I feel, therefore you act: Intrapersonal and interpersonal effects of emotion on negotiation as a function of social power

We examine how emotion (anger and happiness) affects value claiming and creation in a dyadic negotiation between parties with unequal power. Using a new statistical technique that analyzes individual data while controlling for dyad-level dependence, we demonstrate that anger is helpful for powerful negotiators. They feel more focused and assertive, and claim more value; the effects are intrapersonal, insofar as the powerful negotiator responds to his or her own emotional state and not to the emotional state of the counterpart. On the other hand, effects of emotion are generally not intrapersonal for low-power negotiators: these negotiators do not respond to their own emotions but can be affected by those of a powerful counterpart. They lose focus and yield value. Somewhat surprisingly, the presence of anger in the dyad appears to foster greater value creation, particularly when the powerful party is angry. Implications for the negotiation and power literatures are discussed.