Five common psychological negotiation mistakes and how to avoid them
Our brain is a wonderful thing. But sometimes it leads us down the wrong path in negotiations. The reasons for this are unconscious emotions and perceptual errors to which we can succumb.
As with everything in negotiation, the same applies here: What I recognize, I can eliminate. What I do not recognize can in the worst case lead to me being controlled.
We all tend to repeat the same mistakes in negotiations. Fortunately, through awareness, preparation and practice, we can reduce our mistakes in negotiations and get better deals.
Sometimes our negotiation mistakes are obvious: we inadvertently give away our walk-away, react aggressively to the other party when patience would be appropriate, or mess up our own numbers. More often, however, our negotiation mistakes are invisible: we reach a deal but are unaware that we could have reached a significantly better one if we hadn’t fallen into common mistakes and traps. By addressing these five common negotiation mistakes and knowing how to avoid them, you can optimize your results:
1. We fall back on cognitive shortcuts
Psychologists have found that we all resort to cognitive shortcuts in negotiations, especially when we are unprepared and have little time. For example, we tend to greatly overestimate or seriously underestimate our chances of getting our way. And we pay more attention to issues that seem concrete to us (such as the short-term salary increase in a job negotiation or the price in a product) than to issues that do not seem so concrete (such as our future career stages in the company, the length of the commute, or price stability over the life of a contract), but which could have a greater impact on our overall negotiation outcome in the future. This Vividness Effect1 often leads to erroneous decisions in negotiations.
We also often think we know what the other party wants, what they are up to, and how they are proceeding. We like to indulge in presumptions. Our brain loves these shortcuts of presumption because they require less energy than to analyze the actual circumstances of the negotiation in detail and come to evaluations on that basis. Presumptions unfortunately create filters in our perception, through which only what confirms the presumption is allowed to pass. As a result, we lose important information that would improve our outcome.
We can strip away our filters of preconceptions and reduce the harmful effects of those presumptions by becoming aware of what our presumptions are before the negotiation and writing them down. Then, in the negotiation, we look for what goes against them. Because in negotiations, the basic rule to follow is always: “Stop guessing! Start Testing!”2
2. We let our emotions get the better of us
In addition to cognitive biases, negotiators are also prone to emotional biases — another issue that prevents us from achieving our optimal outcome. Emotions are as much a part of a negotiation as the air we breathe. In a negotiation, there is always another party or person standing between us and our result to be achieved. This circumstance of perceived dependency alone causes emotions to arise in us. Not too bad on its own.
But strong emotions can also prevent us from making rational decisions — and result in negotiation mistakes. Negotiators often don’t realize, or don’t realize until after the negotiation, how emotions affect the outcome. For example, anger can lead us to make overly risky decisions. This can cause an “emotional” termination rather than a “calculated” termination. Jennifer Lerner3 , a professor at Harvard Kennedy School, has found in studies that the emotion of grief, for example, often causes us to overpay in negotiations. Grief as an emotion can arise in a negotiation at the very idea of a loss (relationship, product, etc.). Those who know about this can use such circumstances accordingly in a manipulative way against you.
So, when negotiations get heated, take a break to allow everyone involved to cool down. Interruptions are not a sign of weakness.
3. Non-verbal blindness: we are not able to recognize the emotions of the other party
Managing your own emotions is important. Analyzing the other person’s emotions correctly leads to optimized results. However, “non-verbal blindness” then stands in our way.
In negotiations, many people try to assess whether their counterpart is bluffing or deceiving. In doing so, most rely on their gut feeling rather than on scientifically sound analyses.
Today we know that the higher the relevance of a topic (or the subject of the negotiation) and the associated subjective expectation of winning or losing, the more clearly the associated emotions show themselves in the form of nonverbal reactions. This is because nonverbal communication always runs parallel to our verbal expressions, usually automatically. And even when we are silent, we are still communicating – it is simply impossible to refrain from doing so. Or, as the Austrian psychotherapist Paul Watzlawick said, “You can’t not communicate.”
