How, when and why do negotiators use reference points? A qualitative interview study with negotiation practitioners

Human decision-making is strongly influenced by the reference points (RPs) people choose. Despite their relevance and ubiquity in negotiations, RPs have received little attention on a conceptual level. To broaden the conceptual knowledge on RPs in negotiations, this paper aims to conduct a qualitative study with experienced negotiation practitioners. To identify relevant RPs in negotiations, 58 key informants from various negotiation contexts (i.e. business negotiations, labor–union negotiations and political negotiations) were interviewed. Based on 609 items (i.e. specifications of RPs) from 61 reported negotiation cases, this paper provides a comprehensive typology of RPs in negotiations. This paper finds four deviations from and extensions of the literature: first, negotiators apply a (much) greater variety of RPs than is represented in research. Second, this paper identifies four different origins of RPs (i.e. the negotiators themselves, the negotiators’ organizations, the parties’ collaboration and the environment). Third, RPs are more dynamic than previously assumed in empirical research, because negotiators frequently change their RP in negotiations. And fourth, this paper extends the knowledge about the psychological functions of RPs in negotiations: The informants in this study used RPs not only to evaluate their own performance, but also to justify outcomes within their organizations and monitor the implementation of agreements. The insights of this inductive study suggest a change in the current understanding of RPs in research, as RPs prove to be a multifaceted and dynamic construct that fulfills various psychological functions. With the current research, this paper aims to narrow a critical theoretical gap by broadening the conceptual understanding of RPs, a central element of various theoretical approaches in negotiation research. Thereby, this paper also contributes to further specifying a general theory of negotiation.