In many countries, including Russia and East Asia, business negotiations often involve the consumption of alcohol. Does it help the business process or hinder?
To drink or not to drink? To answer this question, Chinese and Singaporean economists decided to conduct an experiment.1, for participation in which 114 people were invited. The subjects were divided into pairs and offered to play a game that simulated negotiations. Before each round, the participants were given a certain amount (from 1 to 10 dollars), and only the participant himself knew how much money he received. In each round, the partners could keep the entire amount for themselves or agree to «invest» it in a common fund. If both partners agreed to this, another 20% was added to the total amount and then the money was divided equally.
Under these conditions, if one of the participants received a relatively large amount at the beginning of the round and decided to invest it “in a common cause”, he risked eventually being in the red if his partner received and invested significantly less. Therefore, initially, most participants agreed to invest money only if they received a small amount — so they risked almost nothing, while having a chance to increase their investments. After several rounds of the game, they began to understand how their partner was acting and could change their strategy.
Under the influence of alcohol, a person is less receptive to rational arguments and tends to make decisions under the influence of emotions.
Before the game, the researchers gave part of the subjects to drink a small glass of beer (350 ml), the rest were offered juice instead of beer. It turned out that when both partners in the game drank alcohol, they were much more likely to agree to lay down their “capitals”.
According to the authors of the study, the point is not that alcohol increases the propensity to take risks, changes mood or increases the desire to do a good deed, but that it reduces suspicion, thus helping to negotiate.
However, not all scientists agree that drinking at the negotiating table is such a good idea. For example, a study by American psychologists conducted in 2001 showed that although alcohol does help build trust and reduce suspicion towards partners, at the same time, drunk negotiators are more aggressive, more likely to make mistakes and, as a result, may conclude ineffective agreements.2.
Under the influence of alcohol, a person is less receptive to rational arguments and more likely to make decisions under the influence of emotions. Besides drinking affects different people in different ways and can give an advantage to those negotiators who are less prone to intoxicationwhich is sometimes used by unscrupulous businessmen. On the other hand, for people who are not very self-confident, alcohol can give determination and enable them to resist psychological pressure from their partners.
As a result, the possible disadvantages rather outweigh the advantages of «alcohol negotiations», and if you still decide to have a glass at a business lunch to «melt the ice» at the first meeting, do it in moderation.
1 J. Zhang J. et al. «Deal or no deal? The effect of alcohol drinking on bargaining», Journal of Economic Behavior & Organization, vol. 127, July 2016.
2 M. Schweitzer & L. Gomberg «The Impact of Alcohol on Negotiator Behavior: Experimental Evidence», Journal of Applied Social Psychology, 2001, vol. 31, № 10.