Because learning changes everything Negotiation Section 02 Negotiation

Because learning changes everything. ® Negotiation Section 02: Negotiation Subprocesses Chapter 06: Perception, Cognition, and Emotion © 2019 Mc. Graw-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 Mc. Graw-Hill Education.

Perception Defined Perception is the process by which individuals connect to their environment. • Negotiators are guided by perceptions of past situations and current attitudes and behaviors. • The goal is to perceive and interpret with accuracy what the other party is saying and meaning. Perception is a “sense-making” process of interpreting the environment so as to respond appropriately. • It is impossible to process all the available information. • As perceivers, we become selective, tuning out some stimuli. • Using perceptual “shortcuts” may come at the expense of accuracy. © Mc. Graw-Hill Education 2

Perceptual Distortion In negotiation, a perceiver may create a preconceived notion about the other party. • This may lead to biases and errors in perception and communication. Here, we discuss four major perceptual errors: stereotyping, halo effects, selective perception, and projection. • Stereotyping and halo effects are distortion by generalization – small bits of information are used to draw conclusions about individuals. • Selective perception and projection involve anticipating certain attributes and qualities in another person. • The perceiver filters and distorts information to arrive at a predictable and consistent view of the other person. © Mc. Graw-Hill Education 3

Stereotyping One individual assigns attributes to another solely on the basis of membership in a social or demographic category. • A person is assigned to a group, such as age – old or young. • A broad range of other characteristics of that group are assigned. • Conclusion is from generalization of qualities – accurate or not. Once formed, stereotypes are highly resistant to change. • Creates a “we” and “they” mindset. • People are more likely to resort to stereotyping due to time pressure, cognitive stress, and mood. • Also when conflicts involve values, ideologies, and direct competition. © Mc. Graw-Hill Education 4

Halo Effects These occur when a person generalizes a variety of attributes based on knowledge of one attribute. • May be positive or negative. Occurs when there is little experience with a person, the person is well known, or the qualities have moral implications. Halo effects and stereotyping are common hazards in negotiation. • Negotiators form rapid impressions based on limited information. • They tend to maintain these judgments as they get to know each other. © Mc. Graw-Hill Education 5

Selective Perception A perceiver singles out information that supports a prior belief and filters out information that does not confirm the belief. • This perpetuates stereotyping or halo effects. • If an initial smile leads the other to believe a person is honest, they may downplay any statements showing crafty intent. • If the negotiator perceives the same smile as a smirk, the negotiator may downplay offers to establish an honest relationship. • In both cases, the negotiator’s bias may affect how the other party’s behavior is perceived and interpreted. © Mc. Graw-Hill Education 6

Projection Occurs when people assign to others the characteristics or feelings they possess themselves. • Arises as a way to protect a person’s own self-concept. • Negotiator’s may assume the other party will respond in the same manner they would if positions were reversed. People respond differently to similar situations so projecting your feelings onto the other negotiator may be incorrect. Projection may lead a negotiator to overestimate how much the other party knows about their preferences. © Mc. Graw-Hill Education 7

Framing A frame is the subjective mechanism people use to evaluate and make sense out of situations. • Frames define a person, event, or process and separate it from the complex world around it. Due to differences, people frame things differently. • Frames can change due to perspective, or they can change over time. In negotiation, disputes are open to interpretation and the frame will likely affect perceptions and reactions. • Frames reflect objectives, expectations, presentation, and evaluation. Frames are inevitable, often occurring without intention. © Mc. Graw-Hill Education 8

Types of Frames Substantive. Process. • What the conflict is about. • How the dispute is resolved. Outcome. Identity. • A predisposition to achieving a specific result or outcome. • How parties define who they are. • Common in distributive negotiations. Aspiration. • A predisposition to satisfy a broad set of interests and needs. • Likely in integrative negotiation. © Mc. Graw-Hill Education Characterization. • How a person defines others. Loss or gain. • How a person defines risk or reward of a particular outcome. • Loss is the cost, value is the gain. 9

How Frames Work in Negotiation Research is difficult to conduct, but linguistic analysis of negotiation transcripts provides some insight. • 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 used for certain types of issues. • Particular frames may lead to particular types of agreements. • Parties are likely to assume a frame due to factors such as differences in values, personality, power, background and social context. © Mc. Graw-Hill Education 10

Another Approach to Frames: Interests, Rights, and Power This views parties in conflict as using one of three frames. • Interests. • Negotiating “positions” are often due to underlying interests. • Rights. • Who is “right” - who has legitimacy, who is correct, or what is fair. • Power. • Usually imposes costs – economic pressure, expertise, authority, etc. People have a choice of how to approach a negotiation in terms of interests, rights, and power. • The same negotiation, framed differently, will lead to different outcomes. © Mc. Graw-Hill Education 11

