Perception, Cognition, and Emotion

Perception, Cognition, and Emotion 

1.	Understand the important role played by perceptions, cognitions, and emotions in negotiation.
2.	Explore how perceptions can become distorted and lead to biases in negotiation and judgment.
3.	Consider the ways that cognitions (information processing) in negotiation can also be affected by biases and framing processes, and how emotions and mood can shape a negotiation.
4.	Gain advice on how to manage perception, cognition, and emotions in negotiation situations.

Overview

We begin the chapter by examining how psychological perception is related to the process of negotiation, with particular attention to forms of perceptual distortion that can cause problems of understanding and meaning making for negotiators. We then look at how negotiators use information to make decisions about tactics and strategy—the process of cognition. Our discussion here pursues two angles. First, we focus on framing.  Second, we discuss the various kinds of systematic errors, or cognitive biases, in information processing that negotiators are prone to make and that may compromise negotiator performance. This section will also consider how negotiators can manage misperceptions and cognitive biases in order to maximize strategic advantage and minimize their adverse effects.

Social encounters are, however, more than just occasions for perception and cognition. We experience and express emotion when we interact with others and negotiating is certainly no exception. In the final major section of this chapter, we discuss the role of moods and emotions in negotiation—both as causes of behavior and as consequences of negotiated outcomes.

Learning Objectives

1.      Perception – the process by which individuals connect to their environment.

2.      Framing

3.      Cognitive biases in negotiation

4.      Mood, emotion, and negotiation

I.       Perception

A.    Perception defined

1.      Perception is the process by which individuals connect to their environment, by ascribing meaning to messages and events.  This process is strongly influenced by the perceiver’s current state of mind, role and comprehension of earlier communications.

2.      Perception is a “sense-making” process where people interpret their environment so they can respond appropriately. 

B.     Perceptual distortion

1.      A perceiver’s own needs, desires, motivation and personal experiences may create a predisposition about the other party.  This can lead to biases and errors in perception and subsequent communication.

a.       Stereotyping – occurs when one individual assigns attributes to another solely on the basis of the other’s membership in a particular social or demographic category.

(1)   Highly resistant to change

(2)   Commonly used as a resort during conflicts involving values, ideologies, and direct competition for resources

b.      Halo effects occur when people generalize about a variety of attributes based on the knowledge of one attribute of an individual.

(1)   Research shows halo effects are most likely to occur in perception

(i)     Where there is very little experience with a person along some dimension

(ii)   When the person is well known

(iii) When the qualities have strong moral implications

c.       Selective perception occurs when the perceiver singles out certain information that supports or reinforces a prior belief and filters out information that does not confirm that belief.

d.      Projection occurs when people assign to others the characteristics or feelings that they possess themselves. Projection usually arises out of a need to protect one’s own self-concept— to see oneself as consistent and good.

II.    Framing

A frame is the subjective mechanism through which people evaluate and make sense out of situations, leading them to pursue or avoid subsequent actions

A.    Types of Frames

1.      Substantive—what the conflict is about. Parties taking a substantive frame have a particular disposition about the key issue or concern in the conflict.

2.      Outcome—a party’s predisposition to achieving a specific result or outcome from the negotiation.

3.      Aspiration—a predisposition toward satisfying a broader set of interests or needs in negotiation.

4.      Process—how the parties will go about resolving their dispute.

5.      Identity—how the parties define “who they are.”

6.      Characterization—how the parties define the other parties.

7.      Loss–gain—how the parties define the risk or reward associated with particular outcomes.

B.     How frames work in negotiation

1.      It is difficult to know what frame a party is using unless the party tells you.

2.      Frames of those who hear or interpret communication may create biases of their own.

3.      Linguistic analyses of negotiation transcripts provides insight into how parties define a negotiation, and how frames are used in the process:

a.       Negotiators can use more than one frame.

b.      Mismatches in frames between parties are sources of conflict.

c.       Parties negotiate differently depending on the frame.

d.      Specific frames may be likely to be used with certain types of issues.

e.       Particular types of frames may lead to particular types of agreements.

f.       Parties are likely to assume a particular frame because of various factors.

