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Understanding the Psychology of Negotiation for Better Results

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Negotiation Psychology – How Understanding the Psychology of Negotiation Can Improve Your Negotiations

Whether you’re negotiating with terrorists for hostages or your two-year-old to try a new food, learning about the psychology at play can improve your results. Here are a few tips to get you started.

Pay attention to your negotiation counterpart’s body language. Faking anger may help you secure a few tactical concessions, but it damages trust in the long run.

1. Egocentrism

Egocentrism is the tendency to think only about one’s own perspective, goals and concerns. It can lead to tunnel vision in negotiations and an inability to consider the perspectives of others.

In a negotiation, this can mean seeing your partner’s interests as conflicting with your own. This is a common problem in commercial acquisition negotiations, personal divorce negotiations and other business transactions. It can also be a tactic used by people trying to gain advantage in the negotiation.

Researchers call this a fixed pie perception, because people who don’t have much experience making deals tend to assume that a negotiation is a zero-sum game in which their own interests directly conflict with those of their counterparts. More experienced negotiators, on the other hand, look for ways to expand the pie through cooperation rather than just snatching a piece for themselves. Egocentric thinking can be difficult to overcome, but a willingness to try and see things from another person’s perspective can help.

2. Motivated Illusions

While the study of negotiation psychology is rooted in cognitive thinking and analysis, negotiators and mediators must consider that human behavior and decision-making are far more irrational than has traditionally been thought. This is especially true in negotiations where egocentrism and motivated illusions can be particularly problematic.

The first step in addressing motivated illusions is to understand that they exist. This obligates negotiators and mediators to re-examine their own working assumptions, or heuristic biases, about how people think in difficult situations like a dispute.

Once a negotiator understands that they need to unsettle and challenge a person’s embedded focusing illusions, they can try a variety of strategies and techniques. These may involve a direct challenge of the illusion’s realistic premises, reasoned persuasion that appeals to self-interest, or more indirect techniques like using mirroring, copying body language and other cues that show you are on their wave-length. Once a negotiator has successfully addressed the person’s focusing illusion they can move on to transforming the context of the conversation and allowing alternative realities to enter.

3. Stereotype Threat

The fear of confirming negative stereotypes about one’s group can negatively affect performance in domains as diverse as negotiations (Kray et al. 2002), golf putting (Carr & Steele 2010) and memory tasks (Yeung & von Hippel 2014). In some situations, merely telling participants that a task is not diagnostic of the stereotyped ability can reduce these effects. In other cases, encouraging participants to reconstrue the test as not measuring their stereotyped ability or to misattribute their arousal may also help.

Stereotype threat is especially common for members of negatively stereotyped groups, such as women or minorities. For example, Claude Steele found that black students did worse on an intelligence test when they believed it was diagnostic of their intelligence, rather than being a standard measure of knowledge. Negotiation researchers have replicated the finding that women feel a greater need to prevent their own failure, and therefore begin negotiations with lower asking salaries, when they are primed with a stereotype-related task (Kray et al., 2001).

4. Anger

When negotiators express anger in negotiation, they send a signal of toughness that sometimes leads their counterparts to make larger concessions. Unfortunately, if they are not careful, they may also hurt their relationship with the counterpart and jeopardize their long-term negotiation success.

One way to avoid this is to enter the negotiation with a cooperative tone. But, as this study reveals, it is not enough to simply show your desire for cooperation, you must make your counterpart believe that you are genuine and sincere in your motives.

In this study, we found that the perceived authenticity of anger expression correlates with participants’ satisfaction with their negotiation partner and a reduction in their willingness to interact with the same counterpart in the future. We also found that the more non-verbal cues a channel conveyed, the greater its effect on these outcomes. Interestingly, though, when we controlled for the intensity of anger expression, the channel effects were no longer significant for satisfaction or concession.

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