Perception, Cognition & Emotion
What are the perceptual Biases
Cognitive Biases
• What is perception
• Whatever happens between occurrence of a
stimulus and our behavioral reaction to it
• Many processes in between….
• Perceptual Biases
• Stereotypes
• Generalize from one individual  many individuals of a
– 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
• 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
– 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
– 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
• 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
• 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
• Induce compliance w/ ultimatum offers
– Adjust strategy based on emotion of other
• 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