Negotiation Psychology & Cognitive Biases Flashcards

In negotiation, the scarcity principle is most effectively applied by:

Answer: Creating or emphasizing limited availability of an offer, resource, or opportunity to increase its perceived value

The scarcity principle holds that people assign greater value to opportunities perceived as rare or diminishing, making 'limited time offers' and capacity constraints powerful persuasive tools.

Authority bias in negotiation refers to the tendency to:

Answer: Yield to the demands of someone perceived as an expert or in a position of power, even without verifying their claims

Authority bias causes negotiators to over-comply with requests from perceived experts or authority figures, sometimes making unnecessary concessions to someone simply because of their title or credentials.

A skilled negotiator counters the consistency/commitment bias in the other party by:

Answer: Getting the counterpart to make small public commitments early that align with the desired final outcome

Securing small, incremental commitments leverages the consistency bias — once someone has committed publicly or in writing to a position or principle, they feel compelled to act consistently with that commitment.

Social proof as a persuasion principle in negotiation is best illustrated by which tactic?

Answer: Demonstrating that many other buyers or sellers have accepted similar terms

Social proof exploits the tendency to look to others' behavior as a guide for our own — showing that peers or comparable parties accepted similar terms reduces the counterpart's psychological resistance.

Hindsight bias poses a particular risk in post-negotiation analysis because it causes negotiators to:

Answer: Believe that the eventual outcome was predictable all along, preventing accurate learning from mistakes

Hindsight bias distorts post-negotiation learning because once we know the outcome, we retrospectively believe it was inevitable, preventing honest assessment of what tactics actually worked or failed.

The fundamental attribution error, when applied to negotiation, most commonly causes negotiators to:

Answer: Overattribute the counterpart's behavior to their fixed character or personality while underattributing it to situational pressures

The fundamental attribution error leads negotiators to see the counterpart's behavior as a reflection of their character (e.g., 'they are greedy') while ignoring the situational constraints the counterpart faces.

The negotiator's dilemma describes the tension between which two competing impulses?

Answer: The impulse to share information to create value versus the impulse to withhold information to claim value

The negotiator's dilemma is the core tension between being open (which enables integrative value creation) and being strategic (which is necessary to claim a fair share of that value).