied in trustworthiness studies in the financial services sectors, particularly in sectors that are operating in similar uncertain environments. In order to reignite consumer confidence in the banking sector, the RBZ is advised to set tighter corporate governance measures that can put a stop to activities such as insider lending that end up defrauding depositors within the banks. It is also imperative that departments such as Treasury, Risk and Credit within the RBZ and in banks are managed by competent personnel who adhere to the prudential standards of banking. Bank custodians are advised to continuously exhibit trustworthiness behaviours because customers’ trust and confidence can only be restored if there is evidence of sincere behaviours that are regarded as reflecting a trustworthy image. Planning for peak periods in terms of cash and personnel, to avoid prolonged queues and cash shortages that have become an everyday occurrence in the Zimbabwean banking sector is one way banks can improve trust and confidence. Banks should also consider providing services such as financial hardship advisory services and extended loan repayment options that can go a long way in not only assisting their customers to manage their debts, but also to show that banks are taking into consideration their customers’ current challenges and needs. Key stakeholders in the banking sector are also encouraged to share information on key developments integral to the smooth functioning of the banking sector. This information should then be disseminated to the banking public in a unified voice to avoid distortion of information that leads to financial anxiety and further erosion of trust. In the absence of formal timeous communication, bank customers may resort to relying on the grapevine and engage in speculative behaviours which can be very destructive and difficult to correct.Business ManagementD.B.L

In Money we Trust? Trust Repair and the Psychology of Financial Compensations

Despite the importance of trust in economic relations, people often engage in behavior that may violate their interaction partner’s trust. Given that transgressions in economic relations often result in distributive harm for the victim (i.e. loss of economic resources), a common approach in these relations consists of the transgressor providing a financial compensation to the victim: if a customer has complaints about a product, he is reimbursed; when a company is being sued, it often tries to make a financial settlement with the victims. Strangely enough, the high prevalence of financial compensations as a restorative response contrasts sharply with how little is known about their effectiveness. Can financial compensations actually increase trust again and what are the factors that determine their effectiveness? By taking an experimental approach, this dissertation aims to provide some first, much needed empirical answers regarding the effectiveness of financial compensations in restoring trust. In this venture, it was not only studied how aspects of the compensation itself (e.g. size) determine their effectiveness, but also how specific characteristics of the violation, the victim and the transgressor impact victims’ reactions to a compensation. The findings of this dissertation show that even in economic relations, where violations have a clear, quantifiable distributive harm, the process of trust repair is not simply determined by the material, financial value of a compensation. Rather, this dissertation reveals how immaterial aspects such as intent in the violation, whether a compensation was imposed or voluntarily provided or whether or not an apology accompanied the compensation, are all crucial in determining the actual value that victims attach to a financial compensation

COOPERATION AND SOCIAL BONDS IN COMMON VAMPIRE BATS

Regurgitated food sharing among vampire bats is a classic textbook example of reciprocity ("reciprocal altruism"). But many authors have contested both the notion that reciprocity explains vampire bat food-sharing and the importance of reciprocity more generally. In Chapter 1, I review the literature on evolutionary explanations of cooperation. I show why reciprocity was once considered important but is now considered rare: overly literal translations of game theory strategies have resulted in problems for both defining and testing reciprocity. In Chapter 2, I examine the relative roles of social predictors of food-sharing decisions by common vampire bats (Desmodus rotundus) under controlled conditions of mixed relatedness and equal familiarity by fasting 20 individuals in 48 trials over two years. The food-sharing network was consistent, symmetrical, and correlated with mutual allogrooming. Non- kin food-sharing patterns were not consistent with harassment or byproduct explanations. I next attempted to manipulate food-sharing decisions in two ways. In Chapter 3, I administered intranasal oxytocin to test for effects on allogrooming and food sharing. I observed that inhaled oxytocin slightly increased the magnitude of food donations within dyads, and the amount of female allogrooming within and across all partners, without increasing number of partners. In Chapter 4, I assessed contingency of food-sharing in 7 female dyads (including four pairs of mother and adult daughters) with prior histories of sharing. To test for evidence of partner switching, I measured dyadic levels of food sharing before and after a treatment period where I prevented dyadic sharing (each bat could only be fed by others). A bat's sharing network size predicted how much food it received in the experiment. When primary donors were excluded, subjects did not compensate with donations from other partners. Yet, food-sharing bonds appeared unaffected by the non-sharing treatment. In particular, close maternal kin were clearly not enforcing cooperation using strict contingency. I argue that any contingencies within such bonds are likely to involve multiple services and long timescales, making them difficult to detect. Simple and dyadic `tit-for-tat' models are unlikely to predict cooperative decisions by vampire bats or other species with stable, mixed kinship, social bonds

Voluntary Cooperation in the Provision of a Semi-public Good. Community-based Soil and Water Conservation in Semi-arid India.

This dissertation analyses the question whether households in India’s semi-arid tropics can be expected to voluntarily maintain semi-public investments in soil and water conservation. Increasingly, public investment programs decentralise project planning, implementation and management to local communities, whereas it is unclear whether local communities can be expected to effectively manage these investments in the long run. The analysis in this dissertation suggests that to maintain a socially efficient level of soil and water conservation investments it is important that a strategic coalition of cooperative households exists. Also, the external environment plays an important role. Emerging labour markets, market access and resource scarcity all help determine whether individual households have an incentive to cooperate in semi-public good provision or not. Using experimental data on village trust levels, the analysis suggests that targeting investments at homogeneous communities might help improve project effectiveness, since communities with higher trust levels are more likely to maintain public investments than communities where trust is low. Finally, the analysis suggests that decentralising decision-making can also have a negative effect. When water is scarce, upstream investments in soil and water conservation might negatively affect farmers downstream. Hence, for community-based interventions to be welfare enhancing it is crucial that the potential externalities of decentralised decision-making are sufficiently addressed.