Chapter 6

PERCEPTION,
COGNITION, AND
EMOTION
PERCEPTION, COGNITION, AND
EMOTION IN NEGOTIATION
• The basic building blocks of all social encounters are:

• Perception

• Cognition
 Framing

 Cognitive biases

• Emotion
PERCEPTION
Perception is:

• The process by which individuals connect to their

environment.

• A complex physical and psychological process

• A “sense-making” process
 THE PROCESS OF PERCEPTION

The process of ascribing meaning to messages and events is strongly influenced by the
perceiver’s current state of mind, role, and comprehension of earlier communications.
– People interpret their environment in order to respond appropriately
– The complexity of environments makes it impossible to process all of the information
– People develop shortcuts to process information and these shortcuts create
perceptual errors
 PERCEPTION IN NEGOTIATION
EXAMPLE

• Employee assumes manager views their performance

negatively → Lowers salary request.

• Manager perceives low request as lack of ambition →

Affects promotion decisions.

• Misaligned perceptions lead to missed opportunities.

PERCEPTUAL DISTORTION
• Four major perceptual errors:
• Stereotyping
• Halo effects
• Selective perception
• Projection
 STEREOTYPING
• Stereotyping:
 Is a very common distortion
 Occurs when an individual assigns attributes to another
solely on the basis of the other’s membership in a particular
social or demographic category
• Example: Assuming that younger negotiators are
inexperienced and cannot handle complex deals.
 HALO EFFECTS
Halo effects:

 Are similar to stereotypes

 Occur when an individual generalizes about a variety of attributes based on

the knowledge of one attribute of an individual

Example: If a negotiator knows the other party graduated from a prestigious

university, they might assume that the person is highly competent, trustworthy, and

skilled in negotiation—even without concrete evidence of these qualities.

SELECTIVE PERCEPTION
• Selective perception:
 Perpetuates stereotypes or halo effects

 The perceiver singles out information that supports a prior

belief but filters out contrary information
• Example: A manager thinks their team performs poorly under
pressure. During a high-stakes project, they only notice
mistakes, ignoring successful efforts to meet deadlines. This
results in a biased view of the team's performance.
 PROJECTION

Projection:
 Arises out of a need to protect one’s own self-concept

 People assign to others the characteristics or feelings that

they possess themselves

Example: A negotiator who feels anxious about the deal

assumes that the other party is also nervous and uncertain.
DEFINITION OF FRAMES:

Frames are subjective mechanisms through which

individuals evaluate and interpret situations. They
shape how people perceive the world, influencing
their decisions and actions by providing context,
meaning, and significance to events or processes.
 EXAMPLE OF FRAMES:

• In a negotiation, a manager might frame a budget cut as an

opportunity for innovation, encouraging the team to think creatively about
resource allocation. This positive frame motivates the team to pursue
new solutions rather than viewing the cut as a setback.

• Conversely, if a negotiation is framed around competition (e.g., “This is

a zero-sum game”), participants may feel threatened and focus on
winning at all costs, which can hinder collaboration and trust.

These frames define how individuals perceive events and influence their
subsequent actions.
FRAMING
• Frames:
• Represent the subjective mechanism through which
people evaluate and make sense out of situations
• Lead people to pursue or avoid subsequent actions
• Focus, shape and organize the world around us
• Make sense of complex realities
• Define a person, event or process
• Impart meaning and significance
 TYPES OF FRAMES

1. Substantive Outcome – Kết quả đáng kể: The significant results or impacts
of an action or decision.

2. Aspiration - Khát vọng: The goals or ambitions that drive individuals or

organizations.

3. Process - Quy trình: The series of steps or actions taken to achieve a goal.

4. Identity - Danh tính: The characteristics or qualities that define a person or

organization.

5. Characterization - Mô tả: The way in which something is described or

represented.
TYPES OF FRAMES

• Substantive Outcome: The significant results or

impacts of an action or decision.

• Example: In a negotiation for a new contract, the

substantive outcome may include a 15% increase in
salary and improved health benefits for employees,
significantly enhancing their overall compensation
package.
TYPES OF FRAMES

• Aspiration: The goals or ambitions that drive individuals

or organizations.

• Example: A tech startup has the aspiration to become a

leader in artificial intelligence innovation, aiming to
develop cutting-edge products that transform industries
and improve everyday life.
TYPES OF FRAMES

• Process: The series of steps or actions taken to

achieve a goal.

• Example: The process of launching a new

product involves several steps, including market
research, product design, testing, marketing
strategy development, and distribution planning.
TYPES OF FRAMES

• Identity: The characteristics or qualities that define

a person or organization.

• Example: The identity of a non-profit organization

is defined by its commitment to environmental
sustainability, community engagement, and social
justice initiatives, shaping how it is perceived by the
public.
TYPES OF FRAMES

• Characterization: The way in which something is

described or represented.

