A complete summary of all articles for the exam of nudge: influencing behavior (part of the minor: 'understanding and influencing decisions in business and society')
Six habits of merely effective negotiations (Sebenius 2001)
Goal: this article explores mistakes made by negotiators and compare good negotiating practices
with bad negotiating practices.
Solving the right problem when it comes to negotiation comes down to advancing your own
interests by persuading the other side to say yes to a proposal through shaping your counterpart’s
perceived decision so that the other side chooses in its own interest, what you want. Key is to
understand your own interests and no-deal options (such as BATNA).
There are however 6 common mistakes that negotiators make which keep them from solving the
right problem:
1. Neglecting the other side’s problem: it is important that in a negotiation you have an
understanding of your counterpart’s problem, so that you can address it, as a means to
solving your own. If you don’t have a proper understanding of the other party’s interests and
problems and thus only focus on your own problem a negotiation can fail.
2. Letting price bulldozer interests: negotiators who pay attention exclusively to price turn
potentially cooperative deals into adversarial ones. Price is an important factor, but rarely
the only one. The following four nonprice factors should also be focused on.
a. The relationship: less experienced negotiators often undervalue the importance of
developing working relationships with the counterpart in negotiations.
b. The social contract: they also tend to focus on the economic contract (cost sharing,
equity splits etc) at the expense of the social contract. The social contract governs
people’s expectations about the nature, extent, and duration of the venture, about
process, and about the way unforeseen events will be handled.
c. The process: they also often forget that the negotiation process can be as important
as its content. Thus a personal, respectful, straightforward and fair process is critical.
d. The interests of the full set of players : they also tend to forget about the interests of
the full set of players, even when there is a player who can veto/torpedo the whole
deal.
3. Letting positions drive out interests: in a negotiation three elements are at play: issues,
positions and interests. Issues are on the table for explicit agreement. Positions are one
party’s stands on the issues. Interests are the underlying concerns that would be affected by
the resolution. Solely focusing on positions might drive out the interests that parties have,
while there might actually be room to reconcile the interests of all parties.
4. Searching too hard for common ground: this can make negotiators neglect to try to
unbundle different elements which can, under differences of interest give each party what it
values the most at the least cost to the other.
5. Neglecting BATNAs: a Best Alternative To a Negotiated Agreement reflects the course of
action a party would take if the proposed deal were not possible. Both partied must do
better than their BATNAs to get to an agreement. Negotiators should assess their own
BATNAs and think carefully about the other side’s.
6. Failing to correct for skewed vision:
a. Self-serving role bias: people tend to unconsciously interpret information pertaining
to their own side in a strongly self-serving way. Thus negotiators need to be careful
of not getting too committed to their point of view, because it can be biased.
, b. Partisan perceptions: people have an unconscious mechanism which leads to their
own party being enhanced, and the exaggeration of perceptions of the other side’s
position. This could lead to self-fulfilling prophecies, which stand in the way of
reaching a constructive agreement. It is therefore useful to seek the views of outside
parties, not involved in the negotiation.
Support theory in negotiation: How unpacking aspirations and alternatives can improve negotiation
performance (Haselhuhn 2015)
Goal: this paper looks into the positive effect that unpacking positive alternatives has on negotiation
performance as opposed to looking at these outcomes as a single package (the likelihood of
obtaining any job). Unpacking alternatives means looking at for example the likelihood of getting a
job at firm 1, firm 2 etc. individually.
Support theory: this theory posits that the subjective probability of an outcome increases when the
outcome is described in greater detail.
BATNAs are used by negotiators to set their reservation points (point at which they are indifferent to
getting that deal or not/bottom line). Therefore negotiators with stronger BATNAs can set higher
reservation points. Thus BATNAs give a negotiator protection against a deal falling apart and they
give bargaining power in negotiations. Aspiration levels are the levels that the negotiator strives to
get in a negotiation. This paper looks into how individuals deal with uncertainty that is associated
with their alternatives and how this affects negotiation performance.
Unpacking certain outcomes has been proven to improve the subjective probability of that outcome
(e.g. subjectively more likely to die of “cancer, heart disease or some other natural cause” than just
“natural causes”). Unpacking increases the subjective probability by reminding individuals of
outcomes they might have otherwise forgotten and by increasing the salience of information that
may be considered. This is relevant for judging alternatives in negotiations, seeing as judging the
probability of getting an offer from any firm (packed alternative) might be judged as being less
probable than getting an offer from firm 1, firm 2 or any other firm (unpacked alternative).
This suggests that negotiators who unpack the positive things they could attain either in the current
negotiation (aspirations) or outside the current negotiation (alternatives) will believe that they are
more likely to achieve these outcomes compared with negotiators who do not unpack the same
potential event. This might result in more aggressive negotiation positions, which could positively
influence negotiation performance.
Study 1 found that people who unpacked their aspirations set more aggressive goals for their
negotiation, experiences a higher subjective likelihood of attaining their preferred outcome and had
higher negotiation performance. The mediation model below explains the relationship that was
found (with regard to aspiration level).
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