[Negotiation] Chapter 5: Perception, Cognition, and Communication

Essentials of Negotiation

Chapter 5

Perception, cognition, and communication are fundamental processes that govern how individuals construct and interpret the interaction that takes place in a negotiation. Reduced to its essence, negotiation is a form of interpersonal communication, which itself is a subset of the broader category of human perception and communication. Perception and cognition are the basic building blocks of all social encounters, including negotiation, in the sense that our social actions are guided by the way we perceive and analyze the other party, the situation, and our own interests and positions.

Negotiators approach each negotiation guided by their perceptions of past situations and current attitudes and behaviors. Perception is the process by which individuals connect to their environment. Perception is a “sense-making” process; people interpret their environment so that they can respond appropriately. In any given negotiation, the perceiver’s own needs, desires, motivations, and personal experiences may create a predisposition about the other party. Such predispositions are most problematic when they lead to biases and errors in perception and subsequent communication.

Stereotyping and halo effects are examples of perceptual distortion by generalization: small amounts of perceptual information are used to draw large conclusions about individuals. Selective perception and projection are, in contrast, examples of perceptual distortion by the anticipation of encountering certain attributes and qualities in another person. Stereotyping is a very common distortion of the perceptual process. Stereotyping occurs when one individual assigns attributes to another solely on the basis of the other’s membership in a particular social and demographic group. Halo effects in perception are similar to stereotypes. Halo effects occur when people generalize about a variety of attributes based on the knowledge of one attribute of an individual and are as common as stereotypes in negotiation. Selective perception occurs when the perceiver singles out certain information that supports or reinforces a prior belief, and filters out information that does not confirm that belief. Projection occurs when people ascribe to others the characteristics or feelings that they possess themselves. People have a need to see themselves as consistent and good.

Another key issue in perception and negotiation is framing. A frame is the subjective mechanism through which people evaluate and make sense out of situations, leading them to pursue or avoid subsequent actions.

Rather than being perfect processors of information, it is quite clear that negotiators have a tendency to make systematic errors when they process information. These errors, collectively labeled cognitive biases, tend to impede negotiator performance; they include the irrational escalation of commitment, the mythical belief that the issues under negotiation are all fixed-pie, the process of anchoring and adjustment in decision making, issue and problem framing, the availability of information, the winner’s curse, negotiators overconfidence, the law of small numbers, self-serving biases, the endowment effect, the tendency to ignore others’ cognitions, and the process of relative devaluation.

Misperceptions and cognitive biases arise automatically and out of conscious awareness as negotiators gather and process information. Negotiators may apply several different frames to the same negotiation. When different negotiators apply different, or mismatched, frames, they will find the bargaining process ambiguous and frustrating. In such situations, it may become necessary to reframe the negotiation systematically, to assist the other party in reframing the negotiation, or to establish a common frame or set of frames within which the negotiation may be conducted more productively. Negotiators can also reframe by trying to perceive or understand the situation in a different way or from a different perspective.

Given the many ways that communication can be disrupted and distorted, we can only marvel at the extent to which negotiators can actually understand each other. Failures and distortions in perception, cognition, and communication are the most dominant contributors to breakdowns and failures in negotiation.

As negotiations come to a close, negotiators must attend to two key aspects of communication and negotiation simultaneously: the avoidance of fatal mistakes and the achievement of satisfactory closure in a constructive manner.