The Role of Social Identity and Information in Expectation Formation and Bargaining Facilitation

This paper explores how the social context in which market transactions are embedded influences transaction expectations, perceptions and outcomes in both complete and incomplete information situations. Under complete information conditions, individuals react more strongly to unfair offers that come from out-group than from in-group counterparts reflecting out-group derogation (Study 1). However, under incomplete information condition, norm violating expectations come into play (Study 2). Individuals stop giving the benefit of the doubt to in-group counterparts when the offer is relatively low, signaling possible competitive behavior. Additionally, they start favoring out-group counterparts when the offer is relatively high and clearly signals cooperative behavior (Study 3). This paper highlights the malleability of judgment and behavior to social cues that are an integral part of many exchange processes. Knowledge of such influences should facilitate better management of trade-offs between competitive and cooperative behavior in exchange processes.

Citation:

Ana Valenzuela and Joydeep Srivastava (2009) ,"The Role of Social Identity and Information in Expectation Formation and Bargaining Facilitation", in AP - Asia-Pacific Advances in Consumer Research Volume 8, eds. Sridhar Samu, Rajiv Vaidyanathan, and Dipankar Chakravarti, Duluth, MN : Association for Consumer Research, Pages: 158-159.