Toward a Theory of Negotiation Precedent

A precedent is a past behavior, decision, action, or event that serves as a guide for present action. How do negotiators use precedents in a negotiation, and how do they rebuff them? How do negotiators build and facilitate precedents and use them effectively and ineffectively? Why and how do negotiators refuse to accept a particular precedent in a negotiation? The answers to these and related questions illuminate how precedents serve as a strategic technique in negotiations.

Although relevant to negotiation, these questions have remained largely unexplored. Our understanding of negotiation precedent is so underdeveloped that I could not find a definition for “precedent” within the negotiation literature. Furthermore, not a single article, book chapter or book published within the negotiation literature includes “precedent” within its title.¹ I have found only a handful of relevant studies, while many, many articles simply make a passing reference to the utility or application of a precedent without any real intellectual inquiry. Our underdeveloped understanding of the role of precedents in negotiation suggests more than just a “gap” in the literature: this is vast uncharted territory.

So, how do we launch a new area of inquiry? First, we can review other fields that have studied the concept and ask if those findings have relevance to negotiation despite contextual differences. For example, in this article I review knowledge on precedents gained from the study of common law.

Second, we can review relevant related concepts from within our own literature and use them to create research questions or propositions that can guide the development of an applicable research methodology. In this article I strive to achieve this purpose.

Initially, I consider the fundamental nature of a precedent by analyzing an illustrative case and then establish a definition for a precedent by reviewing the common law literature and considering it within a negotiation context. Next, I describe a theoretical framework to help apply the sparse negotiation literature relevant to the study of precedents. Using this framework and the available literature, I identify primary concepts and research questions, and eventually develop a research agenda. I conclude the article with a call for the further study of negotiation precedents.

The following case study concerns Chile's separate trade negotiations with Europe (EUCAA 2002) and with the United States (USCFTA 2003). It illustrates how precedents might be built and used in a negotiation.

The Republic of Chile found itself concurrently but separately negotiating trade agreements with the European Union and the United States at the turn of the twenty‐first century. European Union–Chile negotiations commenced in April 2000 with a trade treaty signed in November 2002. United States–Chile negotiations began eight months later, in December 2000, with a trade treaty signed in June 2003 (Crump 2011).

The EU was very much aware that Chile was concurrently negotiating with the United States and as their negotiation moved toward the “end‐game,” the EU shared a crucial observation with Chile. A lead EU negotiator advised his Chilean counterpart that EU financial services goals were more reasonable than U.S. financial services goals, and argued: “Cut a deal on our more moderate financial services goals now and then you can use this agreement as a precedent in negotiating with the United States” (European Commission Deputy‐Director General 2005). A Chilean financial services negotiator provided direct confirmation of this EU approach, and explained how Chile used the financial services deal it reached with the EU in its negotiations with the U.S. “Chile achieved financial services policies with Europe that were much closer to our goals, as compared to U.S. demands. Without this precedent, Chile would have had no argument with the U.S.” (Chilean Trade Policy Director 2006). Chile was forced to accept many U.S. financial services demands, given the asymmetry of the power between the two countries, but this same negotiator said that Chile successfully rejected a U.S. proposal that would allow the establishment of foreign banks in Chile without a commitment of capital from the banks (known as branching) because of the precedent established through its treaty with the EU (see EUCAA 2002: Title 3; USCFTA 2003: Chapter 12).

In this case, the EU strategically used Chile's concern about a future negotiation with a different party to gain agreement on its own current negotiation. The EU negotiator proposed that Chile consider the advantages of not just a particular agreement, but an agreement that could later serve as a precedent. Chile accepted that argument and then jointly developed a set of financial services precedents. Chile might have been less accommodating to the EU if the EU had not persuaded Chile's negotiators of the potential value of building a precedent. The United States, on the other hand, was able to refuse some (although not all) of the precedents contained in the EU–Chile trade treaty (see Crump 2010, 2011).

