CHAPTER FIVE
Perception, Cognition
and Communication
5-2
Perception and Negotiation
 The
role of perception
 Perception distortion in negotiation
 Framing
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5-3
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
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5-4
Perception Distortion in
Negotiation
 Four
major perceptual errors:
– Stereotyping
– Halo effects
– Selective perception
– Projection
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5-5
Stereotyping & Halo Effects

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”

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”
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5-6
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

Projection: People ascribe to others the
characteristics that they possess themselves
– “I am honest therefore she is honest also”
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5-7
Framing

Frames:
– The subjective mechanism through which
people evaluate and make sense out of
situations
– Lead people to pursue or avoid subsequent
actions
 About
focusing, shaping and organizing the world
around us
 Making sense of complex realities
 Defining realities in ways that are meaningful to
us
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5-8
Cognitive Biases in Negotiation

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
McGraw-Hill/Irwin
– Anchoring and
Adjustment
– Framing
– Availability of
Information
– Winners Curse
– Overconfidence
– The Law of Small
Numbers
– Self-Serving Biases
– Endowment Effect
– Ignoring Other’s
Cognitions
– Reactive Devaluation
© 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.
5-9
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

Mythical Fixed-Pie Beliefs
– Negotiators assume that all negotiations (not
just some) involve a fixed pie
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5-10
Anchoring and Adjustment
& Framing

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

Framing
– Frames can lead people to seek, avoid, or be
neutral about risk in decision making and
negotiation
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5-11
Availability of Information
& The Winners 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 Winners 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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5-12
Overconfidence &
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
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5-13
Self-Serving Biases
& 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 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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5-14
Ignoring Other’s Cognitions
& Reactive Devaluation

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

Reactive Devaluation
– The process of devaluing the other party’s
concessions simply because the other party made
them
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5-15
Managing Misperceptions and
Cognitive Biases in Negotiation
The best advice is:
 Be aware of the negative aspects of these
effects
 Discuss them in a structured manner
within their team and with their
counterparts
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5-16
What is Communicated During
Negotiation?




Offers and counteroffers
Information about alternatives
Information about outcomes
Social accounts
– Explanations of mitigating circumstances
– Explanations of exonerating circumstances
– Reframing explanations

Communication about the negotiation
process
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5-17
How People Communicate in
Negotiation

Use of Language
– Logical level (proposals, offers)
– Pragmatic level (semantics, syntax, style)

Selection of a Communication Channel
– Social presence is key variation that distinguishes
one channel from another
– Social presence is the ability of a channel to carry
and convey subtle social cues from sender to
receiver
– It goes beyond the literal “text” of the message
itself
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5-18
How to Improve Communication
in Negotiation

The Use of Questions
– Manageable
 Cause
attention or prepare the other person’s
thinking for:
– Further questions
– Getting information
– Generating thoughts
– Unmanageable
 Cause
difficulty, give information and bring the
discussion to a false conclusion
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5-19
How to Improve Communication
in Negotiation (cont.)

Listening: Three major forms
– Passive listening
 No
feedback to the sender
– Acknowledgment:
 Receivers
nod their heads, maintain eye contact,
or interject responses
– Active listening:
 Receivers
restate or paraphrase the sender’s
message in their own language
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5-20
How to Improve Communication
in Negotiation (cont.)

Using active listening encourages people
to speak more fully about their:
–
–
–
–
Feelings
Priorities
Frames of reference
Positions
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5-21
How to Improve Communication
in Negotiation (cont.)

Role Reversal
– Allows negotiators to understand the other
party’s positions by actively arguing these
positions
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5-22
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 promote persistence
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5-23
Mood, Emotion and Negotiation

Positive Emotions Generally Have
Positive Consequences for Negotiations
(cont.)
– They result from fair procedures during
negotiation
 Negotiators
in a positive mood may be less likely
to examine closely the arguments put forward by
the other party
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5-24
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 lead parties to escalate the conflict
– They may lead parties to use retaliatory
behavior and obtain poorer outcomes
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5-25
Mood, Emotion and Negotiation

Negative Emotions Generally Have Negative
Consequences for Negotiations (cont.)
– They may result from impasse
 Anger
can serve as a danger signal that motivates
both parties to confront the problem directly and
search for a resolution

Emotions Can Be Used Strategically As
Negotiation Tactics
McGraw-Hill/Irwin
© 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.