The idea of having to negotiate over the price of a new car sends many into the cold sweats, but new research published in Psychological Science, a journal of the Association for Psychological Science, suggests that sweaty palms and a racing heart may actually help some people in getting a good deal.
As researchers Ashley D. Brown and Jared R. Curhan of the Sloan School of Management at MIT demonstrate in two experiments, physiological arousal isn't always detrimental:
"It turns out that the effect depends on whether you are someone who dreads or looks forward to negotiating," Brown explains. "It's not inherently harmful."
In their first experiment, Brown and Curhan assessed participants' attitudes toward negotiation. Several weeks later, they had participants walk on a treadmill while negotiating over the price of a used car. Some participants walked quickly to increase their heart rates, while others walked at a slower pace.
Among the participants with negative attitudes toward negotiation, those who had increased heart rate expressed being less satisfied with their negotiations in comparison to the slow-walking participants.
Those who initially reported positive attitudes, on the other hand, were more likely to express greater satisfaction with the negotiation after walking at a faster pace.
Results from a second experiment in which participants negotiated an employment compensation package suggest that physiological arousal may even enhance the negotiating abilities of those with positive attitudes toward negotiation.
Brown and Curhan found that participants who look forward to negotiating and who walked while doing so achieved higher economic outcomes than those who sat during the negotiation session. In contrast, participants who dread negotiating and who walked during the negotiation performed worse.
Ultimately, the new research suggests that the effects of physiological arousal are driven by subjective interpretation. People who can't stand negotiating seem to interpret arousal as a negative sign of nervousness, and physiological arousal therefore has a detrimental effect on their performance. But those who relish a chance to negotiate seem to interpret arousal as a positive sign of excitement, making them feel "revved up," and the arousal boosts their performance.
Given these findings, Brown and Curhan wonder whether the conventional advice to "just relax" might be outmoded. And they note that the benefits of physiological arousal may not be limited to negotiation:
"We speculate that this polarizing effect of physiological arousal is more widely applicable to other contexts such as public speaking, competitive sports, or test performance, to name a few," says Brown.
The research raises several questions that need to be explored -- such as whether there are different optimal levels of arousal depending on prior attitudes toward negotiation -- but the researchers believe that the current findings "provide insight into potential strategies that individuals who dread negotiation could use to minimize the observed detrimental effects of arousal."
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