Reading: Mental errors: How to recognize and avoid them

Mental errors: How to recognize and avoid them

This chapter presents the various mental errors committed by the parties during the negotiation. According to the article, 5 kinds of mental errors can be bringing forward:

The first one is the escalation. This kind of error occur when calm businessman entered in a difficult and competitive negotiation, it is also called “over commitment”. For the authors, there is 3 possible reasons explaining why wise businesspeople make this error:

-       Because negotiator never want to lose a deal especially when it is highly visible; therefore, they are ready to make very unreasonable measures.

-       Within the framework of auctions and bidding contest where people are pit against each other, which encourage irrational behaviour.

-       When businesspeople use the other people’s money to win beyond the point of rationality.

To correct the situation, it is necessary to control the alternatives of the deal before the negotiation keeping in mind that money spend in overpriced deal can be invested in other compromises. Negotiators must be very objective and observational where they are fixing the walk-away price and defined clear breakpoint to stop the negotiation when they have reached the walk-away price. However external factor can affect this price, so negotiators need to be open to recalculate it.

The second one is partisan perceptions defined as a psychological phenomenon that causes people to have different views of the world according to their point of view. To avoid partisan perceptions, negotiator should know how to stand outside a situation by recognizing it, putting themselves in the other side’s position, asking the opinions of their colleagues, posing the problem as it appear to themselves or using a hypothetical situation. They also can reverse the role with the other party.

The third one is irrational expectations. In this scenario, the expectations of one side cannot be meet which remove any zone of possible agreement (ZOPA). To overcome this problem both side may have an educating dialogue where people are listening to the expectations of each, and the negotiator should give more information to increase the reservation price of the opposite party.

The fourth mental error is overconfidence. When businesspeople overestimate their strengths and underestimate those of our rivals they can lose a deal. It can also be related to another mental error called “groupthink”. This error appears when businesspeople are part of a cohesive group thinking around a norm. People are driven by social psychological pressures and reject any opposite views. For the authors groupthink are characterized by an illusion of invulnerability and certitude, people accept only certificated data and alternatives are not taken into account. Any form of external opinion or view is directly denied.

Finally, the last mental error is unchecked emotions. Bad things appear when the businesspeople lose the control of their emotions and that the negotiation start to be running by anger. In that situation, people stop thinking in logical or rational way. The only goal of the deal become damaging the other side, affecting negatively its own interests at the same time. Big injuries occur when negotiator get their feelings out of control. To resolve this situation, a period of reflexion is necessary and an objective moderator can be called to moderate the communication.