By Daryl James
Effective resolution of a collaborative case requires the best negotiation that you can bring to the table. Command of the facts, willingness to consider other participants’ perspectives, creativity in generating options are all important parts of a good negotiator’s conscious skills. Patience and an ability to understand others’ emotional reactions are also essential tools. This paper, however, is directed toward another set of skills: understanding unconscious psychological influence.
In a 2008 article, negotiation researchers Max Bazerman and Deepak Malhotra reported on research in the area of psychological influence in negotiation.1 They identified several specific ways in which negotiators are influenced by others’ behavior which is not designed to change the economic or structural aspects of the bargain. This sort of influence is distinct from economic influence, which changes the other’s incentives or the structure of the negotiation. For instance, a negotiator could offer specific information about the economic consequences of a particular offer, perhaps pointing out how the offer will save taxes or increase profits. This is designed to influence the other’s rational thinking.
Psychological influence, however, targets something different. Bazerman and Malhotra define psychological influence as “the effort to positively influence another party’s attitude towards a given idea or proposition without changing the incentives or objective information set of the other party.”2 This is done by leveraging the other’s psychological biases and heuristics3 in order to frame ideas in a way that increases their appeal for the targeted person.
Unconscious reliance on psychological biases and heuristics leads to a number of systematic errors in decision making. Here’s an example.
Which of these two situations would likely make you happier?
Scenario A: You are walking down the street and find a $20 bill.
Scenario B: You are walking down the street and find a $10 bill. The next day, as you are walking on a different street, you find another $10 bill.
The monetary gains are the same in both scenarios. If you are functioning on cold rationality, then it’s easy to see that in either scenario you have $20, and should be equally happy. But that’s not the way it works for most people, who actually report being happier in scenario B. So, the principal is:
Negotiators are more likely to accept an offer that includes two small gains offered by the other party than an offer that includes one gain that is equal in magnitude to the two small gains.
Now, consider which of these two situations would likely make you unhappier.
Scenario A: You open your wallet and discover you have lost a $20 bill.
Scenario B: You open your wallet and discover you have lost a $10 bill. The following day you lose another $10 bill.
Here, the effect is the opposite. Most people are happier in scenario A than B. The principle:
Negotiators are more likely to accept an offer that entails one loss demanded by the other party (e.g., a cost or penalty) than an offer that requires two smaller losses that add up to the same amount
The heuristic involved is that of diminishing marginal losses and gains, and it governs most people’s emotional reactions to gains and losses in a negotiation. There are many more examples of such heuristics. See the article in the footnote for a more in-depth treatment. Then, consider using this information in your negotiations.
1 Malhotra, D & Bazerman, M. (2008) Psychological influence in negotiation: An introduction long overdue. 34 Journal of Management 509-531.
2 Id. at 512
3 The term heuristics is used in this context to mean a cognitive strategy employed to simplify decision making. One example is the reciprocity heuristic, which leads one to respond to another’s perceived concession or gift with a concession or gift of one’s own.
This article originally appeared in the Winter 2016, CBA Family Law Section Newsletter.