Context and Environment in Negotiation

The aim of this chapter is to examine to what extent the characteristics of the location where the negotiation takes place influence the negotiation process and outcomes. The role of environmental factors in negotiations has received only scarce attention. The chapter starts by discussing relevant insights from different disciplines and covers literature on the “home-field” advantage, which has mostly been studied in the domain of sports. Studies from environmental psychology provide ample evidence of the positive impact nature, both green (forests) and blue (coast, lakes), has on well-being, mindset, and creativity. After this overview, an experimental study is discussed in which the possible impact of the environment on negotiations has been examined. In a virtual reality laboratory, a location of a beach and an office has been created, in which participants had to carry out a face-to-face negotiation with either distributive or integrative characteristics. The results show that the environment predominantly affected psychological variables: negotiating at the beach increased positive emotions and reduced the stress experienced in the negotiation. However, the different settings did not lead to different negotiation outcomes. The implications of the environment for negotiations are discussed as well as the possibilities the virtual reality technology offers in this respect.