The Frame Changes as the Negotiation Evolves It is important to consider patterns of change (transformation) that occurs as parties communicate with each other. • Naming occurs when parties label and characterize a problem. • Blaming is next, the parties determine who or what was the cause. • Claiming occurs when the person with the problem takes action. Factors affecting how conversations and frames are shaped. • Negotiators tend to argue for stock issues. • Each party tries to make the best possible case for their position. • Frames may define shifts in a negotiation – diagnosis, formula, detail. • Multiple agenda items shape the issue development. © Mc. Graw-Hill Education 12

Reframing is the process of changing the thrust, tone, and focus of a conversation, shaping issues in several ways. • Arguments attacking the significance of a problem or solution feasibility. • The parties ‘make a case’ on the logic of needs or positions. • Management and interaction of issues on the negotiation agenda. Reframing is a dynamic process occurring in a conversation as parties look for ways to reconcile perspectives. • It may be done intentionally, or emerge from the conversation. • Either way, the parties often propose a new approach to a problem. © Mc. Graw-Hill Education 13

Prescriptive Advice Frames shape what the parties define as the key issues and how they talk about them. • Ensure your preferred frames are acknowledged by others. Both parties have frames. • Reframing for a match does not guarantee cooperation. Frames are controllable, to some degree. • You may shift the conversation toward the frame you prefer. Conversations transform frames in unpredictable ways. • Track the shifts and understand where they may lead. Certain frames are more likely to lead to certain outcomes. • Recognition allows reframing to pursue constructive outcomes. © Mc. Graw-Hill Education 14

Cognitive Biases in Negotiation We have examined how information is perceived, filtered, distorted, and framed. In this section, we examine how negotiators use information to make decisions during the negotiation. Systematic errors while processing information, collectively labeled cognitive biases, are many. Here, we will discuss a dozen cognitive biases of particular interest to negotiator performance. © Mc. Graw-Hill Education 15

Irrational Escalation of Commitment An “escalation of commitment” is the tendency to make decisions that stick with a failing course of action. • Repeated decision making in the face of negative feedback, uncertainty of goal attainment, and choice of continuing. Due in part to biases in individual perception and judgment. • Desire for consistency and saving face prevents change. Overconfidence is another factor that can drive escalation. • Most likely with a public decision rather than one made in private. One way to combat these tendencies is to have an advisor serve as a reality check. © Mc. Graw-Hill Education 16

Mythical Fixed-Pie Beliefs Many negotiators believe negotiations involve a fixed pie. • They assume integrative settlements are not possible and so do not search for them. Tendency to see a fixed pie varies depending on how people view the nature of a given conflict situation. • Time constraints or cultural values may vary fixed-pie beliefs. We previously looked at minimizing fixed-pie belief through procedures for inventing options – now, two more approaches. • By focusing on underlying interests, you are more likely to see that your fixed-pie perceptions is misguided. • Also, hold negotiators accountable for the way they negotiate. © Mc. Graw-Hill Education 17

Anchoring and Adjustment This is related to the effect of the standard (or anchor) against which further adjustments are made during negotiation. • Anchors can become a trap if the choice of an anchor is based on faulty or incomplete information and becomes misleading in itself. • Once defined, both parties tend to treat anchors as a valid benchmark by which to adjust other judgments. Goals in negotiation can serve as anchors. • May be visible or invisible, conscious or unconscious. Preparation, and the use of a reality check, helps prevent errors of anchoring and adjustment. © Mc. Graw-Hill Education 18

Issue Framing and Risk Frames lead people to seek, avoid, or be neutral about risk. The tendency to seek or avoid risk may be based on the reference point against which offers/concessions are judged. • The number you use to evaluate negotiation progress and success. Keep two things in mind about the effect of frames on risk. • Negotiators are not usually indifferent to risk. • But, they should not trust their intuitions regarding it. Risk-averse negotiators are apt to accept any viable offer while risk-seekers will wait for a better offer. • Remedies include awareness, information, analysis, and reality checks. © Mc. Graw-Hill Education 19

Availability of Information Be concerned with the potential bias caused by the availability of information or how easy it is to retrieve. • How easily it can be recalled and used to inform or evaluate a process. This also affects negotiation through the use of established search patterns. • Without proper planning, a negotiator may become overwhelmed by this bias and lose the benefits of thorough analysis. The remedy is clear. • Do not assume the first information is complete or the best. © Mc. Graw-Hill Education 20

The Winner’s Curse When negotiation ends quickly, a negotiator may feel discomfort about a win that comes too easily. • “I could have done better. ” This may stem from counterfactual throught processes which entertain the possibility of “what might have been. ” • The easier it is to imagine a better alternative, the less satisfied the negotiator will be. • This can also affect future negotiating behavior. The best remedy is to prevent it from occurring. • Advance planning helps a negotiator avoid making an offer that is unexpectedly accepted. © Mc. Graw-Hill Education 21

