![]() To an outsider, those caught up in disintegrating partnerships or marriages often appear to hold exaggerated views of each other. This often leads to exaggerated perceptions of the other side's position and overestimates of the actual substantive conflict. Extensive research has documented an unconscious mechanism that enhances one's own side, "portraying it as more talented, honest, and morally upright," while simultaneously vilifying the opposition. While we systematically err in processing information critical to our own side, we are even worse at assessing the other side-especially in an adversarial situation. ![]() ![]() Getting too committed to your point of view-"believing your own line"-is an extremely common mistake. Similarly, Arthur Andersen likely exhibited overconfidence in its arbitration prospects over the terms of separation from Andersen Consulting (now Accenture). The company certainly appeared overoptimistic about its chances in court. This cognitive role bias helps explain why Microsoft took such a confrontational approach in its recent struggle with the U.S. Without significant risk aversion, the divergent assessments would block any out-of-court settlement. This means that, in settlement talks, the plaintiff's expected BATNA for a court battle (to get $700,000 minus legal fees) will exceed the defendant's assessment of his exposure (to pay $500,000 plus fees). Suppose a plaintiff believes he has a 70 percent chance of winning a million-dollar judgment, while the defense thinks the plaintiff has only a 50 percent chance of winning. At the negotiating table, clinging firmly to the idea that one's counterpart is stubborn or extreme, for example, is likely to trigger just that behavior.Įven comparatively modest role biases can blow up potential deals. These valuation gulfs had no basis in fact they were driven entirely by random role assignments. Those assigned the role of seller gave median valuations more than twice those given by the executives assigned to the buyer's role. After plenty of time for analysis, all subjects were asked for their private assessment of the target company's fair value-as distinct from how they might portray that value in the bargaining process. The executive subjects were randomly assigned to the negotiating roles of buyer or seller the information provided to each side was identical. Harvard researchers gave a large group of executives financial and industry information about one company negotiating to acquire another. The following experiment shows the process at work. People tend unconsciously to interpret information pertaining to their own side in a strongly self-serving way. Yet, just as a pilot's sense of the horizon at night or in a storm can be wildly inaccurate, the psychology of perception systematically leads negotiators to major errors. You may be crystal clear on the right negotiation problem-but you can't solve it correctly without a firm understanding of both sides' interests, BATNAs, valuations, likely actions, and so on. The good news: Savvy negotiators can take steps to subdue these potentially damaging biases. Sebenius describes number six on the list, "Failing to correct for skewed vision." Negotiators are often too confident of their own position and too quick to demonize the other side, he writes. In the Harvard Business Review excerpt below, Professor James K. In addition to the myriad complexities of the deal itself, even the best negotiators often have to contend with their own potential to fumble in six very common ways (see sidebar). ![]() You've just taken a seat at the negotiating table.
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