For negotiations, this means that verbal and nonverbal signals are quite interconnected, moreso than you might at first think. Science has brought to light ever more exciting findings about these connections. Gaze behavior, facial expressions, gestures (posture and body movement), distance, vocal characteristics (tone, rate of speech, pauses, etc.) always express something, whether we want them to or not. Science on the subject of non-verbal analysis has made tremendous progress in recent years. Advances, which professional negotiators have been able to incorporate into their toolbox have moved away from “gut feelings”, and instead apply scientific analysis.
4. Allow sunk cost bias or cherry picking
At the end of a negotiation, a situation sometimes arises that we call cherry-picking. The other side wants to change a negotiation package that has been discussed, often with the indication that, for example, the boss or the legal department still has some additional demands. After investing so much time, energy and resources in the negotiation, our emotions often scream, “Don’t jeopardize the outcome by saying no!” and we give in. Without negotiating. Without demanding anything. Fear is always a bad advisor. This willingness to hold on to a certain state and give in quickly is called the Sunk Cost Bias4 , and is an important part of many negotiations. Sunk cost bias is an unsightly psychological phenomenon that causes people to be more willing to hold on to something even if it has negative consequences simply because they have already made a certain investment (time, energy, and brain resources), which they subconsciously do not want to jeopardize. This bias often occurs in negotiations when there are subsequent demands from the other side after prolonged negotiations about investments, buying or selling a product, or awarding a contract. It is always when we have already invested a lot of time, energy (in the form of glucose), or resources (human and intangible). We give in quickly so as not to jeopardize the overall outcome, and in doing so establish a pattern that the other side will use against us again and again. The next time you cherry-pick, make yourself aware of what is happening. If there is a demand, mentally take a step back and remember: “for both of us, the sentence applies: Nothing is negotiated until everything is negotiated.” Now open the package and negotiate this point. This will help you optimize your outcome and protect you from this pattern being used against you in future instances.
5. Inertia as self-deception – lack of preparation
The most common negotiation mistake business people make is rushing into a negotiation without thorough preparation. You may think you are thoroughly prepared if you have a clear idea of what you want to get out of a deal. That’s not nearly enough. Lack of preparation is often justified with the excuse “no time”, “I’ll get it done” or “I’ve already negotiated with the person/organization”. This inertia leads to self-deception and opens the door for your counterpart to achieve a better result — but not for you.
Successful negotiators, on the other hand, know how to view and analyze the upcoming talks from many perspectives.
It’s not for nothing that they say, “Better to sweat before the negotiation than bleed in the negotiation.”
Do your homework to avoid the above-mentioned mental errors. Engage intensively with your negotiating counterpart. In addition, remember that they are also in a dependency web. Be
aware of what your best alternative to a negotiated agreement may be and where your walk-away lies — that is, the point at which you would leave the negotiating table. Also prepare enough demands for your negotiations (rule of thumb: it’s better not to go into negotiations with less than ten demands) and don’t hope that you will just think of any demands in the negotiation. This won’t work very well when you’re under stress.
If you are negotiating with others, set up a team to discuss tasks and rules.
And always remember, “No preparation is also preparation — preparation for defeat!”
And you can avoid that.
1Cf. Heuer, Jr., Richards J.: Psychology of Intelligence Analysis, Center for the Study of Intelligence, 1999, S. 118 f.
2Deepak Malhotra und Max H. Bazerman: Psychological Influence in Negotiation: An Introduction Long Overdue, in: Journal of Management (JOM), Volume 34, Issue 3, June 2008. https://doi.org/10.1177/01492063083160
3Dorison, Charles A., Ke Wang, Vaughan W. Rees, Ichiro Kawachi, Keith M. M. Ericson und Jennifer S. Lerner: Sadness, but Not All Negative Emotions, Heightens Addictive Substance Use, in: Proceedings of the National Academy of Sciences of the United States of America (Dezember 2019).
4Bishop,Michael A. & Trout, J. D.: Epistemology and the Psychology of Human Judgment, in: Oxford University Press, New York 2004.