The Problem With Cognitive Bias During A Negotiation

The Problem With Cognitive Bias During A Negotiation

Sometimes we can create our own reality during a negotiation
Sometimes we can create our own reality during a negotiation
Image Credit: BetIwontFail

When we enter into a negotiation, we’d like to think that our minds are clear and that we are gong to be able to think systematically throughout the negotiations as we use our negotiation styles and negotiating techniques. However, all too often it turns out that we are being affected by bias that can change how we think. Most of us believe that we have the ability to determine the difference between a situation in which we can rely on our intuition and those that require us to take a step back and give things some more thought. However, studies have shown that in most cases we are wrong.

The Difference Between Intuition And Reality

So how do you think during a negotiation? We’d all like to think that during a negotiation our thinking is going to be both rational and logical. However, it turns out that all too often this is not the case. The researchers who look into our thinking during negotiations have come up with two different types of thinking patterns that we seem to engage in. The names that they have given to these two different types of thinking are System 1 and System 2.

We are all very familiar with the type of thinking that is called System 1 thinking. System 1 thought describes our intuition: quick, automatic, effortless, and influenced by emotion. During a negotiation, this is going to be the type of thinking that we will use to react to things that the other side does or says. No addition thought or contemplation is required. However, we couldn’t make it through life if this was the only type of thinking that we did. This is why there is what is called System 2 thought. System 2 thought is slower, more conscious, effortful and logical. When we are faced with a real problem that does not have an answer that just jumps out at us, this is the type of thinking that we’ll use to come up with solutions to it.

As negotiators, we need to understand that when we are carefully considering options, we are using System 2 thinking. However, when we are simply acting on intuition, we are using System 1 thinking. During the course of a given negotiation, it is entirely possible that we will find ourselves switching between these two forms of thinking. We can all think of instances in which we acted rashly, relying on System 1 thoughts and emotions, as well as times when we carefully evaluated a situation using System 2 logic. The only challenge is that we may have used System 1 thinking when we should have been using System 2 thinking.

Using System 1 vs Using System 2 Logic During A Negotiation

As negotiators we need to become aware of what type of thinking that we are currently using. Additionally, we need to decide if it is the right type of thinking for the given situation. The problem that we seem to run into over and over again is that during a negotiation a lot of us will end up falling back and using our System 1 type of thinking. Why do we do this? We will start to use our intuition more as a negotiating situation becomes more and more complex. What starts to happen is that we reach a state where everything is just too complex to keep straight. When it becomes hard to process information, we will naturally move from System 2 thinking to System 1 thinking.

If there is any good news for us here, it’s that we don’t always have to be using our System 2 thinking. There are many decisions during a negotiation that don’t require this level of thinking. Negotiators need to realize that when things such as deadlines for tasks that are not that important are being discussed, System 2 thought is not required. Likewise, when you are having an informal discussion with the other side in regards to things that you are planning on coming back to in more detail later on in the negotiations, System 1 thought is fine to be using.

If we can realize that we have two different ways to think during a negotiation then we’ll have a better grasp of what resources we can use. We need to understand that one way of thinking may not necessarily be better than the other. Case in point is that if we took the time to logically reason through every decision, then this could turn out to be quite expensive in terms of time and effort on our part. What’s even worse is that if we are not careful, it could lead to decision paralysis. This being said, when we reach the most important part of a negotiation, this would be the time to slow things down and take the time to use our System 2 thinking in order to make sure that we don’t overlook anything.

What All Of This Means For You

In order to be able to reach the best deal during a principled negotiation, as negotiators we need to make sure that we can think clearly. However, all too often bias can start to creep into how we are thinking. What this means for us is that there may be times that we think that we can rely on our intuition to make good negotiating decisions and it turns out that we really can’t. What’s going on here?

We do not always think the same way. It turns out that we have two completely different ways of thinking and they are called System 1 and System 2. System 1 thought describes our intuition: quick, automatic, effortless, and influenced by emotion. System 2 thought is slower, more conscious, effortful and logical. During a negotiation, if we react rashly to something that the other side has said or done, then we are using our System 1 thinking when we should be using our System 2 thinking. If the negotiation starts to become more complex, then it can be very easy for us to start to use our System 1 thinking. We don’t always have to use System 2 thinking – some issues are simple enough that they don’t require detailed thinking. We do need to be careful because System 2 thinking takes more time and if we are not careful, our negotiations could grind to a halt if we spend too much time thinking about individual items.

Every negotiator has the ability bring two different types of thinking to a negotiation. Each of these ways of thinking has its own advantages and disadvantages. As negotiators we need to understand the differences between these types of thinking and then make sure that we apply them at the right times.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: What do you think would be the best way to determine which style of thinking you are currently using?

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What We’ll Be Talking About Next Time

When we picture ourselves in a negotiation, we often see ourselves using our negotiation styles and negotiating techniques to make a point. Or perhaps at the board drawing out a scenario. Or maybe even handing papers to the other side for them to review. What we don’t often see is ourselves on the defensive. However, if the other side consists of skilled negotiators, there is a very good chance that at some point in time during the negotiations we’re going to end up with our backs to the wall. What we need are some defensive strategies that we can use when this happens to us.

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