Ch.5- Perception and Cognition
I. Framing
A frame is the subjective mechanism through which people evaluate and make sense out of situations, leading them to pursue or avoid subsequent actions
A. Types of Frames
1. Substantive - what the conflict is about. Parties taking a substantive frame have a particular disposition about the key issue or concern in the conflict.
2. Outcome—a party’s predisposition to achieving a specific result or outcome from the negotiation.
3. Aspiration—a predisposition toward satisfying a broader set of interests or needs in negotiation.
4. Process—how the parties will go about resolving their dispute.
5. Identity—how the parties define “who they are.”
6. Characterization—how the parties define the other parties.
7. Loss–gain—how the parties define the risk or reward associated with particular outcomes.
B. How frames work in negotiation
1. It is difficult to know what frame a party is using unless the party tells you
2. Frames of those who hear or interpret communication may create biases of their own.
3. Linguistic analyses of negotiation transcripts provides insight into how parties define a negotiation, and how frames are used in the process:
a. Negotiators can use more than one frame.
b. Mismatches in frames between parties are sources of conflict.
c. Particular types of frames may lead to particular types of agreements
d. Specific frames may be likely to be used with certain types of issues
e. Parties are likely to assume a particular frame because of various factors.
C. Another approach to frames: Interest, rights, and power
1. Ury, Brett, and Goldberg (1988) proposed an approach to framing disputes that view parties in conflict as using one of three frames:
a. Interests - People are often concerned about what they need, desire, or want. People talk about their “positions,” but often what is at stake is their underlying interests.
b. Rights - People may also be concerned about who is “right”—that is, who has legitimacy, who is correct, or what is fair.
c. Power - Negotiations resolved by power are sometimes based on who is physically stronger or is able to coerce the other, but more often, it is about imposing other types of costs— economic pressures, expertise, legitimate authority, and so on.
2. The different frames are likely to lead to very different discussions between parties.
3. The way a party approaches the problem will likely influence how the other party responds.
D. The frame of an issue changes as the negotiation evolves
1. The issue development approach focuses on the patterns of change (transformation) that occur in the issues as parties communicate with each other.
a. Several factors shape a frame, the negotiation context clearly affects the way both sides define the issue and conversations that the parties have with each other about the issues in the bargaining mix.
b. At least four factors can affect how the conversation is shaped:
a) Negotiators tend to argue for stock issues, or concerns that are raised every time the parties negotiate.
b) Each party attempts to make the best possible case for his or her preferred position or perspective.
c) In a more “macro” sense, frames may also define major shifts and transitions in the overall negotiation.
d) Multiple agenda items operate to shape the issue development frames.
II. Cognitive Biases in Negotiation
A. Irrational escalation of commitment
1. An “escalation of commitment” is the tendency for an individual to make decisions that stick with a failing course of action
2. Escalation of commitment is due in part to biases in individual perception and judgment.
B. Mythical fixed-pie beliefs
1. Many negotiators assume that all negotiations involve a fixed pie
2. Those who believe in the mythical fixed pie assume there is no possibility for integrative settlements and mutually beneficial trade-offs, and they suppress efforts to search for them.
C. Anchoring and adjustment
1. Anchoring and adjustment are related to the effect of the standard (or anchor) against which subsequent adjustments are made during negotiation.
2. Once the anchor is defined, parties tend to treat it as a real, valid benchmark by which to adjust other judgments, such as the size of one side’s opening offer.
D. Issue framing and risk
1. A frame is a perspective or point of view that people use when they gather information and solve problems.
2. The way an issue is framed influences how negotiators perceive risk and behave in relation to it.
3. The tendency to either seek or avoid risk may be based on the reference point against which offers and concessions are judged.
4. Two things to keep in mind about the effect of frames on risk in negotiation are
a. negotiators are not usually indifferent to risk, but
b. they should not necessarily trust their intuitions regarding it.
E. Availability of information
1. The availability bias operates when information that is presented in vivid, colorful, or attention-getting ways becomes easy to recall, and thus also becomes central and critical in evaluating events and options.
2. The availability of information also affects negotiation through the use of established search patterns.
F. The winner’s curse
1. The winner’s curse refers to the tendency of negotiators, particularly in an auction setting, to settle quickly on an item and then subsequently feel discomfort about a negotiation win that comes too easily.
2. Recent research suggests that the winner’s curse stems, in part, from counterfactual thought processes that involve entertaining the possibility of “what might have been” if the offer hadn’t been accepted.
G. Overconfidence
1. Overconfidence is the tendency of negotiators to believe that their ability to be correct or accurate is greater than is actually true.
2. Overconfidence has a double-edged effect:
a. It can solidify the degree to which negotiators support positions or options that are incorrect or inappropriate, and
b. It can lead negotiators to discount the worth or validity of the judgments of others, in effect shutting down other parties as sources of information, interests, and options necessary for a successful integrative negotiation.
H. The law of small numbers
1. The law of small numbers refers to the tendency of people to draw conclusions from small sample sizes.
2. This tendency leads to a self-fulfilling prophecy - people who expect to be treated in a distributive manner will:
a. Be more likely to perceive the other party’s behaviors as distributive
b. Treat the other party in a more distributive manner.
I. Self-serving biases
1. People often explain another person’s behavior by making attributions, either to the person or the situation.
2. Fundamental attribution error - the tendency is to overestimate the causal role of personal or internal factors and underestimate the causal role of situational or external factors.
3. Self-serving biases effect the negotiation process in a number of ways, for example:
a. Perception of greater use of constructive tactics than the other party
b. Less accurate in estimating the other’s preferred outcomes
c. Influences perception of fairness in a negotiation context.
J. Endowment effect
1. The endowment effect is the tendency to overvalue something you own or believe you possess.
2. The endowment effect can lead to inflated estimations of value that interfere with reaching a good deal.
K. Ignoring others’ cognitions
1. Failure to consider others’ cognitions allows negotiators to simplify their thinking about otherwise complex processes; this usually leads to a more distributive strategy and causes a failure to recognize the contingent nature of both sides’ behaviors and responses.
L. Reactive devaluation
1. Reactive devaluation is the process of devaluing the other party’s concessions simply because the other party made them.
2. Reactive devaluation leads negotiators to:
a. Minimize the magnitude of a concession made by a disliked other
b. Reduce their willingness to respond with a concession of equal size, or
c. Seek even more from the other party once a concession has been made
M. Managing misperceptions and cognitive biases in negotiation
1. Misperceptions and cognitive biases typically arise out of conscious awareness as negotiators gather and process information.
2. How best to manage the negative consequences of misperception
a. Be aware that they occur
b. Tell people about a perceptual or cognitive bias - discuss them in a structured manner within the team and with the party’s counterparts.
N. Reframing
1. Reframing might involve any of a number of approaches.
a. Rather than perceiving a particular outcome as a loss, the negotiator might reframe it as an opportunity to gain.
b. Trying to perceive or understand the situation in a different way or from a different perspective
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