The Handbook of Conflict Resolution (3rd ed)
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aI thank Morton Deutsch for helpful comments on an earlier version of this chapter.
PART TWO
INTRAPSYCHIC AND INTRAGROUP PROCESSES
CHAPTER ELEVEN
JUDGMENTAL BIASES IN CONFLICT RESOLUTION AND HOW TO OVERCOME THEM
Leigh L. Thompson and Brian J. Lucas
A common misconception that negotiators and dispute resolution professionals hold is that conflict escalation, stalemates, impasses, and lose-lose agreements are exclusively driven by intransigence and self-interested motivation. Whereas self-interest and competitive motivations interfere with productive conflict resolution, many seemingly benign beliefs and cognitions also thwart effective conflict resolution but often go undetected. Unfortunately, these beliefs are not easily corrected during the process of conflict resolution itself because it is difficult for negotiators to monitor them. Furthermore, third-party intervention is no guarantee that erroneous beliefs and cognitions will be adequately identified and eliminated. In fact, the mere presence of a third party may exaggerate the tendency of these faulty and erroneous beliefs to disturb the otherwise effective resolution of conflict. Indeed, third parties and other self-proclaimed neutrals often fall prey to similar cognitive bias (Gibson, Thompson, and Bazerman, 1994).
We argue in this chapter that detecting and challenging negotiator biases can do much to resolve disputes and conflicts of interest. Unfortunately, most negotiators are not aware of the existence of cognitive biases and their deleterious effects. In the first section, we introduce three types of bias that occur over the time course of negotiation: biases of cognition, biases of process and the dance of negotiation, and biases with regard to allocation and outcomes. In the second section, we consider the implications of bias for negotiation. Finally, we examine methods for eliminating or reducing cognitive bias at the bargaining table, and in so doing, we consider naturally occurring social-contextual factors that affect bias as well as structured intervention.
BIAS: A DEFINITION
The tendency to use shortcuts, or heuristics, when we process information is an extremely cost-effective strategy, and much of the time, heuristic processing provides us with accurate information. It may seem peculiar to argue that heuristics—cognitive shortcuts—are cost-effective, given that they lead to biases and hinder effective conflict resolution; however, our point is that much of the time, these shortcuts may be effective when used in nonconflict situations because they can lead to an answer or solution that is acceptable and efficient (see Bazerman and Moore, 2013). For example, in forming an impression of a new next-door neighbor, one could do an extensive search (interviewing friends and relatives, perhaps even hiring a private investigator), or one could simply rely on a first impression. Whereas the former strategy is costly and time-consuming, the second strategy is simple and, in nonconflict situations, typically adequate. Indeed, people’s judgments of others’ likability, personality, sexual orientation, performance as teachers, socioeconomic status, psychopathology, and a host of other predictions can be evaluated within seconds (Ambady and Rosenthal, 1992, 1993; Johnson, Gill, Reichman, and Tassinary, 2007; Krause, Piff, and Keltner, 2009; Fowler, Lilienfeld, and Patrick, 2009). Thin slices of behavior reveal that people pay attention to key cues when forming judgments (Carney, Colvin, and Hall, 2007).
In competitive encounters such as negotiation, the heuristic-based judgments we make are often wrong. Furthermore, the nature of our errors is not random but instead systematic. For the purposes of this discussion, we focus on systematic error and patterned fallacy; these are known as cognitive biases. Biases come in many forms and shapes. For instance, people can be biased about other people, as when they use stereotypes (someone might perceive all New Yorkers as pushy). People can also be biased about situations (the gambler’s fallacy—having lost so many times in a row that he or she is due to win; Tversky and Kahneman, 1974). Paradoxically, people can also be biased about themselves (the vast majority of people judge themselves to be above average on many positive characteristics and abilities, even though it is logically impossible for most people to be above average). Many biases can affect decision makers in many contexts, for example, confirmation bias (Einhorn and Hogarth, 1978). We do not purport to present and discuss a large list of biases and do not intend to discuss all documented negotiation-related biases (Malhotra and Bazerman, 2007; Bazerman and Moore, 2013; Thompson, 2012). Rather, this chapter focuses on three key aspects of negotiation: (1) biases of cognition, which include anchoring, framing, and decision fatigue; (2) biases of the process of negotiation, which include the fixed-pie perception, exaggeration of conflict, biased punctuation of conflict, and the illusion of transparency; and (3) biases of outcome and allocation, which include egocentric allocations and judgments of fairness, and reactive devaluation with regard to proposed solutions.
Biases of Cognition
In this section, we discuss biases that are often the first to emerge when negotiators are at the bargaining table. In some cases, these biases can be triggered before the negotiation even begins. For example people are much more cooperative in a prisoner’s dilemma game when the game is described as the “community game” versus when it is described as the “Wall Street game” (Liberman, Samuels, and Ross, 2004). Students taking economic courses play the same game more competitively than do students taking humanities courses (Frank, Gilovich, and Regan, 1993). And the mere presence of business-related objects, such as briefcases and business suits, leads people to behave more competitively in social encounters and economic games (Kay, Wheeler, Bargh, and Ross, 2004).
