Learn the social psychology of negotiation, including those cognitive biases that can help you win your next negotiation.

1. Resisting and Using Cognitive
Biases to Get a Better Deal
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2. if you know your enemies and know
yourself, you will not be imperiled in a
hundred battles; if you do not know your
enemies but do know yourself, you will
win one and lose one; if you do not know
your enemies nor yourself, you will be
imperiled in every single battle
sun tzu孫子
6th century bc general, the art of war
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© Victoria Pynchon ‘07

3.  a theory of the mind
the three cognitive biases
that interfere with our ability to
negotiate the best deal
three really good ways to
combat those biases
and two ways to consistently
get the better deal
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© Victoria Pynchon ‘07

4. theory of mind
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5. our ability to reason arose from our need to understand one another’s
intentions and motivations, allowing us to coordinate within a group
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© Victoria Pynchon ‘07

6. but we never learned to read one another’s minds; suspicion followed
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© Victoria Pynchon ‘07

7. we developed
certain
tendencies of
thought called
cognitive
biases
universal ways of
thinking about
what motivates
other people
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© Victoria Pynchon ‘07

8. cognitive biases that interfere with our
ability to negotiate a good settlement
CB 1: reactive devaluation
CB 2: confirmation bias
CB 3: clustering illusion
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© Victoria Pynchon ‘07

9. How they work; why they’re harmful &
how we can avoid their ill effects
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10. 2 ways to consistently gain
the upper hand by
anchoring and
framing
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© Victoria Pynchon ‘07

11. what do we most want to know?
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© Victoria Pynchon ‘07

12. What are they
• What’s their bottom line?
Thinking?
• Are they withholding
evidence that
undermines their case
and supports ours
• What do they really need
• How do they value their
case
– Their chances of
winning
– The amount of their
damages
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13. onlyseven percent
of negotiators
sought
information that
would have
revealed
opponent’s true
goals when it
would have been
dramatically
helpful to do so.
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© Victoria Pynchon ‘07

14. What type of
information would
drastically help?
• Their future plans
• Their motivations
• Their fears
• Their desires
• The basis for their
offer/demand
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15. Failure to ask
diagnostic questions
is particularly
troublesome in light
of the fact that YOUR
belief about THEIR
bottom line will have
more influence on
the outcome of the
negotiation than any
other factor
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© Victoria Pynchon ‘07

16. Let’s return to the cognitive biases that might
keep us from asking these questions
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© Victoria Pynchon ‘07

17. reactive
devaluation
the tendency to discount as
unworkable, unworthy,
wrong or even sinister any
suggestion from the
opponent, just because the
opponent is the source of
the idea
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© Victoria Pynchon ‘07

18. reactive devaluation
prevents us from learning another’s mind
what do they want/need
what do they have of value
how do they value it
how do they value what we have
why do they want what they are seeking
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© Victoria Pynchon ‘07

19. solutions for reactive
devaluation
ask diagnostic questions
Interests
need $100K to design new
trademark
Priorities
trademark design less
important than renegotiation of
royalty agreement
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© Victoria Pynchon ‘07

20. confirmation bias
tendency to
search for and
interpret
information in a
way that
confirms our
preconceptions
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© Victoria Pynchon ‘07

21. confirmation bias
prevents us from knowing our own minds/risks
Case
Evaluation
Credibility
Risk
assessment
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22. confirmation bias
solutions
neutral third party
story telling
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23. clustering illusion
we tend to see
patterns where
•We tend to see patterns where none exist
none exist
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© Victoria Pynchon ‘07 ‘07
© Victoria Pynchon

24. clustering illusion problems
inhibits ability to “read the mind” of our enemy
prevents us from accurately assessing
•perils
•opportunities
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© Victoria Pynchon ‘07

25. clustering illusion
solution:
strategic joint sessions
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© Victoria Pynchon ‘07

26. How do we
influence others and
prevent ourselves
from being
irrationally
influenced?
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© Victoria Pynchon ‘07

27. two cognitive biases we can
immediately use to . . .
. . . influence & avoid being influenced
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© Victoria Pynchon ‘07

28. anchoring
we tend to be
influenced by
any number
that enters the
negotiation
environment
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© Victoria Pynchon ‘07

29. the negotiator who
makes the first
reasonable offer
will set the
bargaining range
for the entire
negotiation
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© Victoria Pynchon ‘07

30. resist anchoring
 create own false anchor
 move toward that number 30
© Victoria Pynchon ‘07

31. framing
influence or
be influenced
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© Victoria Pynchon ‘07

32. framing
a means of
influencing
another’s
perception by
narrowing the
ways in which an
item or an idea
what if you had to measure the size of
can be something by using two frames?
characterized what if you could only use one?
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© Victoria Pynchon ‘07

33. framing experiments
• how tallwas the
basketball player
–79 inches
• how short was
the basketball
player?
–69 inches
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© Victoria Pynchon ‘07

34. language that emphasizes
use framing in position
negotiations  buyer uses words of
diminishment
 seller uses words of
increase
reframe losses as gains &
gains as losses
don’t frame too early or
you may lose
opportunities
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© Victoria Pynchon ‘07

35. if you know your enemies and
know yourself, you will not be
imperiled in a hundred battles
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© Victoria Pynchon ‘07