This example illustrates that a precedent is a multifaceted strategic tool that can significantly influence negotiation behavior. Imagining, proposing, building, and applying precedents are negotiation tactics that can be used as part of integrative strategies (e.g., the EU and Chile) or distributive strategies (e.g., the U.S. and Chile). Because their effective use can help parties achieve their goals, the lack of attention paid to precedents as a strategic tool within the negotiation literature is remarkable (Crump 2013). Some relevant theory exists, but it is clearly underdeveloped, given the significance of the topic (Crump 2007).

Briefly, in the legal studies literature a precedent is a past decision or event that serves as a guide for present action (Duxbury 2008). Precedents are the foundation on which common law is built. Written records within the English Court of the King's Bench allowed for decided cases to become precedents from 1195 (Lee 1922).² Common law is built on the principle of stare decisis, which encourages judges to follow precedent by letting past decisions stand (Fowler and Jeon 2008). Generally, a precedent constrains the discretion of future decision makers to some meaningful degree (Schauer 1987; Weidemaier 2009–2010). “Formal precedent‐based rule structure, such as the common law, provide us with insights into the advantages of maintaining consistency while the structure evolves” (David 1994: 215). Within law, a precedent attaches a specific legal consequence to a judicial decision, which then theoretically guides the determination of subsequent cases involving similar facts (Aldisert 1990).

Precedents do not have the binding force of statutory rules or laws. Rather, the binding force contained within a former judicial ruling is best explained through degrees of authority, contained within the relationship between the specific prior ruling or precedent and the unique facts and circumstances of the case where that precedent might be applied, which serves to constrain judicial decision making (Duxbury 2008).

Precedents have been explored extensively within the study of common law. Current cases are typically examined in relation to prior case law, which is a narrow and technical approach to precedent application.

Within negotiation, on the other hand, we are concerned not only with precedent application but with how precedents can be strategically built. We are also concerned with how behavior, decisions, and events unintentionally evolve into precedents for use in some future negotiation. The negotiation environment is a much larger space with a much greater and more diverse set of dynamics than those found within the courtroom.

This is not to suggest that the concept of legal precedent lacks relevance to negotiation, as a legal precedent can contribute to the structure within which a negotiation exists insofar as the law has relevance to that negotiation, only that a negotiation precedent may include a much greater degree of flexibility and much less control — or even no control — in its application when compared with a legal precedent. A judge may be bound by a relevant precedent, while a negotiator may not experience this same kind of binding force, because the negotiator and the judge operate in two different realms with significantly different social, legal, economic, cultural, and psychological norms, rules, and consequences.

In some realms, a negotiation precedent may indeed establish a firm rule. In other realms, a precedent may suggest a standard, a benchmark, a guide, or simply an argument or even a foothold and nothing more. The operational essence of a specific precedent is also open to negotiation.

Thus, for purposes of this discussion, I propose the following comprehensive definition of a negotiation precedent: a past behavior, decision, or event that becomes a precedent when negotiators determine that it has relevance for a present or future negotiation and/or a behavior or decision that is specifically designed to guide the actions of negotiators in a future similar situation.

Precedents may be intentionally and strategically built, but negotiators may take an action today without any consideration of its relevance to a future negotiation that later becomes a precedent when they or other negotiators determine it has relevance in another negotiation.

Negotiators may seek to build or facilitate the building of a precedent, to use a precedent, or to rebuff the use of a precedent. These are strategies grounded in the temporal relationships between and among past, present, and future events. Precedents can provide guidance (Greenberg 2006), establish rules (Lang 1996) and standards for acceptable behavior (Huseynov 2010), and external standards of fairness (Fisher 1989; Richardson 2007). Precedents confer legitimacy (Fisher 1989; Cristal 2003; Alon and Brett 2007; Crump 2007) and authority (Alon and Brett 2007), while outcomes can be contingent on earlier agreements and can create expectations that affect future agreements (Wolf 2000). Precedents and their meaning are multifaceted.

