Halo Effects An individual generalizes about a variety of attributes based on the knowledge of one attribute of an individual
“He is smiling therefore he is also honest”
The Winners Curse
The tendency to settle quickly on an item and then subsequently feel discomfort about a win that comes too easily.
Overconfidence & The Law of Small Numbers Overconfidence
Communication in Negotiation
Distortions Senders and receivers
The more diverse their goals or the more antagonistic they are in their relationship, the greater the likelihood that Distortions and errors in communication will occur.
Selective Perception & Projection
Selective Perception
The perceiver singles out information that supports a prior belief but filters out contrary information The person who thinks “He is smiling therefore he is also honest” ignores behavior indicating the other party’s aggressiveness
Negotiators have a tendency to make systematic errors when they process information. These cognitive biases, impede negotiator performance; they include: – Irrational Escalation of Commitment – Mythical Fixed-Pie Beliefs – Anchoring and Adjustment – Winners Curse – Overconfidence – The Law of Small Numbers – Self-Serving Biases – Endowment Effect – Ignoring Other’s Cognitions
2. Transmitters and receptors
The choice of transmitter can affect outcomes. - Some messages may be better spoken, others written. - Poor eyesight, faulty hearing, etc. diminish the ability of a receiver to receive a message accurately.
4. Encoding
- The process by which messages are put into symbolic form - Senders are likely to encode messages in a form which receivers may not prefer
Projection
People ascribe to others the characteristics that they possess themselves “I am honest therefore she is honest also”
Cognitive Biases in Negotiation
Stereotyping An individual assigns attributes to another solely on the basis of the other’s membership in a particular social or demographic group
“Old people are conservative; this person is old and therefore is conservative”
Distortions in Communication
3. Messages
- The symbolic forms by which information is communicated - The more we use symbolic communication, the more likely the symbols may not accurately communicate the meaning we intend
Mythical Fixed-Pie Beliefs
Negotiators assume that all negotiations (not just some) involve a fixed pie.
Anchoring and Adjustment & Winners Curse Anchoring and Adjustment
Distortions in Communication
5. Channels
- The conduits by which messages are carried from one party to another. - Messages are subject to distortion from channel noise.
Distortions in Communication
7. Meanings
- The facts, ideas, feelings, reactions, or thoughts that exist within individuals and act as filters for interpreting the decoded messages . - Those filters can introduce distortions.
Irrational Escalation of Commitment & Mythical Fixed-Pie Beliefs
Irrational Escalation of Commitment
Negotiators maintain commitment to a course of action even when that commitment constitutes irrational behavior.
6. Decoding
- The process of translating messages from their symbolic form into a form that makes sense. - When people speak different languages, decoding involves higher degrees of error.
The Role of Perception
Perception: The process by which individuals connect to their environment -People interpret their environment in order to respond appropriately -The complexity of environments makes it impossible to process all of the information -As a result people develop shortcuts to process information -These shortcuts create perceptual errors
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.
Perception Distortion in Negotiation Four major perceptual errors:
1. Stereotyping 2. Halo effects 3. Selective perception 4. Projection
Stereotyping & Halo Effects
Endowment Effect
The tendency to overvalue something you own or believe you possess
Ignoring Other’s Cognitions
Ignoring Other’s 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.