Bob Sutton points to some interesting research on the impact of culture on negotiations:

There is a stream of research on negotiation that shows the strategic expression of anger is effective, apparently because it is taken as a sign you are “tough” and thus leads your intimidated opponent to make concessions.  A new study by Hajo Adam and his colleagues suggests that this may be a culturally specific finding, which applies to people of Western descent but not necessarily others.  In a pair of studies that compared people of European descent to people of East Asian descent they found, in both a hypothetical and a more realistic negotiation, that people in the two groups had opposite reactions to negotiating with an angry opponent:

“Western-ancestry students were more likely to make a concession to their negotiation partner whereas the East-Asian ancestry students were less likely to do so.”

Various iterations of the study pinpointed that the expectation of what was considered “culturally appropriate” was the key determinant of subject reaction.

Intuitively, I think this makes a great deal of sense.  Too often, we let rational models of negotiation and interaction dominate our thinking on the subject and forget that context, culture, and psychology have a substantial impact on how such strategies will work in practice.

The strategy of expressing anger and displaying strength and toughness can be traced back to the earliest work of Schelling and indirect coercion.  Actor A wants Actor B to change the status quo (i.e. make a concession).  To do so, Actor A sends a signal that conveys their toughness and resolve which should influence Actor B’s behavior given this new information about A’s type and what they are capable of.

From a rational-actor perspective, this makes sense.  However, problems can arise when we try to implement such a strategy in practice.  People don’t always conform to the rational-actor model.  In the case of the research by Adam, et al., the audience’s reaction is influenced by their perception of what is appropriate versus what is utility maximizing.  (One might say that what is considered utility-maximizing is culturally determined.)  This means that when you send a signal you have to take into account the perspective of your audience (culture, psychology, etc).  It may not always be the determining factor, but it may significantly affect how your signal is received and the behavior it provokes.

However, I think there are limitations to the generalizability of the research since it didn’t address a crucial element: multiple audiences.

Signals are rarely sent in a vacuum.  Particularly when it comes to business, people rarely interact in a purely one-on-one setting, where their actions are guaranteed to stay hidden from any third parties.  Typically, the signals we send will be seen and interpreted by multiple audiences and this can significantly complicate negotiations.  Public bullying may backfire and cause the target to dig in their heels instead of offering concessions.  Signals must not only be clear enough to minimize the variance around their interpretation.  They must also avoid creating a situation that actually makes it harder for the target to behave in the way the sender wants them to.

The research by Adam, et al., looked at pairs of negotiators separated from other observers.  If they had introduced third parties my guess is that their results would have been different.  Backing down to an aggressive threat would likely be viewed as unacceptable across both Western and East Asian subjects for related reasons.  For many Westerners, backing down to a threat would signal weakness and a lack of resolve.  If third parties are present and see this they may assume that the subject that made the concession could be bullied in a similar manner in the future.  In order to avoid being challenged in this way by multiple actors down the road, the subject is more likely to stand firm and avoid giving any concessions under duress.*  A similar dynamic is likely to play out with those of East Asian decent given the importance of “face” and honor in those cultures.  When additional subjects are introduced into the experiment the results are less likely to break down among cultural lines.

(Thanks to Andrew Chen for pointing to Sutton’s post)

*Some have dubbed this the “Culture of Honor” and theorized that, in the United States, it explains why Southerners may be more prone to violence than Northerners.  This culture is structurally determined, however.  Cultures of Honor are likely to develop where a) individuals are at economic risk from other citizens (e.g. where what is most valuable is easy to transport), and b) where the state is weak or nonexistent and cannot reliably protect personal property.  The argument goes that, for structural reasons, herding societies are the most prone to develop a Culture of Honor and herding (as well as settlers immigrating from herding cultures) was more prevalent in the South.  Therefore, a Culture of Honor was inculcated amongst Southerners but not Northerners.