Our brief case involving Chile demonstrated how precedents are built strategically and then applied. Within law, we find discussion on forward‐looking aspect of precedents (establishing precedents) and backward‐looking aspect of precedents (precedents use) (see Schauer 1987). With this theoretical grounding in mind, in this article I analyze the sparse negotiation literature that considers precedents through a two‐part framework: establishing precedents and applying precedents.³ I also use this framework to consider the implications for negotiation practice.

Precedents — and their absence — have important impacts on negotiation strategy. Their absence can promote greater collaboration and integration, while their presence can be associated with more positional or distributive bargaining (Crump 2007). Precedents may simply evolve, but negotiators may also deliberately create them — in either case, negotiators can use them strategically to influence the outcome.

Procedural and substantive precedents can be intended or unintended by‐products of negotiation (Lax and Sebenius 1986a). Actions that seem initially to have occurred randomly in life are replicated and eventually become protocols. Organizations may formalize, incorporate, and institutionalize such protocols. Replication creates routines (Kesting and Smolinski 2007), and routines can serve as precedents. This occurs within bilateral and multilateral relationships but can also have impacts across a larger network of relationships, as each negotiation affects and is affected by other negotiations that take place within networks over time (Mouzas 2016).

According to the theory of “path dependence,” current and future actions, decisions, and states depend on the path of previous actions, decisions, or states (Page 2006). In a path‐dependence system, preceding steps in a particular direction induce further movement in the same direction (Pierson 2000) and constrain future options or actions (Vergne and Durand 2010). In short, “history matters” (David 1994).

Path dependence may help explain the establishment of some, but not all, negotiation precedents. Precedent acceptance or rejection is negotiable. For example, the constraints imposed by a path‐dependent system may be removed by one or the other party. Also, path dependence would not apply when negotiators deliberately and strategically choose to construct a precedent in the present for some future use. Nevertheless, the relationship between path dependence theory and negotiation precedent deserves greater analysis.⁴

Thomas Schelling's classic theory (1960) of focal points also has relevance to precedent evolution. A focal point helps parties cooperate and coordinate their activities by identifying a mutually recognized key — any key. For example, if cooperation is required but communication is vague — as is typical in negotiation — then two or more parties may shift toward that solution that appears to be generally relevant because each thinks that the other will make the same choice (Schelling 1960; see also Druckman and Rosoux 2016, in this issue). Thus, focal points may develop from established and well‐known precedents.

Negotiations can have strong “ripple effects” — one negotiated outcome creates expectations and sets a precedent for future outcomes. The price and terms agreed to this year are likely to have a significant impact on next year's contract negotiation. Although market or business changes could occur, the key issues are likely to remain the same. In this way, prior terms certainly exert a strong “anchoring effect” (Richardson 2007).

“Precedent intensity” is the degree to which significant expectations are created for future negotiation outcomes. For example, routine negotiations have significant precedent intensity (Hughes et al. 2012). When the same parties negotiate over the same issue repeatedly over time, linkage dynamics also contribute to precedent intensity (Crump 2006).

It is also clear that negotiators can build precedents strategically. For example, American President George W. Bush inherited the United States–Singapore free trade agreement (FTA) negotiations initiated by former President Bill Clinton. The Bush administration asked why the United States should pursue a trade treaty with such a small economy — where was the benefit for the United States? Eventually, the United States and Singapore agreed that their FTA would be precedent‐setting and serve as a model for the kind of trade treaty the United States planned to promote throughout the world (Crump 2006).

Later, the United States sought but failed to dismantle the Australian Pharmaceutical Benefits Scheme in its negotiations with Australia. The U.S. pharmaceutical industry did not really care about Australia's small market: the goal was to establish a precedent that might be used in future negotiations with partners that had larger markets (Crump 2007).

