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Are you a victim of decision bias in negotiation?

By Nicole Spitaleri, Consultant-Coach

You've probably already heard of cognitive biases, the mental patterns that have a major impact on our lives, our decisions and our reactions.

How are our choices, which we think are free, conditioned and biased? How can the functioning of the two hemispheres of our brain be unbalanced, unknowingly affecting the way we negotiate?

Let's take a look at some of the biases that filter our view of the world and have a direct impact on our negotiations. By becoming aware of them, you can avoid self-sabotage.

 

6 significant biases in negotiation situations

 

1. Status quo bias is ingrained in us from birth. It states that human beings prefer stability to change. While this may be true at times, this mental schema is a defence mechanism that hinders and blocks us in tense negotiations that seem to have no way out. Yet it is at these times that we need agility and creativity to build new options and think "out of the box". It's an effort we have to make ourselves to accept that, in negotiation, we sometimes have to put aside our preconceived ideas and positions that seem obvious to us. On the contrary, this in no way puts either the relationship or the end result at risk. It is precisely the status quo bias that causes us to rush to propose or accept a compromise and, worse still, that sometimes causes us to sell out our interests.

2. Anchoring, is the first value, offer, proposal or price given in an exchange. It forces the other party to take a position based on this information, whether it is justified or not. The anchor will serve as a reference in a negotiation. So giving the value/price first will influence the level of the other person's response. A study has shown that an anchor, even if unrealistic, will ultimately help to raise the bar on a given object. Of course, it's better to remain credible and, above all, to anchor confidence when negotiating, bearing in mind that anchoring creates a mental reference point.

3. Excess bias Confidence arises when we believe that we have more abilities than others and that we can achieve certain results in less time than them. Sometimes, however, we run the risk of overestimating the resources at our disposal. On the contrary, it would be interesting to take an interest in our negotiating partners in order to get to know them better and discover their characteristics so that together we can co-create solutions that suit both parties. Taking an interest in others by asking open-ended questions helps to create a bond between negotiating partners and ensures that everyone puts their resources to good use. This attitude is clearly preferable to that of approaching the negotiation by imposing solutions that we feel are best for the situation.

4. The affect heuristic is about how we use the information available to us to make assessments or decisions. Our perception of reality is influenced by our emotions, which are created on the basis of mental images to which we associate positive or negative feelings. Very often, in the decision-making process, our emotional neurons will collaborate with our emotional hormones (neurotransmitters such as adrenaline or dopamine) to make choices that we think are rational. This is particularly true when we are buying or negotiating. Remember: at the negotiating table, we tend to underestimate the risks associated with what we value and overestimate the risks and benefits associated with what we have a negative image of. This awareness will help us to make choices without allowing ourselves to be trapped by our emotions.

5. Confirmation bias is a kind of mental shortcut that many supporters of political parties and ideologues use. We have such a tendency to attach great importance only to information that supports our beliefs that we can overlook information that is useful for understanding the other party and responding to their claims or needs. In negotiation, this is the source of many misunderstandings arising from a reduced perception of the situation. To avoid this consequence, we recommend encouraging the other person to express their own perception before giving our own.

6. Compliance biasis strongly linked to groupthink bias. This is our natural impulse to fit into the mould and meet expectations. In childhood, the aim is to be loved by our parents, and later, to be accepted by our peers at school and to fit in socially. However, in certain complex negotiations, doing precisely what is not in line with expectations and banking on the surprise effect can be absolutely unblocking.

 

In conclusion

Being aware of decision-making biases enables negotiators and decision-makers to avoid certain pitfalls and improve their results and agreements. However, it should be remembered that when it comes to negotiation, the challenge is twofold: how can we negotiate with our own biases and those of others? It is up to us to make our negotiating partners aware of these limiting patterns and help them to manage them. The aim is to move forward together in a rational and constructive way for both parties.

To conclude, while there are many biases that hinder our decision-making and run counter to our direct and indirect interests, being aware of them is already the first step in circumventing them. This will undoubtedly prevent us from becoming trapped in thought structures that limit our scope for action, and open us up to exploring the field of possibilities.[1].

 

[1] There are a number of books on the subject.

Negotiating rationnaly by Max Bazerman, an expert in behavioural psychology. He provides concrete examples of negotiations where some of these biases come into play.

See also

Social negotiations: beware of the three false leads!

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