Cooperation and Competition in Public-Sector Negotiations: A Laboratory Experiment

Abstract

Negotiating is a core activity in the public and private sector. Because of varying public service motivation (PSM) between public- and private-sector employees, we expect them to behave differently in negotiations. Moreover, one-shot negotiation settings are often studied even as many real-world negotiations are repeated exchanges. We apply a repeated linear public goods game in a laboratory experiment to test the link between PSM and the level of cooperation by using a sample of graduate and undergraduate students. The results show that high-PSM participants, indeed, contributed more over the entire experiment, and therefore, acted more cooperatively in a repeated negotiation. Matching negotiators to opponents with high-PSM, low-PSM did not alter the level of cooperation in negotiation. Based on this, we conclude that cooperation in repeated negotiations is not conditional on the PSM of opponents. We conclude with implications for theory and practice.