C.     Another approach to frames: Interests, rights, and power

1.      Ury, Brett, and Goldberg (1988) proposed an approach to framing disputes that view parties in conflict as using one of three frames:

a.       Interests – People are often concerned about what they need, desire, or want. People talk about their “positions,” but often what is at stake is their underlying interests.

b.      Rights – People may also be concerned about who is “right”—that is, who has legitimacy, who is correct, or what is fair.

c.       Power – Negotiations resolved by power are sometimes based on who is physically stronger or is able to coerce the other, but more often, it is about imposing other types of costs – economic pressures, expertise, legitimate authority, and so on.

2.      The different frames are likely to lead to very different discussions between parties.

3.      The way a party approaches the problem will likely influence how the other party responds.

D.    The frame of an issue changes as the negotiation evolves

1.      The issue development approach focuses on the patterns of change (transformation) that occur in the issues as parties communicate with each other.

a.       Several factors shape a frame, the negotiation context clearly affects the way both sides define the issue and conversations that the parties have with each other about the issues in the bargaining mix.

b.      At least four factors can affect how the conversation is shaped:

(1)   Negotiators tend to argue for stock issues, or concerns that are raised every time the parties negotiate.

(2)   Each party attempts to make the best possible case for his or her preferred position or perspective.

(3)   In a more “macro” sense, frames may also define major shifts and transitions in the overall negotiation.

(4)   Multiple agenda items operate to shape the issue development frames.

III.  Cognitive Biases in Negotiation

A.    Irrational escalation of commitment

1.      An “escalation of commitment” is the tendency for an individual to make decisions that stick with a failing course of action.

2.      Escalation of commitment is due in part to biases in individual perception and judgment.

 

B.     Mythical fixed-pie beliefs

1.      Many negotiators assume that all negotiations involve a fixed pie.

2.      Those who believe in the mythical fixed pie assume there is no possibility for integrative settlements and mutually beneficial trade-offs, and they suppress efforts to search for them.

C.     Anchoring and adjustment

1.      Anchoring and adjustment are related to the effect of the standard (or anchor) against which subsequent adjustments are made during negotiation.

2.      Once the anchor is defined, parties tend to treat it as a real, valid benchmark by which to adjust other judgments, such as the size of one side’s opening offer.

D.    Issue framing and risk

1.      A frame is a perspective or point of view that people use when they gather information and solve problems.

2.      The way an issue is framed influences how negotiators perceive risk and behave in relation to it.

E.     Availability of information

1.      The availability bias operates when information that is presented in vivid, colorful, or attention-getting ways becomes easy to recall, and thus also becomes central and critical in evaluating events and options.

2.      The availability of information also affects negotiation through the use of established search patterns.

F.      The winner’s curse

1.      The winner’s curse refers to the tendency of negotiators, particularly in an auction setting, to settle quickly on an item and then subsequently feel discomfort about a negotiation win that comes too easily.

G.    Overconfidence

1.      Overconfidence is the tendency of negotiators to believe that their ability to be correct or accurate is greater than is actually true.

2.      Overconfidence has a double-edged effect:

a.       It can solidify the degree to which negotiators support positions or options that are incorrect or inappropriate, and

b.      It can lead negotiators to discount the worth or validity of the judgments of others, in effect shutting down other parties as sources of information, interests, and options necessary for a successful integrative negotiation.

H.    The law of small numbers

1.      The law of small numbers refers to the tendency of people to draw conclusions from small sample sizes.

2.      This tendency leads to a self-fulfilling prophecy – people who expect to be treated in a distributive manner will:

a.       Be more likely to perceive the other party’s behaviors as distributive and

b.      Treat the other party in a more distributive manner.

