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

2. 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

3. 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

4. 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

5. 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…

6. 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…

7. 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

8. How frames work… (note similarity to how interests operate)
More than one 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

9. 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

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

11. 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

12. 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

13. 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

14. 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

15. 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….

16. 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