Power and Goal Setting in Channel Negotiations

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Abstract
The authors investigate the use of a moderately high externally set profitability constraint as a goal-setting mechanism for controlling channel negotiators. Equal and high power channel members are shown to be made more profitable by the constraint. Low power channel members are shown to be made less profitable by the same constraint. The analysis is done in the context of an experimental market simulation that reveals the impact of the constraint and power variables on both quantity and quality of transactions completed as well as dynamics of negotiations over time.