BA225

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Essentials of
Negotiation
Part 02: Critical Negotiation
Sub-processes
Chapter 06: Perception, Cognition, and
Emotion
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Chapter Overview
We begin by examining how psychological perception is related to the
process of negotiation, with attention to forms of perceptual distortion.
We then look at how negotiators use information to make decisions about
tactics and strategy—the process of cognition.
• First, we focus on framing—the strategic use of information to define
and articulate a negotiating issue or situation.
• Second, we discuss cognitive biases in information processing.
We experience and express emotion when we interact with others and
negotiating is certainly no exception.
• In the final section, we discuss the role of moods and emotions in
negotiation—both as causes of behavior and as consequences of
negotiated outcomes.
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Perception Defined
Perception is the process by which individuals connect to their
environment, by ascribing meaning to messages and events.
Perception is a “sense-making” process where people interpret their
environment so they can respond appropriately.
Environments are typically complex, so as perceivers we become
selective.
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Perceptual Distortion
Stereotyping.
• Occurs when a person assigns
attributes to another solely on
the basis of the other’s social
or demographic category.
• Once formed, stereotypes can
be highly resistant to change.
Halo effects.
• Occur when people generalize
about a variety of attributes
based on the knowledge of one
attribute of an individual.
• Can be positive or negative.
Selective perception.
• Occurs when perceivers single
out supporting information and
filters out information that does
not confirm their beliefs.
• Perpetuates stereotypes or
halo effects.
Projection.
• Occurs when people assign to
others the characteristics or
feelings that they possess
themselves.
• Usually arises out of a need to
protect one’s own self-concept.
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Framing
A frame is a subjective mechanism allowing people to evaluate situations,
leading them to pursue or avoid subsequent actions.
• Two or more people involved in the same situation or in a complex
problem often see it or define it in different ways.
• These frames can change depending on perspective, or they can
change over time.
How parties frame an issue is a reflection of:
• What they see as critical to the objectives.
• Their outcome expectations and preferences.
• What information they need to argue their case.
• Procedures they use to present their case.
• The manner in which they evaluate outcomes.
Frames are
inevitable,
occurring without
any real intention
by the negotiator.
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Types of Frames
Substantive.
• What the conflict is about.
Outcome.
• A party’s predisposition to
achieving a specific result or
outcome from the negotiation.
Aspiration.
• A predisposition to satisfying a
broader set of interests or
needs in negotiation.
Process.
• How the parties will go about
resolving their dispute.
Identity.
• How the parties define “who
they are.”
Characterization.
• How the parties define the
other parties.
Loss or gain.
• How the parties define the risk
or reward associated with
particular outcomes.
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How Frames Work in Negotiation
• Negotiators can use more than one frame.
• Mismatches in frames between parties are sources of conflict.
• Parties negotiate differently depending on the frame.
• Specific frames may be likely to be used with certain types of issues.
• Particular types of frames may lead to particular types of agreements.
• Parties are likely to assume a particular frame because of various
factors.
• Differences in values, personality, power, or background and social
context may lead parties to adopt different frames.
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Another Approach to Frames: Interests, Rights, and Power
An influential approach to framing disputes suggests that parties in
conflict use one of three frames:
• Interests.
• People are often concerned about what they need, desire, or want.
• Rights.
• People may also be concerned about who is “right”—that is, who
has legitimacy, who is correct, or what is fair.
• Power.
• Power is sometimes based on who is physically stronger, but more
often, it is about imposing other types of costs – economic
pressures, expertise, legitimate authority, and so on.
The way a party frames the problem will likely influence how the other
party responds.
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The Frame of an Issue Changes as the Negotiation Evolves
Disputes tend to transform through “naming, blaming, and claiming.”
• Naming occurs when parties in a dispute label or identify a problem
and characterize what it is about.
• Blaming occurs next, as the parties try to determine who or what
caused the problem.
• Finally, claiming occurs when the individual who has the problem
decides to confront, file charges, or take some other action against the
individual or organization that caused the problem.
Frames are shaped by the bargaining mix.
• Arguing stock issues.
• Arguing the best possible case.
• They may define major shifts and transitions.
• Finally, multiple agenda items shape frames.
Critical to issue
development is the
process of
reframing—changes
to the thrust, tone,
and focus of a
conversation.
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Cognitive Biases – Irrational Escalation of Commitment
An “escalation of commitment” is making
decisions that stick with a failing course of action.
• Even when that commitment constitutes
irrational behavior.
Due in part to biases in perception and judgment.