These two examples illustrate the most common framework found within the negotiation literature: the perceived “good precedent” (U.S.–Singapore) and the perceived “bad precedent” (U.S.–Australia). Within the literature, we find reference to perceived bad precedents (Susskind 1987; Crump 2007; Patton 2013), dangerous precedents (Rubin 1985), damaging precedents (Closa 1998), negative precedents (Vukovic 2012), undesirable precedents (Watkins 2001), and cheap legitimacy (Niemann 2006). Less often we find reference to perceived good precedents (Fisher 1992; Crump 2007), desirable precedents (Patchen 1998), powerful precedent (Lax and Sebenius 1986b), and an excellent precedent (Lax and Sebenius 1985).

These two examples also demonstrate the importance of asymmetrical power relations in bilateral negotiation when it comes to building precedents. Asymmetry in a bilateral situation means that one party can use leverage to achieve goals that would be impossible to achieve in multilateral settings, where coalitions might form against such goals (Cameron and Tomlin 2000). Bilateral asymmetry can raises questions about the legitimacy of any derived precedent.

What is the legitimacy of a precedent if the agreement contained in that precedent has little relevance to the less‐powerful party that accepted that agreement? In other words: if the less‐powerful party made a concession on an issue that it did not particularly care about, will that concession have any weight in a later negotiation in which a new party is asked to make a similar concession and that party cares very much about that particular issue? Little research has focused on “precedent validity” or legitimacy (Crump 2007). Precedents built to serve “mutual interests” may have greater precedent validity than precedents that are essentially “self‐serving” — especially when they are built within an asymmetrical power relationship. By “mutual‐interest precedent,” I do not mean that all parties will always gain the same or similar degree of benefit. Such a precedent, for example, can be built and offered as a conciliatory gesture to de‐escalate a conflict, conferring more obvious benefit on the target, but not the initiator (Mitchell 1991).

The future value of a precedent is fundamental to its strategic construction. What is the value of that precedent to the party seeking it? “Precedential impact” is the term for a value achieved through a precedent (Hughes et al. 2012). Is the value of a precedent mutual or exclusive to one side only? If the future value is not mutual, then the excluded party might ask for something in return, comparable to the expected future value.

One challenge of building a precedent is how to determine its actual value when compared with the substantive trade‐offs one party might seek from the other side. A precedent's value may be difficult to weigh. Some negotiators will pay more than others to avoid an undesirable precedent. How do the gains from the worst to the best possible precedent compare with the gains from the worst to the best possible outcome in the present negotiation (Lax and Sebenius 1986b)? This is a useful question that might help the negotiator evaluate a particular precedent's value.

In summary, precedents provide guidance and tested solutions, but they can limit negotiators’ perceptions of new opportunities. The knowledge of a precedent may affect negotiators’ strategic choices (e.g., integrative–distributive). We may have experienced conflict in the past, for example, and naturally move toward a distributive strategy when in the current instance a close inspection would find options for realizing joint gains. Determining the value of a precedent (when establishing it or resisting it) is more inherently challenging than determining more conventional negotiation gains or losses. Determining how to distribute the future value of a precedent presents additional complications.

Much less is known about applying precedents within a negotiation than about building them. I consider precedent application from two perspectives: seeking to use or adopt a precedent within a negotiation and seeking to rebuff, avoid, or refute the relevance or legitimacy of a precedent.

Past actions can exist as standards (Alon and Brett 2007) or benchmarks (Crump 2007). Whether a particular issue is being negotiated for the first time or has previously been negotiated can make a significant difference (Kesting and Smolinski 2007). When an issue has previously been negotiated, a precedent may exist that could be applied to a similar situation. Some negotiators argue, however, that fairness requires parties in one situation to be treated exactly the same as parties in a similar situation, while others will argue against this proposal. Some negotiators feel compelled to apply a precedent and others do not (Susskind and Crump 2008).

