The key components of social interactions like negotiation are perception, cognition, and emotion. Perception involves how people make sense of their environment and can be distorted through biases like stereotyping. Cognition refers to how people frame issues and are subject to biases such as anchoring. Emotion impacts negotiation - positive emotions tend to facilitate integrative outcomes while negative emotions usually hinder negotiations. Managing perceptions, frames, biases, and emotions is important for effective negotiation.

1. CHAPTER FIVE
Perception, Cognition,
and Emotion
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 5-2
Perception, Cognition, and
Emotion in Negotiation
The basic building blocks of all social
encounters are:
• Perception
• Cognition
– Framing
– Cognitive biases
• Emotion

3. 5-3
Perception
Perception is:
• The process by which individuals connect to
their environment.
• A “sense-making” process

4. 5-4
The Process of Perception
The process of ascribing meaning to messages and events is strongly influenced
by the perceiver’s current state of mind, role, and comprehension of earlier
communications
People interpret their environment in order to respond appropriately
The complexity of environments makes it impossible to process all of the
information
People develop “shortcuts” to process information and these “shortcuts” can
create perceptual errors

5. 5-5
Perceptual Distortion
• Four major perceptual errors:
– Stereotyping
– Halo effects
– Selective perception
– Projection

6. 5-6
Stereotyping and Halo Effects
• Stereotyping:
– Is a very common distortion
– Occurs when an individual assigns attributes to another
solely on the basis of the other’s membership in a
particular social or demographic category
• Halo effects:
– Are similar to stereotypes
– Occur when an individual generalizes about a variety of
attributes based on the knowledge of one attribute of an
individual

7. 5-7
Selective Perception
and Projection
• Selective perception:
– Perpetuates stereotypes or halo effects
– The perceiver singles out information that supports a prior
belief but filters out contrary information
• Projection:
– Arises out of a need to protect one’s own self-concept
– People assign to others the characteristics or feelings that
they possess themselves

8. 5-8
Framing
• Frames:
– Represent the subjective mechanism through which people
evaluate and make sense out of situations
– Lead people to pursue or avoid subsequent actions
– Focus, shape and organize the world around us
– Make sense of complex realities
– Define a person, event or process
– Impart meaning and significance

9. 5-9
Types of Frames
• Substantive
• Outcome
• Aspiration
• Process
• Identity
• Characterization
• Loss-Gain

10. 5-10
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

11. 5-11
Interests, Rights, and Power
Parties in conflict use one of three frames:
• Interests: people talk about their “positions” but often
what is at stake is their underlying interests
• Rights: people may be concerned about who is
“right” – that is, who has legitimacy, who is correct,
and what is fair
• Power: people may wish to resolve a conflict on the
basis of who is stronger

12. 5-12
The Frame of an Issue Changes as
the Negotiation Evolves
• Negotiators tend to argue for stock issues or concerns
that are raised every time the parties negotiate
• Each party attempts to make the best possible case for
his or her preferred position or perspective
• Frames may define major shifts and transitions in a
complex overall negotiation
• Multiple agenda items operate to shape issue
development

13. 5-13
Some Advice about Problem
Framing for Negotiators
• Frames shape what the parties define as the key issues
and how they talk about them
• Both parties have frames
• Frames are controllable, at least to some degree
• Conversations change and transform frames in ways
negotiators may not be able to predict but may be
able to control
• Certain frames are more likely than others to lead to
certain types of processes and outcomes

14. 5-14
Cognitive Biases in Negotiation
• Negotiators have a tendency to make
systematic errors when they process
information. These errors, collectively labeled
cognitive biases, tend to impede negotiator
performance.

