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174 Chapter 10: Negotiator Cognition
more accurate assessments are likely to be more uncertain and uncomfortable about
the probability of success and more likely to accept compromise. Neale and Bazerman
(1985) found ‘‘appropriately’’ confident negotiators to exhibit more concessionary behavior
and to be more successful than overly confident negotiators. You are most likely
to overestimate your value in a negotiation when your knowledge is limited. As we
learned in Chapter 2, most of us follow the intuitive cognitive rule, ‘‘When in doubt, be
overconfident.’’ One cure for overestimating your value is to seek objective value assessments
from a neutral party. His or her neutral assessment is likely to be closer to
your counterpart’s position than you might have intuitively predicted.
SELF-SERVING BIASES IN NEGOTIATION
Overestimating your value is closely related to the concept of self-serving biases. While
overestimating your value refers to the tendency to exaggerate your indispensability,
self-serving biases refer to the tendency for people to define what is fair in ways that
favor themselves. As a result of self-serving biases, even when two parties both sincerely
claim to want an outcome that is ‘‘fair’’ to both sides, their different notions of
fairness can lead to impasse.
Thompson and Loewenstein (1992) found that self-serving, biased attention to
available information in a conflict affected the parties’ perceptions of what constituted
a fair settlement; in a simulated labor dispute, the magnitude of this bias affected the
length of a strike. Similarly, Babcock, Loewenstein, Issacharoff, and Camerer (1995)
presented participants with diverse materials (depositions, medical and police reports,
etc.) from a lawsuit resulting from a collision between an automobile and a motorcycle.
Participants were assigned the role of plaintiff or defendant and were instructed to attempt
to negotiate a settlement. If they were unable to do so, they would pay substantial
penalties; in addition, they were told that the amount paid by the defendant to the
plaintiff would be determined by an impartial judge who already had made his decision
based on exactly the same case materials. Before negotiating, the participants were
asked to predict the judge’s ruling. They were told that this estimate would not be communicated
to the other party and would not affect the judge’s decision (which already
had been made). Nevertheless, plaintiffs’ predictions of the judge’s award amount were
substantially higher than those of defendants, and the degree of discrepancy between
the predictions of plaintiffs and defendants was a strong predictor of whether they settled
the case (as opposed to relying on the judge’s decision). The participants’ fairness
assessments were biased according to their assigned role.
A number of follow-up experiments attempted to reduce the magnitude of the bias.
Babcock and Loewenstein (1997) rewarded participants who accurately predicted the
judge’s ruling with cash and had them write an essay arguing the other side’s point of
view. Neither of these interventions had a measurable effect; participants consistently
believed that the judge’s own perceptions of fair judgments would match their own.
Other findings from the same series of experiments point to a likely psychological
mechanism underlying self-serving biases in negotiation. Participants were presented
with eight arguments favoring the side to which they had been assigned (plaintiff or
defendant) and eight arguments favoring the other side. They were asked to rate the