In the classic negotiation book Getting to Yes, the authors present the use of objective criteria as a helpful tool for identifying possible solutions, which may include precedents and past practices (Fisher, Ury, and Patton 1991). The application of a precedent can enhance perceptions of legitimacy and fairness (Fisher 1989; Patton 2013). But the process becomes more complex when negotiators identify multiple relevant precedents — they will often be biased toward an advantageous precedent, and disagreement over the relevance of precedents can arise in such circumstances. Nevertheless, some studies have argued that precedents are more useful reference points in a negotiation (Richardson 2007) than standards such as equity, equality, and need (Deutsch 1985; Bazerman and Neale 1992), which are more abstract and thus more difficult to apply.

Beyond their obvious and simple utility, significant psychological forces encourage the adoption of precedents. Humans strive for internal consistency. The perception of inconsistency or dissonance creates distress (Festinger 1957). Adopting a precedent is one way to address the discomfort that dissonance creates.

Social norms can also play a role in the adoption of a precedent. Conformity is a powerful force that can influence people to adopt the attitudes and behaviors of the group or organization to which they belong (Cialdini and Goldstein 2004). Conformist pressure also promotes the adoption of precedents.

Whether the negotiator is able to exploit these psychological orientations to promote the adoption of a precedent may depend on her or his ability to effectively argue for the relevance and/or legitimacy of the proposed precedent. Can the negotiator demonstrate effectively that the fundamental elements of a precedent and its environment of origin are sufficiently similar to the current situation? The greater the degree of “situation similarity” between the prior situation and the current situation the more effective his or her argument is likely to be.

Conversely, although a precedent may seem less relevant because it originated in a situation or context different from the present situation, negotiators may nonetheless find it advantageous to apply the precedent in the current situation: a rule that operates effectively in one context can be tested in another context (Lang 1996). For example, a precedent created in a domestic situation might promote resolution in an international situation (Wolf 2000). When situation similarity is not the driving factor, the negotiator needs to argue effectively that the perceived benefits outweigh the risk of experimentation.

Different cultures weigh the past versus the present versus the future differently and researchers have noted that culture can have an impact on perceptions of precedent utility. For example, the importance accorded to the past can give historical precedents great weight in negotiations in the Arab world, as argument is relatively more likely to rely on precedent, history, and metaphors grounded in Arab and Islamic culture (Alon and Brett 2007). An effective negotiator should consider referencing the past when discussing the present and future in these particular settings.

While the past has great utility for applying precedents, the future should not be ignored. The brief case study discussed at the beginning of this article, involving negotiations with Chile, illustrates how important it is for parties to understand their own — and each other's — perceived future. Effectively applying a precedent in the present can mean engaging with both the past and the future on each side of the table.

Avoiding the creation of a precedent and/or refuting its relevance or legitimacy are also important aspects of precedent application. Whether a party can effectively reject a precedent and still secure an agreement may depend on party power relations. Data indicate that it is more difficult to reject a precedent when power relations are more asymmetrical — especially if that precedent is important to the more powerful party (Crump 2007, 2011).

In a previous study, I identified several techniques for rejecting a precedent based on relevance and legitimacy. Relevance is concerned with situation similarity — the situation that built the precedent is similar to the present situation. Legitimacy is concerned with whether a precedent was established through self‐serving interests or mutual interests. If the precedent was established under asymmetrical power conditions, then the party receiving the current proposal can investigate whether it actually served the interests of the less powerful party in the original negotiation. If not, this could be used to argue against its legitimacy (Crump 2007). Lack of legitimacy appears to be a stronger argument than lack of relevance, although this is an untested proposition within the negotiation literature.

A second technique for questioning the relevance of a precedent involves establishing that the current negotiation or circumstance is “different” from the situation that created the precedent (Lax and Sebenius 1986a). In such cases, negotiators could engage in a detailed comparison of the precedent‐building situation versus the current situation. Whether the power relations are symmetrical or asymmetrical could certainly have an impact on such discussions.

