cognitive biases in negotiation

common perceptual errors

* distortion by generalization.
* distortion by anticipation.

distortion by generalization

* stereotyping.
* halo effects.

distortion by anticipation

* selective perception.
* projection.

stereotyping

assigning attributes to another party based on their membership of a particular group.

halo effects

generalizing about a variety of attributed based on the knowledge of one attribute of an individual.

selective perception

holding a prior belief and singling out information that supports and reinforces it.

projection

ascribing to others your own feelings and characteristics.

irrational escalation of commitment

maintain commitment to a course of action, even when it is irrational.

once a course of action is decided in an irrational escalation of commitment:

* negotiators seek confirming evidence for that choice.
* initial commitments become set in stone.

mechanism for irrational escalation of commitment

a desire for consistency, to save face, to maintain an impression of expertise/control in front of others.

counter for irrational escalation of commitment

have an advisor (i.e., uninvolved party) serve as a reality checkpoint.

mythical fixed pie belief

approach integrative negotiation opportunities as zero-sum games or win-lose exchanges → cannot engage in mutually beneficial trade-offs.

anchoring and adjustment

standard (anchor) against which subsequent adjustments are made during negotiation; choice of an anchor (e.g., initial offer, intended goal) can be based on faulty/incomplete information.

frame

point of view that people use when they gather information and solve problems.

reference point in framing

affects framing and risk-taking behavior.

gain framing

risk averse; accepts any viable offer because they’re afraid of losing.

loss framing

risk seeking; passes up offer and waits for better offer.

results of loss framing

* produces fewer concessions.
* reaches fewer agreements.
* perceives outcomes as less fair.

loss framing remedies

* sufficient information.
* thorough analysis.
* reality checks.

the winner’s curse

settles too quickly and feels discomfort about a negotiation win that comes too easily.

law of small numbers

* tendency of people to draw conclusions from small sample sizes.
* smaller sample size = greater possibility that past lessons will be erroneously used to infer events in the future.

reactive devaluation

process of devaluing other party’s concessions simply because other party made them.

fundamental attribution error

over-attributes behavior to personal rather than situational dependencies.

counter for fundamental attribution error

* separate people from the problem.
* account for situations and contexts when evaluating others.

overconfidence

tendency to believe one’s own ability to be correct/accurate is greater than actually true; more persistent and concerned about personal outcomes.

endowment effect

tendency to overvalue something you own/believe you possess.

ignoring other’s cognitions

doesn’t ask about other party’s perceptions/thoughts and simplifies other’s behavior; distributive strategy.

perception

process by which individuals connect to their environment.

false-consensus effect

tendency to overestimate degree of support and consensus that exists for one’s own position/opinions/behaviors.

base-rate fallacy

when one ignores statistical information about the likelihood that some event will occur and instead is swayed by other information that isn’t really relevant.

self-serving bias

explains other party’s behavior by making attributions, either to the party or to the situation.

consequences of positive emotions in negotiations

* more likely to lead parties toward more integrative processes.
* create positive attitude toward the other side.
* promote persistence.
* set the stage for successful subsequent negotiations.

creating positive emotions in negotiations

* fair procedures.
* favorable social comparisons.

consequences of negative emotions in negotiations

* define situation as competitive/distributive.
* undermine negotiator’s ability to analyze situation accurately (adversely affects individual outcomes).
* escalate conflict.
* retaliate and may thwart integrative outcomes.

creating negative emotions in negotiations

* competitive mindset.
* impasse.
* merely from prospect of beginning a negotiation.