The Emerging Art of Negotiation

A negotiation is rarely open-and-shut, but research is starting to reveal a number of ways that this complicated and often-volatile process might go a lot better for all concerned. HBS Professor Kathleen L. Valley, HBS Senior Research Fellow Max H. Bazerman and two colleagues point the way toward a new understanding of the psychology of negotiation.
It's easy to come up with a recipe for disaster when the subject is negotiation. As in chess, once you sit down at the table every move counts. So many factors compete to undermine an optimal settlement: the emotions of both participants; the potential for misunderstanding what could be gained (or lost); differing interpretations of what constitutes fair play.
Be it a straightforward business transaction, a divorce or an international struggle to reach a peace agreement, there's much that can go wrong.
But there's also much that can go right—or at least go better for all concerned.
Ongoing psychological research points toward new directions in the understanding of what makes a negotiation work or not work. In an article recently published in the Annual Review of Psychology, HBS Professor Kathleen L. Valley, HBS Senior Research Fellow Max H. Bazerman and their colleagues Jared R. Curhan and Don A. Moore (doctoral students at Stanford and Northwestern respectively) synthesized groundbreaking negotiation studies to date, and pinpointed five emerging areas of research which they consider critical for the future.
The psychological study of negotiation has undergone tremendous shifts in perspective over the last 30 years, they write, with these changes often occurring in tandem with broader developments in psychology and in society as a whole. Most recently, analysis has begun to look at social or personal factors against a backdrop of "rational" (or optimal) ones. While Bazerman and Valley and their colleagues herald the developments in negotiation studies, they also believe that the five emerging areas will enable researchers to comprehend—most importantly—how negotiators themselves define and create the game, both psychologically and structurally.
Learning how negotiators define the game, the group writes, "may be key to better understanding why parties do not reach agreements when we think they should."
Preconceptions Count
No one goes into a negotiation completely blind. Almost everyone who walks into a negotiation already holds a fairly strong preconception of how they expect it to go down. How such preconceptions, or what researchers call "mental models," actually control the outcome of a negotiation is one of the important new areas of investigation.
Mental models, they have found, encompass a variety of interlocking elements. These elements can include how each person understands himself or herself; how they understand their relationship with the other person as well as that person's characteristics; and what they perceive and know about the bargaining process and structure.
One area of new research into mental models is looking into how the framing of a negotiation can change the game. In one experiment, for example, it was shown that the amount of cooperation among participants was affected far more by what the game was called—whether the participants were told it was a "Community Game" or a "Wall Street Game"—than by the individual dispositions of the participants.
"Simply changing the name of the game changed the mental models the parties brought to the situation, and with it their definitions of what was acceptable or appropriate behavior," the group writes.
Other studies examine what are known as "shared mental models." In these studies, researchers analyze how the interaction between negotiators, springing from the negotiators' beliefs and preconceptions, can actually alter the game and fix its outcome.
"Ethical" Behavior
Varying interpretations of ethical standards are also tightly linked with how negotiators understand and define the game. Laboratory research on ethics in negotiation is starting to reveal, for instance, just how flexible and ambiguous such "standards" can be.
Different motivations and incentives all weigh in to alter negotiators' interpretations of ethical standards. Researchers are also discovering that people tend to see themselves as more ethical than the next person, and often justify ethically questionable behavior as self-defense. Negotiators have a hard time compromising on issues that are sacred to them, and may regard the negotiation itself as immoral. On the flip side, negotiators who declare that a topic is "sacred" and off-limits for discussion—when in fact it is not—can place unnecessary constraints on the game and on their ability to reach compromise.