Directly rejecting a proposal because it establishes a precedent is an obvious technique. How and why should I give into your latest unreasonable demand, if in doing so I risk setting a dangerous precedent that invites you to exploit me in the future (Rubin 1985)? For the weaker party, avoiding the establishment of a precedent may be as challenging as rejecting an existing one.

Reciprocity can also play a role in avoiding the establishment of a precedent. One may hesitate to support a precedent's establishment in one sphere if doing so will help the other party apply such a precedent in a different sphere that is perceived to be unacceptable (Dinar 2009). The World Trade Organization dispute filed by the Ukraine against Australia's Tobacco Plain Packaging law, for example, is an apparent attempt by the tobacco industry to stop this precedent before it is adopted by other nations. In this context, the motivation of the Ukraine to work with the tobacco industry in its dispute with Australia is rather curious and reflects an element of reciprocity (WTO Dispute DS434 2014).

Parties can also use linkages, a fourth technique, to avoid a bad precedent. The United States, for example, delayed agreement on film and television market access in its trade negotiations with Canada (through NAFTA), as the precedent that might have been established would have an impact on the U.S. position within the General Agreement on Tariffs and Trade (GATT) Uruguay round negotiations. The Europeans refused to reach an agreement on film and television markets within GATT until the very end as they hoped that the U.S.–Canada deal would give them an advantage (Cameron and Tomlin 2000). What would it have cost the United States in its negotiations with Canada to gain a positive precedent on film and television markets? For example, what would the United States have to give Canada in return for a positive precedent in this sensitive industry, so that it might have been able to use this precedent in GATT against the Europeans? Rather, the United States delayed their agreement with Canada so that it would not negatively influence the GATT negotiations.

Negotiators often make concessions on some issues to achieve higher priority objectives on others. The negotiator must weigh how much present value she or he should give up to secure a favorable precedent or avoid a bad one (Lax and Sebenius 1986b).

Finally, framing and reframing are the fifth technique that negotiators may use to avoid or resist a precedent. Framing is the use of argument, analogy, and metaphor to define or redefine a problem and its potential solutions (Watkins 2001). Reframing a fee as a gift has been found to facilitate agreement (Susskind 1987), as can reframing a ransom payment as a form of reimbursement. For example, during the crisis in which American diplomats were held hostage in Iran in 1980, the administration of President Jimmy Carter reframed payments demanded by the Iranian hostage takers from a form of blackmail or ransom — payment of which would have been unacceptable — to a form of reimbursement or entitlement. The latter “frame” reflected how the Iranian captors viewed such payments and was, to the Americans, a more acceptable solution (Patton 2013). In this case, the amount to be paid was not in dispute; rather, the question was whether the contribution was voluntary or involuntary, thus avoiding a precedent or perceptions of a bad precedent.

In the previous two sections, I summarized the relevant literature on negotiation precedents by focusing on two key aspects: how precedents are established (either by evolution or strategic design) and how, once established, they are applied (adopted, rebuffed, refuted, or avoided). Within these broad conceptual areas, I have identified several additional relevant concepts and paradigms that should be of interest to negotiation researchers and theorists.

A cumulative list of relevant concepts should include:

1. building precedents and applying precedents;

2. precedent presence or absence;

3. the perceived “good” precedent and the perceived “bad” precedent;

4. precedent relevance or lack of relevance;

5. “situation similarity,” for example, the similarity between how a precedent was first established and the situation of its application;

6. precedent legitimacy/validity or lack of legitimacy/validity;

7. mutual interest precedents and self‐serving precedents;

8. precedent impact (i.e., the future value of the precedent);

9. social and cultural norms and psychological orientations that promote application and adoption of precedents;

10. precedent application/adoption as “objective criteria”;

11. precedent adoption and negotiators’ orientations toward the past and the future; and

12. precedents and party power relationships (symmetrical or asymmetrical).