• Example: In a performance review, the

characterization of an employee’s work may
highlight their exceptional teamwork and problem-
solving skills, portraying them as a valuable asset
to the organization.
TYPES OF FRAMES

• Loss-Gain: The evaluation of what is lost versus

what is gained in a given situation.

• Example: In a merger negotiation, the loss-gain

analysis might evaluate the potential loss of certain
jobs against the gain of increased market share
and improved operational efficiency for the
combined companies.
HOW FRAMES WORK IN NEGOTIATION

• Negotiators can use more than one frame

• Mismatches in frames between parties are sources of

conflict

• Particular types of frames may lead to particular types of

arguments

• Specific frames may be likely to be used with certain types

of issues

• Parties are likely to assume a particular frame because of

various factors
INTERESTS, RIGHTS, AND
POWER
• Parties in conflict use one of three frames:

• Interests: people talk about their “positions” but often

what is at stake is their underlying interests

• Rights: people may be concerned about who is “right” –

that is, who has legitimacy, who is correct, and what is fair

• Power: people may wish to resolve a conflict on the basis

of who is stronger
THE FRAME OF AN ISSUE CHANGES AS
THE NEGOTIATION EVOLVES

• Negotiators tend to argue for stock issues or concerns that

are raised every time the parties negotiate

• Each party attempts to make the best possible case for his
or her preferred position or perspective

• Frames may define major shifts and transitions in a

complex overall negotiation

• Multiple agenda items operate to shape issue development

SOME ADVICE ABOUT PROBLEM
FRAMING FOR NEGOTIATORS
• Frames shape what the parties define as the key
issues and how they talk about them
• Both parties have frames
• Frames are controllable, at least to some degree
• Conversations change and transform frames in ways
negotiators may not be able to predict but may be
able to control
• Certain frames are more likely than others to lead to
certain types of processes and outcomes
COGNITIVE BIASES IN NEGOTIATION
• Negotiators have a tendency to make systematic errors

when they process information. These errors, collectively

labeled cognitive biases, tend to impede negotiator

performance.

• Example: For instance, a negotiator might focus too much

on the first offer they receive (anchoring bias), leading

them to overlook better options later in the discussion.

COGNITIVE BIASES
• Irrational escalation of • The winner’s curse
commitment • Overconfidence
• Mythical fixed-pie beliefs • The law of small numbers
• Anchoring and adjustment • Self-serving biases
• Issue framing and risk • Endowment effect
• Availability of information • Ignoring others’ cognitions

• Reactive devaluation
 IRRATIONAL ESCALATION OF COMMITMENT

• Irrational escalation of commitment

• Negotiators maintain commitment to a course of
action even when that commitment constitutes irrational
behavior
• For example, a tech startup keeps developing a
product that customers have repeatedly rejected,
believing that more investment will eventually turn it
around.
 MYTHICAL FIXED-PIE BELIEFS

• Mythical fixed-pie beliefs

• Negotiators assume that all negotiations (not just some)
involve a fixed pie.
• For instance, two companies negotiating a merger
assume that the total resources are limited and cannot
see opportunities for creating additional value together.
 ANCHORING AND ADJUSTMENT
• Anchoring and adjustment

• The effect of the standard (anchor) against which subsequent adjustments (gains or
losses) are measured

• The anchor might be based on faulty or incomplete information, thus be misleading

• For example, A car buyer sees the sticker price of a vehicle at $30,000 and uses that
number as a reference point (anchor) when negotiating. Even if the buyer knows that
similar cars usually sell for $25,000, they might end up paying more than they
intended because of the initial price.
 ISSUE FRAMING AND RISK
• Issue framing and risk

• Frames can lead people to seek, avoid, or be neutral

about risk in decision making and negotiation

• A negotiator presents a potential deal as a "70% chance

of success" rather than a "30% chance of failure." This
framing can significantly affect how the other party
perceives the deal and their willingness to agree.
 AVAILABILITY OF INFORMATION

• Availability of information
 Operates when information that is presented in vivid or attention-
getting ways becomes easy to recall.
 Becomes central and critical in evaluating events and options
 A manager makes a decision based on recent performance
reports that are readily available, ignoring older but relevant data
that could provide a more complete picture of the situation.
THE WINNER’S CURSE

• The winner’s curse

 The tendency to settle quickly on an item and then
subsequently feel discomfort about a win that comes too easily
 An auction bidder wins a rare painting for $500,000, believing
they got a great deal. However, after the purchase, they find
out the painting was not worth more than $300,000, leading
to regret over their impulsive bid.
OVERCONFIDENCE

