1. International Business Negotiation
McGraw-Hill/Irwin

2. Perception, Cognition, and Emotion
CHAPTER FIVE
Perception, Cognition, and Emotion

3. Perception, Cognition, and Emotion in Negotiation
The basic building blocks of all social encounters are:
Perception
Cognition
Framing
Cognitive biases
Emotion
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4. Perception Perception is:
The process by which individuals connect to their environment.
A complex physical and psychological process
A “sense-making” process
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5. 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 create perceptual errors
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6. Perceptual Distortion
Four major perceptual errors:
Stereotyping
Halo effects
Selective perception
Projection
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7. Stereotyping and Halo Effects
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
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8. Selective Perception and Projection
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
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9. 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
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10. Types of Frames Substantive Outcome Aspiration Process Identity
Characterization
Loss-Gain
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11. 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
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12. 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
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13. 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
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14. 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
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15. 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.
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16. 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
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17. Irrational Escalation of Commitment and Mythical Fixed-Pie Beliefs
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
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18. Anchoring and Adjustment and Issue Framing and Risk
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
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19. Availability of Information and the Winner’s Curse
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
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20. Overconfidence and the Law of Small Numbers
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
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21. Self-Serving Biases and Endowment Effect
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
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22. Ignoring Others’ Cognitions and Reactive Devaluation
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
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23. 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
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24. Mood, Emotion, and Negotiation
The distinction between mood and emotion is based on three characteristics:
Specificity
Intensity
Duration
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25. 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
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26. 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
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27. 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
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28. 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 emotions may generate negative outcomes
Negative feelings may elicit beneficial outcomes
Emotions can be used strategically as negotiation gambits
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