Each of these concepts is worthy of further investigation. For example, I have devoted attention to the use of precedents when power relations between the parties are asymmetrical (Crump 2007, 2011), but we know much less about precedents in negotiations when party relationships are more symmetrical. It may be more difficult to use precedents in an environment with symmetrical power relations, but we do not know the answer to this question because we have not yet studied it.

The following proposed research project illustrates the kind of questions such a study would ask based on the list of concepts and paradigms identified through the literature review. The first set of questions are specifically relevant to a study of symmetrical power relationships between parties. The second set of questions focuses on applying precedents in any negotiation setting.

In negotiations that involve symmetrical power relations:

• Are perceived “good precedents” more likely to be built and perceived “bad precedents” less likely to be built when compared to negotiations involving asymmetrical power relations?

• Are precedents more likely to be based on mutual interests and less likely to be based on self‐serving interests when compared to negotiations involving asymmetrical power relations?

• If precedents in symmetrical negotiations are self‐serving, does the party receiving the advantage offer to compensate the other side?

• In a symmetrical negotiation, did the parties discuss precedent value, and, if so, what method did they use?

In any negotiation setting involving precedents:

• Were precedents used within a negotiation?

• If precedents were used, where did these precedents come from (prior negotiations involving either side, an internal system, an external system)?

• How was precedent relevance established if a precedent came from an external system?

• Was precedent legitimacy used in rejecting a precedent?

• What methods were used to rebuff, reject, or avoid a precedent?

Relevant research could also compare how precedents are created and used over time and in different negotiation settings. Research could also focus on architectural attributes such as precedents in bilateral or multilateral negotiations, or contextual factors comparing the use of precedents in trade negotiations and environmental negotiations, or relational attributes between party leaders such as degree of trust/respect, or relational history/expectations (no prior relations, prior relations, expected future relations), or decision‐making dynamics within negotiation stages such as pre‐negotiation, initial stage, middle stage, end‐game, or agreement implementation (Crump 2015). Each theme reflects an entire research project that could be undertaken to gain greater understanding about the role of precedents in negotiation processes and outcomes.

What kinds of research methodology would best illuminate the questions identified above? As a first step, negotiation researchers could be expected to consider relevant literature from other fields. As I noted previously, the substantial common law literature that considers legal precedent is limited in its applicability to negotiation processes.

Path dependence theory as developed within economics, political science, international relations, and organizational behavior could be relevant to an understanding of negotiation precedent evolution. Within negotiation studies, Peter Kesting and Remiguiusz Smolinski (2007), John Richardson (2007), Jonathan Hughes and colleagues (2012), and Stefanos Mouzas (2016) have come closest to applying elements of path dependence to negotiation analysis.

Second, it is possible to use an experimental design to study precedents within a laboratory setting by conducting a negotiation simulation that contains specific information on a precedent combined with party instructions to use or not use that precedent during the negotiation exercise and then compare process and outcomes. It would also be possible to adjust the fundamental nature of a precedent to examine its potency or effect in a negotiation. For example, within the Hong Kong Property Deal simulation (Crump 2005) both parties know that the property in question sold for $70,000 six years earlier. This prior sale is a precedent. What if the seller is instructed to disclose this information early in the negotiation, late in the negotiation, or not at all? What if the buyer is given variations on the same set of instructions? What if only the seller knows this information?

The sellers’ best alternative in the Hong Kong Property Deal is $50,000. What if the precedent is moved closer to the sellers’ best alternative? What if it is moved further away? The buyers’ budget is $200,000. What if the precedent is moved closer to or further from this resistant point?

Simulations could also be designed to test some of the concepts and paradigms identified through the literature review. These could include:

• an exercise where a precedent is present or absent;

• an exercise with a precedent represented as being “good” or “bad”;

• a precedent that achieves relevance because of situation similarity or a precedent that lacks this quality;

• a precedent that lacks legitimacy because it was established in an asymmetrical environment with a focus on self‐serving interests; and

• a precedent that has legitimacy because it served mutual interests during its construction.

