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Psychological Phenomena in Negotiation By James R. Coben Director, Dispute Resolution Institute Hamline University School of Law

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Presentation on theme: "Psychological Phenomena in Negotiation By James R. Coben Director, Dispute Resolution Institute Hamline University School of Law"— Presentation transcript:

1 Psychological Phenomena in Negotiation By James R. Coben Director, Dispute Resolution Institute Hamline University School of Law

2 Failure in Negotiations Obvious  The Inability to Reach Agreement BUT ALSO Unnecessarily high transaction costs Sub-optimal results

3 Competitive Bargaining Tactics  high initial demand  limited disclosure of information  few and small concessions  threats and arguments  false demands  commitment to positions  limited authority ploys

4 Primary Barriers to Settlement in Unassisted Negotiation  Strategic  Cognitive  Principal/Agent Problems  Reactive Devaluation

5 The Strategic Barrier Incentive to hide or actively mislead negotiating partner about critical information in order to claim value Rational behavior BUT likely to result in informational poverty and unreliability

6 Reactive Devaluation We devalue an offer PRECISELY because it comes from the other side

7 Cognitive Barriers Human beings are “hard wired” to distort information in the process of assimilating it It is “natural” for negotiators to act “irrationally”

8 Principal/Agent Barrier Agency Benefits Knowledge Resources Skills Strategic Advantages Agency Costs Different Preferences Different Incentives Different Information

9 The Psychology of Persuasion Weapons of Influence: Reciprocation Commitment and Consistency Social Proof Liking Authority Scarcity Robert B. Cialdini, The Psychology of Influence (Quill 1993)


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