I.       Self-serving biases

1.      People often explain another person’s behavior by making attributions, either to the person or the situation. 

2.      In explaining another person’s behavior, the tendency is to overestimate the causal role of personal or internal factors and underestimate the causal role of situational or external factors. 

3.      Self-serving biases effect the negotiation process in a number of ways, for example:

a.       Perception of greater use of constructive tactics than the other party

J.       Endowment effect

1.      The endowment effect is the tendency to overvalue something you own or believe you possess.

2.      The endowment effect can lead to inflated estimations of value that interfere with reaching a good deal.

K.    Ignoring others’ cognitions

1.      Failure to consider others’ cognitions allows negotiators to simplify their thinking about otherwise complex processes; this usually leads to a more distributive strategy and causes a failure to recognize the contingent nature of both sides’ behaviors and responses.

L.     Reactive devaluation

1.      Reactive devaluation is the process of devaluing the other party’s concessions simply because the other party made them.

2.      Reactive devaluation leads negotiators to:

a.       Minimize the magnitude of a concession made by a disliked other

b.      Reduce their willingness to respond with a concession of equal size, or

c.       Seek even more from the other party once a concession has been made

M.   Managing misperceptions and cognitive biases in negotiation

1.      Misperceptions and cognitive biases typically arise out of conscious awareness as negotiators gather and process information.

2.      How best to manage the negative consequences of misperception

a.       Be aware that they occur

b.      Tell people about a perceptual or cognitive bias – discuss them in a structured manner within the team and with the party’s counterparts.

IV.  Mood, Emotion, and Negotiation

A.    Negotiations create both positive and negative emotions

1.      A cognitive assessment of a “good outcome” leads parties to feel happy and satisfied

2.      Negative emotions can result from being turned off by the other party, feeling bad about the development of the negotiation process and the progress being made, or disliking the results

B.     Positive emotions generally have positive consequences for negotiations

1.      Positive feelings are more likely to lead the parties toward more integrative processes.

2.      Positive feelings create a positive attitude toward the other side.

3.      Positive feelings promote persistence in addressing issues and concerns in the negotiation.

C.     Aspects of the negotiation process can lead to positive emotions.

1.      Positive feelings result from fair procedures during negotiation.

2.      Positive feelings result from favorable social comparisons.

D.    Negative emotions generally have negative consequences for negotiations.

1.      Negative emotions may lead parties to define the situation as competitive or distributive.

2.      Negative emotions may undermine a negotiator’s ability to analyze the situation accurately, which adversely affects individual outcomes.

3.      Negative emotions may lead parties to escalate the conflict.

4.      Negative emotions may lead parties to retaliate and may thwart integrative outcomes.

5.      Not all negative emotions have the same effect.

E.     Aspects of the negotiation process can lead to negative emotions

1.      Negative emotions may result from a competitive mind-set.

2.      Negative emotions may result from impasse.

3.      Negative emotions may result merely from the prospect of beginning a negotiation.

F.      The effects of positive and negative emotion in negotiation

1.      Positive feelings may have negative consequences.

2.      Negative feelings may create positive outcomes.

G.    Emotions can be used strategically as negotiation gambits.

1.      Given the power that emotions may have in swaying the other side toward one’s own point of view, emotions may also be used strategically and manipulatively as influence tactics within negotiation.

2.      Negotiators may also engage in the regulation or management of the emotions of the other party.

Summary

In this chapter we have taken a multifaceted look at the role of perception, cognition, and emotion in negotiation. The first portion of the chapter presented a brief overview of the perceptual process and discussed four types of perceptual distortions: stereotyping, halo effects, selective perception, and projection. We then turned to a discussion of how framing influences perceptions in negotiation and how reframing and issue development both change negotiator perceptions during negotiations.

The chapter then discussed one of the most important recent areas of inquiry in negotiation, that of cognitive biases in negotiation. This was followed by consideration of ways to manage misperception and cognitive biases in negotiation. In the final we considered mood and emotion in negotiation.