We could then add any number of additional variables (cognition, cooperation, culture, diversity, emotions, ethics, gender, identity, justice, trust, etc.). Thousands of variables can be added to the Hong Kong Property Deal and many other exercises that have one piece of information that meets the definition of a precedent — keeping researchers busy for quite a long time should they choose to explore this uncharted territory.

Third, case analysis through field research is also a suitable methodology for developing insight into the role of precedents in negotiation. Linkage theory (see Raiffa 1982; Watkins and Passow 1996) is particularly suited to the study of precedents because precedents are one part of this larger theory, and case research on precedents could utilize research methodology developed through negotiation linkage theory (see Crump 2007, 2010, 2011). Negotiation linkage theory seeks to establish the logic or inherent relationship between consecutive events — past events and current events, and present events and perceived future events, and their impact on negotiation process and outcome.

Linkage methodology requires the careful management of temporal data based on reports about the past, the present, and the perceived future, although the data is often gathered at one moment in time (Ancona, Okhuysen, and Perlow 2001; Mitchell and James 2001). For example, during Australia–Singapore trade treaty negotiations in 2000–2003, negotiators learned that Australia and the United States would also negotiate a trade treaty in the near future; and, in fact, the United States and Australia began and concluded their trade treaty negotiations in 2003–2004. How did Singapore use its knowledge of Australia's future talks in its negotiations with Australia? And how did the United States use the precedents established in the Australia–Singapore trade negotiations in the U.S.–Australia trade negotiations (Crump 2007)?

Researchers studying the building of precedents and the application of precedents should focus carefully on the facts of the case and when those facts occurred over time — past, present and future. Analysis of the U.S.–Australia negotiations, for example, should carefully consider events along “temporal data points,” i.e., what was their impact before negotiations took place (future negotiation), what actually happened during the negotiations (present negotiation), and what was their impact after negotiations concluded (past negotiation). Methodology has been developed to guide this kind of field research (Crump 2007, 2010, 2011). In those cases in which a precedent built in one negotiation was then applied in a later negotiation, researchers will find it useful to analyze both negotiations and the logic or inherent linkage existing between these two negotiations.

In this study, I reviewed the sparse knowledge about precedents found within the negotiation literature and proposed a definition for a “negotiation precedent.” I also reviewed the substantial literature on precedents within the field of common law, but determined that this work generally lacks relevance to the ways in which precedents are built and used within negotiation.

Using the relevant literature, I next developed a preliminary framework for understanding negotiation precedent around two broad key categories: (1) how precedents are established and (2) how existing precedents are applied in negotiations. These categories can be further broken down as follows: precedents can be established via evolution, without conscious planning, or they can be strategically designed. And understanding precedent application means understanding how and why they are adopted, rebuffed, refuted, or avoided. I also considered the many managerial implications based on the relevant research.

I next identified additional areas of possible inquiry (impact of precedents, relevance of precedents, legitimacy of precedents, impact of social norms on precedent‐establishment, etc.) and from these broad areas I developed a series of specific research questions and a research program. These and other questions could guide the development of additional research in this area.

Finally, I considered the appropriate methods for implementing research on this topic. These include analyzing existing research on path dependence theory and applying it to negotiation; conducting experimental research in a laboratory setting involving negotiation exercises that contain opportunities to apply precedents; and conducting field research with a focus on analysis of cases using insight from negotiation linkage theory.

The use of precedents is a significant but largely unexplored technique within negotiation strategy. Its absence within the negotiation literature is simply remarkable. Further research will enhance understanding of precedents and their control or influence over negotiated decisions. Precedents have the potential to become a more powerful negotiation tool once they are more thoroughly understood through active research and analysis.