• Negotiators seek supportive evidence and
ignore disconfirming evidence.
• Initial commitments become set in stone.
• A desire for consistency prevents changing
them—made worse by a desire to save face.
Fight the bias.
• Use an adviser to
serve as a reality
check.
• There may be
less desire to
escalate if regret
is felt following a
previous
escalation
situation.
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Cognitive Biases – Mythical Fixed-Pie Beliefs
Negotiators may assume all negotiations involve
a fixed pie.
• They may approach integrative negotiation
opportunities as zero-sum situations or win-
lose exchanges.
Negotiators focusing on personal gain are most
likely to come under the influence of fixed-pie
beliefs.
• While those focusing on values are less likely
to see a fixed-pie.
Fight the bias.
Chapter 3 provided
some advice, here
are two more.
• Focus on
underlying
interests and
you may see
your fixed-pie
perception is
misguided.
• And hold
negotiators
accountable for
the way they
negotiate.
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Cognitive Biases – Issue Framing and Risk
“Prospect theory” holds that:
• People are more risk-averse when a problem is
framed as a possible gain.
• And risk-seeking when framed as a loss.
When risk-averse, negotiators are likely to accept
any offer simply because they are afraid of losing.
• In contrast, when risk-seeking, negotiators may
wait for a better offer or further concessions.
This process is important as the same offer can
elicit markedly different courses of action
depending on how it is framed in gain-loss terms.
Fight the bias.
• Awareness.
• Sufficient
information.
• Thorough
analysis.
• Reality checks.
• Can be difficult
to fight as
frames may be
tied to deep
values or to
anchors that are
hard to detect.
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Cognitive Biases – Anchoring and Adjustment
These biases are related to the effect of the
standard (or anchor) against which subsequent
adjustments are made during negotiation.
• Anchors can be a trap as the choice of an
anchor may be based on faulty or incomplete
information and therefore misleading.
• Once the anchor is defined, parties tend to
treat it as a benchmark by which to adjust
other judgments.
• Goals—whether realistic or not—can serve as
anchors and may be public or private, as well
as conscious or unconscious.
Fight the bias.
• Thorough
preparation.
• The use of a
devil’s advocate
or reality check.
• Both can help
prevent errors
of anchoring
and adjustment.
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Cognitive Biases – Availability of Information
Negotiators must also be concerned with the
potential bias caused by the availability of
information or how easy information is to retrieve.
• This also affects negotiation through the use of
established search patterns and overvaluation
of information resulting from those searches.
Fight the bias.
• Check
everything for
accuracy.
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Cognitive Biases – The Winner’s Curse
This refers to the tendency to settle quickly on an
item and then subsequently feel discomfort about
a negotiation win that comes too easily.
• The negotiator may suspect the other party
has an unseen advantage; and think they
could have done better, or the deal is bad.
Fight the bias.
• The best
remedy for the
winner’s curse
is to prevent it
from occurring
in the first place.
• Prepare
adequately to
prevent making
an offer that is
unexpectedly
accepted.
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Cognitive Biases – Overconfidence
Overconfidence has a double-edged effect:
• It can solidify a negotiator’s support of
incorrect or inappropriate options, and
• It can lead negotiators to discount the worth or
validity of the judgments of others.
Fight the bias.
• Study results
are mixed.
• So, negotiators
should not
always
suppress
confidence or
optimism.
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Cognitive Biases – The Law of Small Numbers
In negotiation, this applies to the way negotiators
learn and extrapolate from their own experience.
• If experience is limited, the tendency is to
project that experience onto future negotiations.
• This may lead to a self-fulfilling prophecy.
• People who expect to be treated in a
distributive manner will:
• Be more likely to perceive the other party’s
behaviors as distributive, and
• Treat the other party in a more distributive
manner – who then may reciprocate.
Fight the bias.
• Remember, if you
have less
experience, you
may use that
experience
erroneously in the
future.
• Styles and
strategies that
worked in the past
may not work in
the future.
• Especially if the
negotiations differ,
which they will.
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Cognitive Biases – Self-Serving Biases
People often explain another’s behavior by
making attributions.
• Either to the person (internal factors).
• Or the situation (external factors).
In explaining other’s behavior, we often
overestimate the role of internal factors and
underestimate the role of external factors.
• People attribute their own behavior to
situational factors but other's to personal ones.
This bias may also involve distortions in the
evaluation of information.
• The false-consensus effect means
overestimating support and consensus for
your own position, opinions, or behaviors.
Fight the bias.
• Negotiators may
make faulty
judgments
regarding
tactics or
outcome
probabilities.