• Overconfidence
• The tendency of negotiators to believe that their ability to
be correct or accurate is greater than is actually true
• A negotiator is overly confident in their negotiation skills
and believes they can easily convince the other party to
agree to their terms, only to find themselves
outmaneuvered and losing the deal.
 THE LAW OF SMALL NUMBERS

• The law of small numbers

• The tendency of people to draw conclusions from small sample
sizes
• The smaller sample, the greater the possibility that past
lessons will be erroneously used to infer what will happen in the
future
• A salesperson believes that because they had success closing
two deals in a row, they will continue to succeed without
considering that their sample size is too small to be
reliable.
 SELF-SERVING BIASES
• Self-serving biases
• People often explain another person’s behavior by making attributions, either to
the person or to the situation
• The tendency, known as fundamental attribution error, is to:
 Overestimate the role of personal or internal factors
 Underestimate the role of situational or external factors

•When a team successfully completes a project, the team members credit their
skills and hard work. However, when they face setbacks, they blame external
factors like market conditions or lack of support from management.
ENDOWMENT EFFECT

• Endowment effect
• The tendency to overvalue something you own or believe
you possess
• A person who owns a concert ticket is unwilling to sell it
for $100, even though similar tickets are selling for $75.
They value the ticket more highly simply because they
own it.
 IGNORING OTHERS’ COGNITIONS
• Ignoring others’ cognitions

• Negotiators don’t bother to ask about the other party’s

perceptions and thoughts

• This leaves them to work with incomplete information, and

thus produces faulty results

• During negotiations, one party fails to acknowledge the

concerns and priorities of the other side, leading to a breakdown
in communication and the potential for an agreement.
REACTIVE DEVALUATION

• Reactive devaluation
• The process of devaluing the other party’s concessions
simply because the other party made them
• When one party proposes a reasonable compromise
during negotiations, the other party dismisses it as
unworthy simply because it came from their opponent,
not considering the merits of the proposal itself.
MANAGING MISPERCEPTIONS AND
COGNITIVE BIASES IN NEGOTIATION

The best advice that negotiators can follow is:

 Be aware of the negative aspects of these biases

 Discuss them in a structured manner within the

team and with counterparts
 MOOD, EMOTION, AND NEGOTIATION
• The distinction between mood and emotion is based on three

characteristics:

• Specificity: Emotions are usually triggered by a specific event or object,

making them more targeted. Moods, on the other hand, are more diffuse

and lack a clear cause.

• Intensity: Emotions tend to be more intense and powerful than moods.

• Duration: Emotions are relatively short-lived, while moods can persist for

hours, days, or even longer.

MOOD, EMOTION, AND NEGOTIATION

• Negotiations create both positive and negative emotions

• Positive emotions generally have positive

consequences for negotiations
 They are more likely to lead the parties toward more integrative
processes
 They also create a positive attitude toward the other side

 They promote persistence

MOOD, EMOTION, AND NEGOTIATION

• Aspects of the negotiation process can lead to

positive emotions
 Positive feelings result from fair procedures during
negotiation
 Positive feelings result from favorable social
comparison
MOOD, EMOTION, AND NEGOTIATION

• Negative emotions generally have negative consequences for

negotiations
• They may lead parties to define the situation as competitive or
distributive
• They may undermine a negotiator’s ability to analyze the
situation accurately, which adversely affects individual
outcomes
• They may lead parties to escalate the conflict

• They may lead parties to retaliate and may thwart integrative

outcomes
MOOD, EMOTION, AND NEGOTIATION
• Aspects of the negotiation process can lead to negative emotions
• Negative emotions may result from a competitive mind-set
• Negative emotions may result from an impasse
• Negative emotions may result from the prospect of beginning a
negotiation

• Effects of positive and negative emotion

• Positive emotions may generate negative outcomes
• Negative feelings may elicit beneficial outcomes

• Emotions can be used strategically as negotiation gambits

Chapter 7

COMMUNICATION
COMMUNICATION IN
NEGOTIATION
• Communication processes, both verbal and
nonverbal, are critical to achieving negotiation
goals and to resolving conflicts.

• Negotiation is a process of interaction

• Negotiation is a context for communication

subtleties that influence processes and outcomes
BASIC MODELS OF COMMUNICATION

• Communication is an activity that occurs between two people:

a sender and a receiver

• A sender has a meaning in mind and encodes this meaning

into a message that is transmitted to a receiver

• A receiver provides information about how the message was

received and by becoming a sender and responding to,
building on, or rebutting the original message (processes
referred to as “feedback”)
DISTORTION IN COMMUNICATION
1. Senders and receivers (individual communicators)
• The more diverse their goals or the more antagonistic they are
in their relationship, the greater the likelihood that distortions and
errors in communication will occur

2. Messages
• The symbolic forms by which information is communicated
• The more we use symbolic communication, the more likely the
symbols may not accurately communicate the meaning we intend
DISTORTION IN COMMUNICATION
3. Encoding
• The process by which messages are put into symbolic form
• Senders are likely to encode messages in a form which receivers
may not prefer

