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

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 • 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 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

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