• Just be aware
of the bias.
• Use a reality
check.
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Cognitive Biases – Endowment Effect
The endowment effect is the tendency to
overvalue something you own or believe you
possess.
• In negotiation, this can lead to inflated
estimations of value that interfere with
reaching a good deal.
• Negotiators are fine with using the status quo
as an anchor, making concessions difficult.
Fight the bias.
• This is very
difficult to fight
or defend
against.
• Use a devil’s
advocate to
make sure you
are not initiating
this effect.
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Cognitive Biases – Ignoring Others’ Cognitions
Failure to consider the other party’s cognitions
allows negotiators to simplify their thinking about
otherwise complex processes.
• This may lead to a distributive strategy and
cause a failure to recognize the contingent
nature of both sides’ behaviors and responses.
In contrast, when negotiators are able to consider
things from the other party’s viewpoint
(perspective taking),
• The risk of impasse is reduced and the
chances for integrative outcomes via logrolling
is enhanced.
Fight the bias.
• Training and
awareness
moderately reduce
effects.
• This can only be
avoided if you
explicitly focus on
forming an
accurate
understanding of
the other’s
interests, goals,
and perspectives.
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Cognitive Biases – Reactive Devaluation
This is the process of devaluing the other
party’s concessions simply because the other
party made them. Leads negotiators to:
• Minimize the magnitude of a concession
made by a disliked other.
• Reduce their willingness to respond with a
concession of equal size.
• Seek even more from the other party once
a concession has been made.
Fight the bias.
• You (or a colleague)
should maintain an
objective view of the
process.
• Clarify each side’s
preferences on
options and
concessions before
any are made.
• Use a third party to
mediate or filter
concession-making
processes.
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Managing Misperceptions and Cognitive Biases
Misperceptions and cognitive biases typically arise out of conscious
awareness as negotiators gather and process information.
• The first level of managing such distortions is to be aware that they
can occur.
• Awareness may not be enough—simply knowing about them does
little to counteract their effects.
• Be aware of the existence of these biases.
• Understand their negative effects.
• Be prepared to discuss them when appropriate with your own team
and with counterparts.
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Mood, Emotion, and Negotiation
The role of mood and emotion in negotiation has been an increasing
body of theory and research during the last two decades.
• The distinction between mood and emotion is based on three
characteristics: specificity, intensity, and duration.
• Mood states are more diffuse, less intense, and more enduring than
emotion states, which tend to be more intense and targeted.
• Emotions play important roles at various stages of negotiation.
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Research Findings in the Study of Mood, Emotion, and
Negotiation
• Negotiations create both
positive and negative
emotions.
• Positive emotions generally
have positive consequences.
• Aspects of the process can
lead to positive emotions.
• Negative emotions generally
have negative consequences.
• They may lead to defining
the situation as competitive.
• They may undermine the
ability to analyze the
situation accurately.
• Negative emotions may lead
parties to escalate the conflict.
• Negative emotions may lead to
retaliation and discourage
integrative outcomes.
• Not all negative emotions have
the same effect.
• Negotiators make smaller
demands of worried or
disappointed opponents.
• But fewer concessions to
guilty or regretful
opponents.
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The Effects of Positive and Negative Emotion in Negotiation
Positive feelings may have negative consequences.
• Negotiators in a positive mood may be susceptible to deceptive tactics.
• And achieve less-optimal outcomes.
• If there is no agreement, defeat may be harsh and counterproductive.
Negative feelings may create positive outcomes.
• Generally, well expressed anger can lead to positive outcomes.
• Negative emotion has information value as a danger signal.
Anger may signal toughness, but not always.
• Can work in your favor if the anger is seen
as appropriate but it can backfire.
• Less likely to work with a deceiver or one
who has little at stake to begin with.
Negative emotion can
benefit powerful
negotiators, but provides
less focus and poorer
outcomes for low-power
negotiators.
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Emotions Can Be Used Strategically as Negotiation Gambits
Emotions may be used strategically as influence tactics in negotiation.
• Negotiators exhibiting positive emotionality were more likely to induce
compliance with ultimatum offers.
• A negotiator displaying sadness elicits concern from the other party
and can extract concessions and claim value.
• Works only when displayed by those with low-power.
• Emotional manipulation does not work for high-power negotiators.
Negotiators may also engage in the regulation or management of the
emotions of the other party.
• Effective negotiators adjust their messages to adapt to what they
perceive as the other party’s emotional state.
• Known as emotional intelligence.
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© McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom.
No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.