Negotiation Biases

In this weeks blog I will be talking about biases in negotiation. Biases prevent us from acting rationally and getting as much as we can out of a negotiation. There are two main terms I can relate to involving negotiation biases. First being, "negotiators tend to assume that their gain must come at the expense of the other party and thereby miss opportunities for mutually beneficial trade-offs between the parties." Secondly, "negotiators judgments tend to be anchored upon irrelevant information, such as an initial offer."

I believe these are very common biases in negotiations and can relate to them using past negotiations done in class. For example, for the first biases relating to not finding the log rolling issues and being involved in more of a competitive negotiation can be shown through the "Bakery-Florist-Grocery-Negotiation." We each had our own goal, and wanted the most personal value out of the negotiation. We took a competitive route towards negotiating where we only cared about our personal outcomes and not the mutual benefit of the future partnership. With two parties gaining the most output and leaving the other party to diminish, ended up hurting every party in the long run. Since we didn't identify the log rolling issues, we missed out on maximizing our wealth collectively and could have created more value instead of reach the most individual value.

Lastly, when negotiators tend to be anchored by an initial offer is a biases that is used in majority of negotiations. This anchoring tactic is a great to use because you are making an irrational first offer that the other party will most likely not agree with, but will be biased to that offer and be fixated on that offer. Therefore, believing that your reservation point or BATNA is close to that original offer. Majority of the time, the negotiator using the anchoring tactic will receive a better settlement based off this anchoring bias.