Entrepreneurs' Bargaining Behavior: A Framed Field Experiment

We study how entrepreneurial experience influences bargaining behavior and success. In a framed field experiment we compare entrepreneurs and non-entrepreneurs in a series of bargaining tasks. We find that entrepreneurs negotiate harder than non-entrepreneurs: they make higher initial claims and fewer offers while expressing emotions more often, arguing more about prices and rejecting offers more frequently than non-entrepreneurs. These bargaining behaviors lead to significantly higher profits when entrepreneurs close a deal, but they also lead them to closing significantly fewer deals than non-entrepreneurs. We discuss the implications of these results for entrepreneurial education.