Anchoring.
Anchoring is a bias that occurs when a salient reference point—an anchor—influences the range and diversity of people’s thoughts and ideas (Tversky and Kahneman, 1974). It affects judgment because people do not sufficiently adjust away from the anchor (Epley and Gilovich, 2001). For example, if asked, “In what year was George Washington elected president?” most Americans who do not know the correct answer will anchor on the year 1776 (the year America declared independence) and give an estimate somewhere in the late 1770s, failing to sufficiently adjust away from the anchor (the correct answer is 1788).
Anchoring can bias judgments at every stage of the negotiation and conflict resolution process. For example, Northcraft and Neale (1987) surveyed real estate brokers who claimed they could assess the value of a property to within 5 percent of the true or appraised value. In their study, professional brokers as well as naive students were given a ten-page packet about a house for sale and asked to determine its value. Both the brokers and the students were affected by the list price of the house, which served as a powerful anchor, yet brokers denied using list price in their appraisal decision. Ritov (1996) found that extremely subtle shifts in how negotiators look at information can have a large impact on final outcomes. For example, buyers and sellers in a simulation viewed possible agreements in order that moved from best for the buyer to best for the seller; in all instances, the first possib
le agreement served as a powerful anchor.
The anchoring bias amplifies the importance of first offers and issue timing. Another investigation found that in both e-mail and face-to-face negotiations, those who made first offers in distributive negotiations claimed more total value (Galinsky and Mussweiler, 2001). Presumably the first offers acted as anchors from which the negotiating party was unable to sufficiently adjust. Anchoring can also affect the overall joint value of negotiated agreements. For example, in multi-issue negotiations with integrative potential, negotiators may anchor on one issue. The first issue chosen for discussion may influence the way the remaining issues are discussed and ultimately negotiated. For example, consider a negotiation with a supplier in which cost-efficiency and product quality are both important issues. Discussing cost-efficiency first may anchor the subsequent discussion of product quality on costs and benefits, reducing the focus on product quality.
Framing.
Another cognitive bias that influences negotiation and conflict resolution is framing, which refers to the way in which a situation or decision is subjectively construed as a loss or a gain (Tversky and Kahneman, 1981). According to Tversky and Kahneman, almost any decision can be reframed as a gain or a loss relative to something. Thus, decision makers’ reference points for defining gain and loss are often arbitrary. When outcomes are framed positively, as a gain, people tend to exhibit risk aversion, preferring a sure outcome over a risky gamble. However, when outcomes are framed negatively, as a loss, people become risk seeking, preferring risky gambles over sure outcomes.
How might framing bias negotiation and conflict resolution outcomes? In an initial experimental investigation of gain and loss framing on negotiation outcomes, Neale and Bazerman (1985) manipulated the framing of a contract negotiation between participants assigned to the role of a management or a union leader. Participants were much more likely to reach a negotiated settlement when concessions were framed as overall gains for the company than when they were framed as losses. When concessions were framed as losses, participants were more likely to opt for arbitration, a riskier outcome that often leads to impasse. If one negotiator has a negative (loss) frame and the other a positive (gain) frame, the negotiator with the negative frame reaps a greater share of the resources (Bottom and Studt, 1993).
Framing also affects behavior and outcomes across a series of negotiations. Negotiators who have recently experienced a string of failures are more likely to adopt a loss frame in a negotiation; conversely, negotiators who have experienced a string of success feel greater control (Kray, Paddock, and Galinsky, 2008). Loss-framed negotiators are reluctant to reveal information that could potentially be used to exploit them. In an investigation of ultimatum games, in which player 1 receives an endowment and decides how to allocate it between herself and player 2, player 2 is likely to accept unfair allocations when player 1’s actions are framed as “claiming” rather than “dividing” resources (Blount and Larrick, 2000).
Decision Fatigue.
Decision making and negotiation can be tiring. Indeed, negotiators often view negotiations as stressful, and those who perceive it in this way are particularly vulnerable to low-quality outcomes and faulty perceptions (O’Connor, Arnold, and Maurizio, 2010). Moreover, making decisions can lead to mental fatigue and reduce people’s ability to effectively make subsequent choices (Vohs et al., 2008). Making decisions reduces the effectiveness of subsequent decision making in a number of domains, ranging from simple consumer product choices (Bruyneel, Dewitte, Vohs, and Warlop, 2006) to complex judicial sentencing decisions (Danziger, Levav, and Avnaim-Pesso, 2011).
