The fundamentals
Cognitive biases in negotiation
Our decisions are not rational. Daniel Kahneman and Amos Tversky proved it: systematic mental shortcuts distort our judgement. Knowing them, in the other side and in yourself, is already taking back control.
Two speeds of thinking
Kahneman distinguishes two systems: one fast and intuitive, economical but fallible, and one slow and analytical, reliable but costly. Under pressure or in a hurry, the first one decides, and that is where biases rush in. Prospect theory adds that losses weigh about twice as much as equivalent gains.
The biases that weigh most
The first number stated sets the reference for the whole discussion, even when it is arbitrary.
Believing that whatever one side gains, the other loses, and missing the value that could have been created.
Overestimating your position, your BATNA, or the odds that the other side will give in.
Keeping only the information that confirms what you already believed.
Winning the auction or the standoff... having paid far too much.
Sources
- Daniel Kahneman and Amos Tversky, « Prospect Theory » (1979).
- Daniel Kahneman, Thinking, Fast and Slow (2011).
- Max Bazerman and Margaret Neale, Negotiating Rationally (1992).