Chinese values and negotiation behaviour: A bargaining experiment

•International Business research highlights Chinese cultural values that affect negotiation behaviour.•These insights are mostly based on interviews, surveys and simulations.•We conduct the first controlled experimental test with compatibly incentivised Chinese subjects.•Harmony, face and competitiveness affect decisions but only in the final bargaining stage.

The importance of Chinese culture in cross-national negotiation has become conventional wisdom in international business research and practice. However, empirical work has not sufficiently established whether, how and under what conditions specific cultural values of the Chinese affect their negotiation decisions. This paper reports an experiment with a purpose-designed game task in which Chinese subjects divide a fixed gain over escalating stages. We find that concerns for face and harmony promote cooperative negotiation decisions while desire to win and risk seeking accentuate competitive ones. Values only predict behaviour in the critical, final stage of the bargaining process supporting a dynamic view of the effect of culture in negotiation.