Psychology of Negotiation: Principles and Basic Processes
Negotiation: communication between parties with perceived divergent interests to reach
agreements on the distribution of scarce resources, work procedures, the interpretation of
facts or some commonly held opinion or belief. About distributing and creating value.
Value can be negative or positive, certain or possible and immediately or delayed.
In negotiations parties depend on each other to acquire positive outcomes, avoid negative
outcomes or both. They have a cooperative incentive to work with the other party (they belief
that an agreement is potentially more beneficial than no agreement) and a competitive
incentive to increase personal gain. The interdependence determines power as the
possibility to control and influence.
When parties are groups, individuals in the group experience mixed-motive interdependence
within their ingroup and the outgroup.
Representatives can be accountable for outcomes of for the process of decision making.
When number of issues in a negotiation increase, it becomes less likely that parties disagree
on all issues, see all as equally important and have the same rank order of importance. If
preferences across issues are not diametrically opposed, there is integrative potential.
Parties to a negotiation do not have a full and accurate insight into the structure of the
negotiation. They lack information about the partners utility functions.
Reasons to doubt the accuracy and trustworthiness of information of the partner:
1. They can employ functionally irrelevant external stimuli from which unpredictable
responses can be generated by some internal and non-random process.
2. Information dilemma: giving honest information makes you vulnerable to exploitation.
Strategic repertoire principles: negotiator behaviour has five forms:
- Contending: focus on distribution of outcomes that are in one’s own advantage.
- Conceding/yielding: focus on outcomes in the counterpart’s advantage.
- Compromising: matching off other’s concessions, making conditional promises and
threats and actively searching for a middle ground.
- Problem solving/integration: full and open exchange of information about priorities
and preferences, making trade-offs between important and unimportant issues.
- Inaction
Underlying them are distributive (claiming value) and integrative (creating value) dimension
Complexification: making issues at the negotiation table more difficult, complex, fuzzy and
uncertain, to confuse and convince counterpart that it isn’t the right time to make decisions.
Mindless matching-mindful mismatching principle: whereas negotiators who do not engage
in deep, deliberate and strategic thinking match their counterpart’s behavioural tendency,
those who engage in such deep and strategic thinking will choose mismatching in early and
late phases of the negotiation and matching in the middle phase.
In general, individuals have a strong and seemingly automatic tendency to mimic and
reciprocate their counterpart’s behaviour: matching of confession size and/or frequency.
Mismatching: place high demands when the counterpart appears soft and low demands
when he appears tough.
Differentiation-before-integration principles: negotiators engage in distributive contending
early in the negotiation and in later phases switch to integrative problem solving.
Differentiation-before-integration pattern: after a series of competitive exchanges parties
realize that it leads nowhere but a costly impasse, a change in behaviour is needed and that
mutual problem solving is a viable alternative for safeguarding and promoting self-interest.
Heuristics to make sense of their complex environment:
1. Anchoring: rely on an arbitrarily chosen reference point.
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, 2. Availability: rely on information that is salient in memory.
3. Representativeness: making judgements based on obvious features of the stimulus.
E.g. stereotypes, reputation and fairness (equality, equity, need and opportunity).
Cognitive heuristics principle: sense making in fuzzy negotiation situations leads individuals
to rely on cognitive heuristics that provide simplified views of the negotiation.
Naïve realism principle: negotiators make sense of their fuzzy situations by assuming others
views and thinks like them. Reflected in:
- Fixed-pie assumptions: assume others want the same thing and value it the same.
- Optimistic overconfidence
- Strong tendency to engage in confirmatory information search.
Reactive devaluation: tendency to reduce the value of a concession or proposal received
just because the concession was made or the proposal was offered.
Mere ownership effect: objects associated with self are better liked than ones you don’t own.
Self-threat principle: individuals desire a positive self-view and opposition/conflict inherently
form a threat to self, so they develop ego defensive reactions against the counterpart.
Epistemic motivation: desire to develop and hold accurate, well-informed conclusions about
the world. Depends on process accountability, power differences, time pressure and noise.
Deep thinking principle: negotiators may be more or less motivated to develop a rich and
accurate understanding of their situation and therefore engage in more or less deep,
systematic and deliberate search for and processing of information.
Impression motivation: desire to make a good impression and to get along.
Proself motivation: competitive and purely individualistic goals.
Prosocial motivation: cooperative and purely altruistic goals.
Theory of cooperation and competition: proself negotiators develop distrust, hostile attitudes
and negative interpersonal perceptions. They use persuasive arguments, threats, positional
commitments, bluffs and coercive power. Prosocial negotiators develop trust, positive
attitudes and perceptions, engage in constructive exchange of information, listen and seek to
understand one another’s perspective. They are more likely to reach integrative agreement.
Dual-concern theory: other concern is related to the concept of social motive, with proself
negotiators having weak other concern and prosocial negotiators strong other concern. Self-
concern is related to resistance to yielding, intransigence about concession making.
Motivated information processing model: because negotiators often lack information about
the task and about their counterpart, a motivated search for and provision of information
provides new pieces of information on an almost continuous basis. Social motivation drives
the kind of information that negotiators seek, provide and consider. Social motives principle:
1. Negotiators have or adopt a prosocial or a proself motivation that
2. Drives for confirmatory sense-making processes and
3. Leads prosocials to engage in more problem solving when there is high resistance to
concession making and more yielding when there is low resistance.
Features of emotion: physiological reactions, action tendencies and subjective experience.
Moody negotiator principle: angry negotiators are likely to play tough and to make small
concession, sad negotiators are more evasive, happy negotiators easily make concessions.
Emotions-as-strategic-information principle: counterpart’s emotions provide information that
has strategic implication and is used as such provided that there is sufficient motivation.
Culture influences information processing in a number of ways:
- Determines the norms people have for managing disputes and resolving conflicts.
- Drives the cognitive representations of conflict
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