Image Credit: Harri Webb
As negotiators we realize that bias is a big deal. We have to work hard to identify what bias we bring to the table. Once we know what they are, we then have to take steps to make sure that they don’t find their way into our negotiating. However, it turns out that there is another side to this coin. The other side may be bringing their own set of bias to the table and that could impede your ability to strike a deal with them. What do you need to do in order to help them deal with their own set of bias?
The Problem With Bias
When we go to negotiation training, we are often encouraged to ‘debias’ our own behavior by identifying the assumptions that may be clouding our judgment. It turns out that we all have a number of judgment biases – common, systematic errors in thinking that are likely to affect our decisions and harm our outcomes in a negotiation. These can include the winner’s curse, the mythical fixed-pie, egocentrism, overconfidence, escalation of commitment, the influence of vivid data, and the list goes on and on.
However, in a negotiation, recognizing and overcoming your own judgment biases turns out to be only one side of the coin. After all, the other side is likely to be just as biased as you are. This is a fact that’s easy to forget in the heat of the moment. During a negotiation, when others appear to be acting irrationally, what is the best way for you to respond?
Most negotiators would get excited when they see the other side giving into their bias. We may think that we should use their mistakes to our advantage. Sadly, things are not that simple. Instead, your goal should be to not only identify the biases in the other side’s behavior but to make an effort to confront these judgement mistakes – and, most often, to even try to defuse them. What we all need are some simple rules for improving our negotiation performance by anticipating, identifying, and, when possible, neutralizing the judgement biases of the other side.
How To Deal With The Other Side’s Bias
The first thing that we need to do is to find a way to help others to be less biased. A question that every negotiator needs to be able to answer is would you rather negotiate with someone who is rational or irrational? Too many of us falsely assume that bargaining with an irrational partner can lend you to a competitive advantage. We need to consider that irrational negotiators are overconfident and uncreative. They may continue to hold out for deals that you’ll never give them. They might assume that a supply of resources is fixed and, as a result, fail to explore any tradeoffs among issues. When the other side is affected by judgment biases, they’re likely to make a variety of other mistakes that hurt not only their interests but potentially also yours. For these reasons, it’s in your best interests to help the other side think more clearly.
During a negotiation, you are not going to want to follow the crowd. In many negotiations, experienced negotiators follow best practices, emulate the behaviors of experts, and do things the way they have always been done. They cite their years of experience, yet they are often unable to back up their theories about negotiations with logic. Too many negotiators follow these types of intuitions unquestioningly. All too often negotiators follow their industry’s folklore rather than using theories that have been empirically found to produce more effective results. Yes, experience is valuable. However, experience accompanied by the wisdom of analysis is far more valuable. What does this mean for us? Instead of following common wisdom, we need to seek out data that disconfirms the experts and then systematically apply these findings to our decisions and negotiations.
Finally, during a negotiation we can use irrationality to create contingent agreements with the other side. Sometimes the best way to manage another negotiator’s judgment biases is not to try to cure them but rather to accept them. The question is how can we go about doing this? You can do this by making a bet that you expect to be favorable to you and costly to the other side. Most negotiators know the benefits of contingent agreements. When they are built into formal contracts, contingent agreements with incentives and penalties can increase the odds of compliance by both sides with a deal. Contingent agreements can also offer a novel opportunity for you to use the other side’s biases to your advantage in a negotiation.
What All Of This Means For You
When we enter into a negotiation, we have been instructed that we need to be careful that we don’t bring any of our bias with us. The challenge is that we can have a lot of bias! However, we’ve been told why allowing them to enter a negotiation with us is a bad idea. However, it turns out that there is something else that we need to concern ourselves with. It turns out that the other side of our next negotiation may show up with their own biases. If that’s true, then we have a responsibility to make them aware of them and to deal with them.
In the negotiation training that we have all been to, we’ve been taught that any bias that we have need to be left outside of the negotiations. If we don’t do this, then they can cloud our judgement. Since the other side may show up with their own bias, we need to be able to find ways to identify them and try to neutralize them. During a negotiation we need to look for ways to help the other side to become less biased. We don’t want to follow the crowd and rely on things that have worked in the past. If necessary, we can use the other side’s irrationality to strike a contingent agreement with them that will meet both side’s needs.
Many negotiators will respond to an opponent’s perceived irrationality with both frustration and irritation. A much better strategy is to regard the other side’s biases as inevitable facts of negotiating life, ones that can be confronted with a number of empirically proven strategies.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: Do you think that it is wise to tell the other side that they have bias during a negotiation?
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What We’ll Be Talking About Next Time
When we enter into a negotiation, we are hopeful that we’ll be able to find a way to reach a deal with the other side. However, as we all know, there is always the possibility that we are going to run into problems. The way that we see things and the way that the other side sees things may be different. If this is the case, then there is the very real possibility that we are going to encounter an impasse. If this happens then we may not be able to reach a deal with the other side. How can we prevent this from happening?