Perception, Cognition & Emotion What are the perceptual Biases Frames Cognitive Biases Emotions

What is perception Whatever happens between occurrence of a stimulus and our behavioral reaction to it Many processes in between…. Stimulus Attention Recognition Translation Behavior Perception

Perceptual Biases Stereotypes Halo Generalize from one individual  many individuals of a group Due to time pressure, cognitive stress, mood Halo Generalize from one attribute many attributes Due to lack of experience with person, celebrity status, moral qualities of attributes

Perceptual Biases (cont’d) Selective perception (aka confirmation bias) Reliance on evidence that is consistent with beliefs than over that is inconsistent Perpetuates stereotypes, halos etc Projection (aka false consensus effect) Assume other is similar to you in interpreting & responding to situation

Framing Individual interpretations of negotiation situation E.g., objective of negotiation, expectations for outcomes, information used to argue case, procedures, criteria for evaluating outcome Some types of frames are similar to concepts of strategy, goals, interests, rights, power…..! E.g., substantive, outcome, aspiration, process…

Types of frames (similar to other concepts) Substantive vs. Process to have a particular way of thinking of what the conflict is about vs. how to resolve the conflict Outcome vs Aspiration Achieve a certain outcome vs. satisfy needs or interests Rights Correct, legitimate, fair Power coercion, economic pressure, legitimate authority, expertise Give an example…

Types of frames (cont’d) Identity Definition of oneself E.g., group membership, place of birth etc. Characterization Definition of the other party Prior experience w/other party, reputation, image projected early in negotiation Loss-gain Risk vs. reward E.g., Loss of $$ vs. gain in value of item

How frames work… (note similarity to how interests operate) More than one frame @ one time Mismatches of frame conflict frames differences in negotiation Type of Issues  Frames Frames agreements Differences in values, personalities, background etc differences in frames

How frames operate within the course of a negotiation What gets discussed: stock issues Build a strong case for own position, refute other party’s argument Diagnosis/Formula/Detail Discuss multiple secondary items transform negotiation (develop issues) Reframing: attack arguments, making case, management of multiple issues

Cognitive Biases Escalation of commitment Fixed-pie beliefs Anchoring & Adjustment Loss vs. Gain frame Availability (vividness) Winner’s curse (counterfactuals)

Cognitive Biases Overconfidence Law of Small numbers (extrapolating from experience) E.g., “Hot hand” Self-serving Biases: fae, a-o, false consensus (b23) Endowment Effect Ignoring other party’s cognitions Reactive devaluation minimize concessions made by disliked other

Managing misperceptions & cognitive biases Awareness is not sufficient, E.g., discussing how to set offers etc. does not reduce anchoring and adjustment effects Reframe when frames are mismatched Define & evaluate problem, discuss in structured way Arunachalam & Dilla 1995

Emotions in Negotiation Negotiation processes & outcomes  Positive & Negative Emotions Positive Emotions Positive Outcomes Integrative processes Positive attitude toward other side Promote persistence Negotiation processes Positive Emotions Fair procedures Favorable social comparisons Negative Emotions Negative Outcomes Definition of situation as competitive/distributive Escalation of conflict Retaliation

Negotiation processes & outcomes  Positive & Negative Emotions (cont’d) Negative Emotions Negative Outcomes Definition of situation as competitive/distributive Escalation of conflict Retaliation Negotiation Processes Negotiation Emotions Competitive mind-set From Impasse Beginning of a negotiation

Positive emotions negative outcomes Scrutiny of counter arguments is less Susceptibility to deceptive tactics Positive emotions  positive expectations. If those are are not met via integrative agreements, other party is treated more harshly Negative emotions positive outcomes Information value – motivation to resolve situation or leave it Words used to trigger negative emotion to convey seriousness of purpose .g., anger is a double edged sword….

Using emotion as a negotiation tactic Positive emotional tone agreements incorporating future business relationship Induce compliance w/ ultimatum offers Adjust strategy based on emotion of other party Angerlower demands Smaller concessions when anger threatens outcomes of negotiation Worry/disappointment  lower demands Guilt/regret  higher demands EI  Emotional tuning of messages to other party’s emotions