4. Channels and media

• The conduits by which messages are carried from one party to
another
• Messages are subject to distortion from channel noise or various
forms of interference
DISTORTION IN COMMUNICATION
5. Reception
• The process of comprehension by receiving messages and decoding them
into an understandable form
• It might not be possible to capture fully the other’s meaning, tone or words

6. Interpretation
• Process of ascertaining the meaning and significance of decoded messages
for the situation to go forward
• An important way to avoid problems is by giving the other party feedback
DISTORTION IN COMMUNICATION

7. Feedback
• The process by which the receiver reacts to the sender’s
message
• Can be used strategically to induce concessions, changes in
strategy, or alter assessments of process and outcomes
• Absence of feedback can contribute to significant distortions
by influencing the offers negotiators make
WHAT IS COMMUNICATED
DURING NEGOTIATION?
• Offers, counteroffers, and motives

• Information about alternatives

• Information about outcomes

• Social accounts
 Explanations of mitigating circumstances

 Explanations of exonerating circumstances

 Reframing explanations

• Communication about process

COMMUNICATION IN NEGOTIATION:
THREE KEY QUESTIONS
• Are negotiators consistent or adaptive?
• Many negotiators prefer sticking with the familiar rather than venturing
into improvisation

• Does it matter what is said early in the process?

• What negotiators do in the first half of the process has a significant impact
on their ability to generate integrative solutions with high joint gains

• Is more information always better?

• The effect of exchanging information depends on the type of issues being
discussed and the motivation to use the information
HOW PEOPLE COMMUNICATE IN NEGOTIATION

• Use of language
• Logical level (proposals, offers)
• Pragmatic level (semantics, syntax, style)

• Use of nonverbal communication

• Making eye contact
• Adjusting body position
• Nonverbally encouraging or discouraging what the other says
 HOW PEOPLE COMMUNICATE IN NEGOTIATION

• Selection of a communication channel

• Communication is experienced differently when it occurs through
different channels
• People negotiate through a variety of communication media – by
phone, in writing and increasingly through electronic channels or virtual
negotiations
• Social bandwith distinguishes one communication channel from
another.
•  the ability of a channel to carry and convey subtle social cues from
sender to receiver.
FOUR BIASES THAT THREATEN E-MAIL
NEGOTIATIONS

1. Temporal synchrony bias

• Tendency for negotiators to behave as if they are in a synchronous situation
when they are not

2. Burned bridge bias

• Tendency to do risky things during e-mail that would not be used in a face-to-
face encounter

3. Squeaky wheel bias

• Tendency to use a negative emotional style

4. Sinister attribution bias

• Overlooking the role of situational factors
 HOW TO IMPROVE
COMMUNICATION IN NEGOTIATION

• Use of questions: two basic categories

• Manageable questions
• Cause attention or prepare the other person’s thinking for
further questions: “May I ask you a question?”
• Getting information: “How much will this cost?”
• Generating thoughts: “Do you have any suggestions for
improving this?”
 HOW TO IMPROVE
COMMUNICATION IN NEGOTIATION

• Use of questions: two basic categories

• Unmanageable questions
• Cause difficulty “Where did you get that dumb idea?”
• Give information “Didn’t you know we couldn’t afford this?”
• Bring the discussion to a false conclusion “Don’t you think
we have talked about this enough?”
HOW TO IMPROVE
COMMUNICATION IN NEGOTIATION

• Listening: three major forms

1. Passive listening: Receiving the message while providing
no feedback to the sender
2. Acknowledgment: Receivers nod their heads, maintain eye
contact, or interject responses
3. Active listening: Receivers restate or paraphrase the
sender’s message in their own language
 HOW TO IMPROVE
COMMUNICATION IN NEGOTIATION
• Role reversal
• Negotiators understand the other party’s positions by actively
arguing these positions until the other party is convinced that he
or she is understood
• Impact and success of the role-reversal technique
1. Effective in producing cognitive changes and attitude changes
2. When the positions are compatible, likely to produce acceptable results;
when the positions are incompatible, may inhibit positive change

3. Not necessarily effective overall as a means of inducing agreement

between parties
SPECIAL COMMUNICATION
CONSIDERATIONS AT THE CLOSE OF
NEGOTIATIONS
• Avoiding fatal mistakes
• Keeping track of what you expect to happen

• Systematically guarding yourself against self-serving expectations

• Reviewing the lessons from feedback for similar decisions in the

future

• Achieving closure
• Avoid surrendering important information needlessly

• Refrain from making “dumb remarks”

Thank you
Nguyễn Công Hòa (MBA)
Mobile: 0949.288.786
Email: hoanc@[Link]