15. 5-15
Cognitive Biases
• Irrational escalation of
commitment
• Mythical fixed-pie
beliefs
• Anchoring and
adjustment
• Issue framing and risk
• Availability of
information
• The winner’s curse
• Overconfidence
• The law of small
numbers
• Self-serving biases
• Endowment effect
• Ignoring others’
cognitions
• Reactive devaluation

16. 5-16
Irrational Escalation of Commitment
and Mythical Fixed-Pie Beliefs
• Irrational escalation of commitment
– Negotiators maintain commitment to a course of action
even when that commitment constitutes irrational behavior
• Mythical fixed-pie beliefs
– Negotiators assume that all negotiations (not just some)
involve a fixed pie

17. 5-17
Anchoring and Adjustment
and Issue Framing and Risk
• Anchoring and adjustment
– The effect of the standard (anchor) against which
subsequent adjustments (gains or losses) are measured
– The anchor might be based on faulty or incomplete
information, thus be misleading
• Issue framing and risk
– Frames can lead people to seek, avoid, or be neutral about
risk in decision making and negotiation

18. 5-18
Availability of Information
and the Winner’s Curse
• Availability of information
– Operates when information that is presented in vivid or
attention-getting ways becomes easy to recall.
– Becomes central and critical in evaluating events and
options
• The winner’s curse
– The tendency to settle quickly on an item and then
subsequently feel discomfort about a win that comes too
easily

19. 5-19
Overconfidence
and the Law of Small Numbers
• Overconfidence
– The tendency of negotiators to believe that their ability to
be correct or accurate is greater than is actually true
• The law of small numbers
– The tendency of people to draw conclusions from small
sample sizes
– The smaller sample, the greater the possibility that past
lessons will be erroneously used to infer what will happen
in the future

20. 5-20
Self-Serving Biases
and Endowment Effect
• Self-serving biases
– People often explain another person’s behavior by making
attributions, either to the person or to the situation
– There is a tendency to:
• Overestimate the role of personal or internal factors
• Underestimate the role of situational or external factors
• Endowment effect
– The tendency to overvalue something you own or believe
you possess

21. 5-21
Ignoring Others’ Cognitions
and Reactive Devaluation
• Ignoring others’ cognitions
– Negotiators don’t bother to ask about the other party’s
perceptions and thoughts
– This leaves them to work with incomplete information, and
thus produces faulty results
• Reactive devaluation
– The process of devaluing the other party’s concessions
simply because the other party made them

22. 5-22
Managing Misperceptions and
Cognitive Biases in Negotiation
The best advice that negotiators can follow is:
• Be aware of the negative aspects of these biases
• Discuss them in a structured manner within the team
and with counterparts

23. 5-23
Mood, Emotion, and Negotiation
• The distinction between mood and emotion is
based on three characteristics:
– Specificity
– Intensity
– Duration

24. 5-24
Mood, Emotion, and Negotiation
• Negotiations create both positive and negative
emotions
• Positive emotions generally have positive
consequences for negotiations
– They are more likely to lead the parties toward more
integrative processes
– They create a positive attitude toward the other side
– They promote persistence

25. 5-25
Mood, Emotion, and Negotiation
• Aspects of the negotiation process can lead to
positive emotions
– Positive feelings result from fair procedures during
negotiation
– Positive feelings result from favorable social comparison

26. 5-26
Mood, Emotion, and Negotiation
• Negative emotions generally have negative
consequences for negotiations
– They may lead parties to define the situation as competitive
or distributive
– They may undermine a negotiator’s ability to analyze the
situation accurately, which adversely affects individual
outcomes
– They may lead parties to escalate the conflict
– They may lead parties to retaliate and may thwart
integrative outcomes
– Not all negative emotion has the same effect

27. 5-27
Mood, Emotion, and Negotiation
• Aspects of the negotiation process can lead to
negative emotions
– Negative emotions may result from a competitive mind-set
– Negative emotions may result from an impasse
– Negative emotions may result from the prospect of
beginning a negotiation
• Effects of positive and negative emotion
– Positive feelings may generate negative outcomes
– Negative feelings may elicit beneficial outcomes
• Emotions can be used strategically as negotiation
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