Negotiations and attempts at conflict resolution often involve multiple issues, parties, and rounds. In short, they can be long and tiring. Two aspects of negotiations can exacerbate decision fatigue: duration and information complexity. Duration, or the time course of a negotiation, is an important determinant of decision fatigue. Over the time course of a negotiation, it is increasingly likely that decision fatigue will bias subsequent decisions and outcomes. Early research documented the effects of duration on negotiation behavior. One study found that as a negotiation progressed, people tended to engage in fewer cognitively demanding activities, such as making high demands of their opponents and bluffing (Pruitt and Drews, 1969). Another determinant of decision fatigue is information complexity. As the number of issues and constituents in a negotiation increases, so does the number of possible negotiated agreements. Research on the psychology of choice suggests that as choice sets become larger, people exhibit a preference for simplicity (Iyengar and Kamenica, 2010) or prefer not to make a decision at all (Iyengar and Lepper, 2000). In complex and multiround negotiations, the search for simple solutions may bias a fatigued negotiator’s judgment and result in capitulating on important issues or, alternatively, leaving the negotiation table altogether. In sum, decision fatigue is a prominent source of bias in negotiations and conflict resolution. It can lead to less strategic pursuit of desired outcomes and a preference for simplified decisions.
Fixed-Pie Perception
In very general terms, people in negotiation and conflict situations tend to assume that the degree of opposition between themselves and other parties is greater than it actually is. A classic root cause of most ill-fated negotiations is the fixed-pie perception: the belief that the other party’s gain comes at our expense and our gain at theirs (Bazerman and Neale, 1992; Thompson and Hastie, 1990). The fixed-pie perception simply means that most negotiators work under the assumption that the other party’s gain is one’s own loss, and vice versa. In one investigation, for example, more than two-thirds of the negotiators assumed that the amount of available resources was fixed, even though this was not the case (Thompson and Hastie, 1990).
A close cousin of the fixed-pie perception is the lose-lose outcome (Thompson and Hrebec, 1996). The possibility of lose-lose negotiations often goes unchecked, because most people tend to view the opposite of win-win as win-lose; however, lose-lose negotiations do exist (Thompson and Hrebec, 1996). They occur if both parties settle for something that both prefer less than what they can readily have. Consider the following lose-lose situations:
Two countries have been in conflict for decades. Each would benefit from peaceful coexistence, but their attempts at peace talks never achieve substantive progress, and the conflict rages on.
The management and labor representatives for a local industry embroiled in contract-renewal talks both realize that if the union goes on strike, company owners and union membership alike will suffer. But they do not reach an agreement by the time the contract expires.
Given the ubiquity of the fixed-pie perception and its deleterious effects on negotiation, a great deal of research has examined how to minimize it. To the extent that negotiators share their interests and priorities and learn those of the other party, the fixed-pie perception can be dramatically reduced (Thompson, 1991). Another key way to combat this perception is to engage in perspective taking, or put oneself in the other negotiator’s shoes. Perspective taking leads negotiators to construe the other party in a less competitive light (Neale and Bazerman, 1982) and increases the likelihood of using integrative bargaining tactics such as logrolling (Trötschel, Hüffmeier, Loschelder, Schwartz, and Gollwitzer, 2011). Perspective taking is distinctly more effective than is empathy when it comes to crafting integrative agreements (Galinsky, Maddux, Gilin, and White, 2008). Moreover, negotiators who behaviorally mimic their negotiation opponents are more likely to make accurate judgments and reach mutually beneficial agreements as compared to negotiators who do not mimic their opponents (Maddux, Mullen, and Galinsky, 2008).
Biases of Process and the Dance of Negotiation
In this section, we discuss biases that emerge during the process of negotiation, particularly as the sequence of offers and counteroffers occurs. Specifically, we discuss the exaggeration of conflict, the biased punctuation of conflict, and the illusion of transparency.
Exaggeration of
Conflict.
People involved in social or political conflict tend to overestimate the extremity of the other side’s beliefs. Consider the reactions to the real-life conflict commonly referred to as the Howard Beach incident, in which a young black man, Michael Griffith, was struck and killed by a passing car as he attempted to escape a group of white pursuers in the Howard Beach neighborhood of Queens in New York City. In one study, people who characterized themselves as liberals or conservatives were asked to rate the extent to which they believed in the truth of certain statements about the case (“The white pursuers deliberately chased Michael Griffith into the path of oncoming traffic”; “Michael Griffith had consumed cocaine on the night in question”; Robinson, Keltner, Ward, and Ross, 1995).
The same people were then asked to predict how “the other side” would rate the truth of the same statements. That is, conservatives were asked to predict liberals’ ratings for each question, as were liberals asked to predict conservatives’ ratings. Both liberals and conservatives overestimated the difference between their side and the other. Liberals overestimated the extent to which conservatives believed in the truth of statements favoring the white perpetrators; conservatives overestimated the extent to which liberals believed in the truth of statements favoring the black victim. Thus, the partisans in this case believed that the distance between their positions was greater than it really was.
Perhaps most surprising, neutrals (people who described themselves as neither liberal nor conservative) also succumbed to this mistake; they too overestimated the gap between liberals’ and conservatives’ beliefs about the Howard Beach incident. All three groups (liberals, conservatives, and neutrals) exaggerated the extent of conflict: all three groups overestimated the extent to which conservatives would interpret the events in ways that blamed the black victim and the extent to which liberals would interpret events in ways that favored the black victim.