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CHAPTER FIVE
Perception, Cognition,
and Emotion

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Perception, Cognition, and

Emotion in Negotiation
The basic building blocks of all social
encounters are:
Perception
Cognition
Framing
Cognitive biases

Emotion
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Perception
Perception is:
The process by which individuals connect to
their environment.
A complex physical and psychological process

A sense-making process
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The Role of Perception

The process of ascribing meaning to messages and events is strongly influenced

by the perceivers current state of mind, role, and comprehension of earlier
communications
People interpret their environment in order to respond appropriately
The complexity of environments makes it impossible to process all of the
information
People develop shortcuts to process information and these shortcuts create
perceptual errors

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Perceptual Distortion
Four major perceptual errors:
Stereotyping
Halo effects
Selective perception
Projection

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Stereotyping and Halo Effects

Stereotyping:
Is a very common distortion
Occurs when an individual assigns attributes to another
solely on the basis of the others membership in a particular
social or demographic category

Halo effects:
Are similar to stereotypes
Occur when an individual generalizes about a variety of
attributes based on the knowledge of one attribute of an
individual
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Selective Perception
and Projection
Selective perception:
Perpetuates stereotypes or halo effects
The perceiver singles out information that supports a prior
belief but filters out contrary information

Projection:
Arises out of a need to protect ones own self-concept
People assign to others the characteristics or feelings that
they possess themselves
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Framing
Frames:
Represent the subjective mechanism through which people
evaluate and make sense out of situations
Lead people to pursue or avoid subsequent actions
Focus, shape and organize the world around us
Make sense of complex realities
Define a person, event or process
Impart meaning and significance

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Types of Frames

Substantive
Outcome
Aspiration
Process
Identity
Characterization
Loss-Gain

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How Frames Work in Negotiation

Negotiators can use more than one frame
Mismatches in frames between parties are sources of
conflict
Particular types of frames may lead to particular types
of arguments
Specific frames may be likely to be used with certain
types of issues
Parties are likely to assume a particular frame
because of various factors
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Interests, Rights, and Power

Parties in conflict use one of three frames:
Interests: people talk about their positions but often
what is at stake is their underlying interests
Rights: people may be concerned about who is
right that is, who has legitimacy, who is correct,
and what is fair
Power: people may wish to resolve a conflict on the
basis of who is stronger
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The Frame of an Issue Changes as

the Negotiation Evolves
Negotiators tend to argue for stock issues or concerns
that are raised every time the parties negotiate
Each party attempts to make the best possible case for
his or her preferred position or perspective
Frames may define major shifts and transitions in a
complex overall negotiation
Multiple agenda items operate to shape issue
development
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Some Advice about Problem

Framing for Negotiators
Frames shape what the parties define as the key issues
and how they talk about them
Both parties have frames
Frames are controllable, at least to some degree
Conversations change and transform frames in ways
negotiators may not be able to predict but may be
able to control
Certain frames are more likely than others to lead to
certain types of processes and outcomes
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Cognitive Biases in Negotiation

Negotiators have a tendency to make
systematic errors when they process
information. These errors, collectively labeled
cognitive biases, tend to impede negotiator
performance.

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Cognitive Biases

Irrational escalation of
commitment
Mythical fixed-pie
beliefs
Anchoring and
adjustment
Issue framing and risk
Availability of
information

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The winners curse

Overconfidence
The law of small
numbers
Self-serving biases
Endowment effect
Ignoring others
cognitions
Reactive devaluation

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Irrational Escalation of Commitment

and Mythical Fixed-Pie Beliefs
Irrational escalation of commitment
Negotiators maintain commitment to a course of action
even when that commitment constitutes irrational behavior

Mythical fixed-pie beliefs

Negotiators assume that all negotiations (not just some)
involve a fixed pie

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Anchoring and Adjustment

and Issue Framing and Risk
Anchoring and adjustment
The effect of the standard (anchor) against which
subsequent adjustments (gains or losses) are measured
The anchor might be based on faulty or incomplete
information, thus be misleading

Issue framing and risk

Frames can lead people to seek, avoid, or be neutral about
risk in decision making and negotiation

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Availability of Information
and the Winners Curse
Availability of information
Operates when information that is presented in vivid or
attention-getting ways becomes easy to recall.
Becomes central and critical in evaluating events and
options

The winners curse

The tendency to settle quickly on an item and then
subsequently feel discomfort about a win that comes too
easily
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Overconfidence and
The Law of Small Numbers
Overconfidence
The tendency of negotiators to believe that their ability to
be correct or accurate is greater than is actually true

The law of small numbers

The tendency of people to draw conclusions from small
sample sizes
The smaller sample, the greater the possibility that past
lessons will be erroneously used to infer what will happen
in the future

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Confidence or Overconfidence?
We came to Iceland to advance the cause of peace. . .and
though we put on the table the most far-reaching arms
control proposal in history, the General Secretary rejected
it.
President Ronald Reagan to reporters,
following completion of presummit arms control discussions
in Reykjavik, Iceland, on October 12, 1986.

I proposed an urgent meeting here because we had

something to propose. . .The Americans came to this
meeting empty handed.
Secretary General Mikhail Gorbachev,
Describing the same meeting to reporters.

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Self-Serving Biases
and Endowment Effect
Self-serving biases

People often explain another persons behavior by making

attributions, either to the person or to the situation
The tendency, known as fundamental attribution error, is
to:
Overestimate the role of personal or internal factors
Underestimate the role of situational or external factors

Endowment effect

The tendency to overvalue something you own or believe

you possess

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Ignoring Others Cognitions

and Reactive Devaluation
Ignoring others cognitions
Negotiators dont bother to ask about the other partys
perceptions and thoughts
This leaves them to work with incomplete information, and
thus produces faulty results

Reactive devaluation
The process of devaluing the other partys concessions
simply because the other party made them
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Managing Misperceptions and

Cognitive Biases in Negotiation
The best advice that negotiators can follow is:
Be aware of the negative aspects of these biases
Discuss them in a structured manner within the team
and with counterparts

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Mood, Emotion, and Negotiation

The distinction between mood and emotion is
based on three characteristics:
Specificity
Intensity
Duration

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Mood, Emotion, and Negotiation

Negotiations create both positive and negative
emotions
Positive emotions generally have positive
consequences for negotiations
They are more likely to lead the parties toward more
integrative processes
They also create a positive attitude toward the other side
They promote persistence

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Mood, Emotion, and Negotiation

Aspects of the negotiation process can lead to
positive emotions
Positive feelings result from fair procedures during
negotiation
Positive feelings result from favorable social comparison

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Mood, Emotion, and Negotiation

Negative emotions generally have negative
consequences for negotiations
They may lead parties to define the situation as competitive
or distributive
They may undermine a negotiators ability to analyze the
situation accurately, which adversely affects individual
outcomes
They may lead parties to escalate the conflict
They may lead parties to retaliate and may thwart
integrative outcomes
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Mood, Emotion, and Negotiation

Aspects of the negotiation process can lead to
negative emotions
Negative emotions may result from a competitive mindset
Negative emotions may result from an impasse

Effects of positive and negative emotion

Positive emotions may generate negative outcomes
Negative feelings may elicit beneficial outcomes

Emotions can be used strategically as negotiation

gambits
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2006 The McGraw-Hill