Overconfidence This is the tendency to believe your ability to be correct is greater than is actually true – with a double-edged effect. • It can solidify the degree to which negotiators support positions or options that are incorrect or inappropriate. • Negotiators may discount the validity of the judgments of others, shutting out other information needed for integrative solutions. Overconfidence can lead to escalation of commitment. • Do not suppress confidence or optimism, avoid overconfidence. © Mc. Graw-Hill Education 22

The Law of Small Numbers People tend to draw conclusions from small sample sizes. • In negotiation, this applies to the way negotiators learn and extrapolate from their own experience. • This often leads to a self-fulfilling prophecy. • Styles and strategies that worked in the past may not in the future. An example is the “hot hand” fallacy – the incorrect belief a streak of events is due to momentum and will continue. • No evidence supports the presence of “hot-hand” streaks in sports. © Mc. Graw-Hill Education 23

Self-Serving Biases People often explain other’s behavior by making attributions, either to the person or the situation. • Tending to overestimate the causal role of personal factors and underestimate the causal role of situational factors. • Known as the fundamental attribution error. • The actor-observer effect worsens the bias as people attribute their own behavior to situation factors and others’ to personal factors. Self-serving bias may distort evaluation of information. • The false-consensus effect overestimates the support a position has. • The base-rate fallacy ignores relevant information for non-relevant. • Assuming our own beliefs are based on credible information and opposing beliefs are based on misinformation. © Mc. Graw-Hill Education 24

Endowment Effect This is the tendency to overvalue something you own or believe you possess. • This is likely tied to loss aversion – the owner frames the sale of an item as a loss and assigns a higher value than a buyer does. In negotiation, this can lead to inflated estimations of value that interfere with reaching a good deal. • Seen as an inflated personal attachment to the status quo. A similar process occurs when an accepted offer is liked more than a negotiator’s own proposals. • To reduce dissonance, add subjective value to the outcome. © Mc. Graw-Hill Education 25

Ignoring Others’ Cognitions Failure to consider others’ cognitions allows negotiators to simplify their thinking about complex processes. • Usually leads to a distributive strategy. • In contrast, when considering the other party’s viewpoint – a capacity known as “perspective taking” – the risk of impasse is reduced. • The chances of achieving integrative outcomes through logrolling increases. The drive to ignore others’ cognitions is deep-seated. • It can be avoided only if negotiators focus on forming an accurate understanding of the other party’s interests, goals, and perspectives. © Mc. Graw-Hill Education 26

Reactive Devaluation This is the process of devaluing the other party’s concessions simply because the other party made them. This leads negotiations to: • Minimize the magnitude of a concession made by a disliked other. • Reduce their willingness to respond with a concession of equal size. • Or seek even more from the other party once a concession is made. Reactive devaluation may be minimized by the following. • Maintain an objective view of the process, or have someone else do so. • Clarify each side’s preferences and concessions before any are made. • Use a third party to mediate or filter concession-making processes. © Mc. Graw-Hill Education 27

Managing Misperceptions and Cognitive Biases These typically arise out of conscious awareness as negotiators gather and process information. • The result can be overreliance on faulty assumptions and data. The first level of managing distortions is awareness. Reframing is a potentially effective remedy. Telling people about biases do not make them go away. One avenue involves the intervention of outside parties. • During mediation, negotiators were less susceptible to judgment biases and perceived the process as more value-creating and fair. © Mc. Graw-Hill Education 28

Mood, Emotion, and Negotiation In research, negotiators are portrayed as rational beings – calculating, calm, and in control. • Overlooking the role played by emotions in the negotiation process. The distinction between mood and emotion is based on: • Specificity. • Intensity. • Duration. Mood states are more diffuse, less intense, and more enduring than emotion states. • Which are more intense and directed at specific targets. © Mc. Graw-Hill Education 29

Selected Research Findings Negotiation creates both positive and negative emotions. • Positive emotions are termed ‘happiness, ’ while negative emotions may stem from dejection or agitation. Positive emotions may have positive outcomes for negotiations. • More flexibility and concession making and less hostility. Aspects of the negotiation process can lead to positive emotions – fair proceedings and favorable social comparisons. Negative emotions may have negative negotiation outcomes. • Not all negative emotions have the same effect. © Mc. Graw-Hill Education 30

Research Continued Aspects of the negotiation process can lead to negative emotions. • They may stem from a competitive mind-set. Positive feelings may have negative consequences and negative feelings may create positive outcomes. • Negative emotion can sometimes benefit the negotiator. Emotions can be used strategically as negotiation gambits. • Negotiators may manipulate emotion to get the other side to adopt certain beliefs or take certain action. • There are ethical implications to using contrived emotion. © Mc. Graw-Hill Education 31

End of Chapter 06. Because learning changes everything. ® www. mheducation. com © 2019 Mc. Graw-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 Mc. Graw-Hill Education.