The effect of cost information on buyer-supplier negotiations in different power settings

We investigate the influence of total cost of ownership (TCO) information oil buyer-supplier negotiations in different power settings. Based oil social exchange theory and recent literature oil information processing, we expect that buyers with detailed TCO information and less power than their negotiation partners may try to (re)gain control over their own outcomes by sharing information. The results of our experiment indicate that the performance disadvantage of less powerful buyers is less pronounced when the buyer has detailed TCO information, whereas more powerful buyers do not seem to be able to profit front TCO information. These somewhat counterintuitive findings are explained through detailed analysis of the buyer's negotiation behavior, which shows that less powerful buyers who have access to TCO data use problem solving techniques more frequently than powerful buyers, who tend to rely on distributive bargaining techniques instead. We Conclude that power can motivate a failure to share TCO information, resulting in less effective interfirm negotiation outcomes. (C) 2008 Elsevier Ltd. All rights reserved.