Perception, Cognition, and Emotion in Negotiation

Perception, Cognition, and Emotion in Negotiation

The basic building blocks of all social encounters are:



–   Framing

–   Cognitive biases



Perception is:

•      The process by which individuals connect to their environment.

•      A “sense-making” process

•      A complex physical and psychological process

•      A process of screening, selecting and interpreting stimuli so that they have meaning to the individual (Steers,1084).

The Role of Perception

Perceptual Distortion

•     Four major perceptual errors:

–  Stereotyping

–  Halo effects

–  Selective perception

–  Projection

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

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


•      Framing:

–    The strategic use of information to define and articulate a negotiating issue or situation

–    Represent the subjective mechanism through which people evaluate and make sense out of situations

–    Lead people to pursue or avoid subsequent actions

–    Helps to focus, shape and organize the world around us

–    Make sense of complex realities

–    Define a person, event or process

–    Impart meaning and significance


Types of Frames

•      Substantive: core conflict issue

•      Outcome: inclination towards specific outcome

•      Aspiration: inclination towards fulfilling broader set of  interest

•      Process:

•      Identity: how the parties are distinguishing themselves

•      Characterization: how the parties are defining their opponents

•      Loss-Gain

How Frames Work in Negotiation

•      Negotiators can use more than one frame

•      Mismatches in frames between parties are sources of conflict

•      Particular types of frames may lead to particular types of arguments

•      Specific frames may be likely to be used with certain types of issues

•      Parties are likely to assume a particular frame because of various factors

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

The Frame of an Issue Changes as the Negotiation Evolves

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

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

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.

Cognitive Biases

•           Irrational escalation of commitment

•           Mythical fixed-pie beliefs

•           Anchoring and adjustment

•           Issue framing and risk

•           Availability of information

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

–    To avoid it parties should involve advisor who will work as a reality check point

•      Mythical fixed-pie beliefs

–    Negotiators assume that all negotiations (not just some) involve a fixed pie

–    To avoid it parties should introduce accountability in the negotiation context

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

–    Thorough preparation, along with reality check can help to avoid it

•      Issue framing and risk

–    Frames can lead people to seek, avoid, or be neutral about risk in decision making and negotiation

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

–    The best remedy for winner’s curse is to prevent it from occurring

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

Confidence or Overconfidence?

We came to Iceland to advance the cause of peace. . .and though we put on the table the most far-reaching arms control proposal in history, the General Secretary rejected it.

President Ronald Reagan to reporters,

following completion of presummit arms control discussions

in Reykjavik, Iceland, on October 12, 1986.

I proposed an urgent meeting here because we had something to propose. . .The Americans came to this meeting empty handed.

Secretary General Mikhail Gorbachev,

Describing the same meeting to reporters.

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

–    The tendency, known as fundamental attribution error, is 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

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

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

According to Arunachalam & Dilla

•       negotiators in structured communication condition negotiated higher profit outcomes and made fewer fixed pie errors.

•      Negotiators in the face-to-face condition negotiated higher profits.


Mood, Emotion, and Negotiation

•      The distinction between mood and emotion is based on three characteristics:

–   Specificity

–   Intensity

–   Duration

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 also create a positive attitude toward the other side

–    They promote persistence

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

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

Mood, Emotion, and Negotiation

•      Aspects of the negotiation process can lead to negative emotions

–    Negative emotions may result from a competitive mindset

–    Negative emotions may result from an impasse

•      Effects of positive and negative emotion

–    Positive emotions may generate negative outcomes

–    Negative feelings may elicit beneficial outcomes

•      Emotions can be used strategically as negotiation gambits