Negotiation is not an easy process, especially for people who struggle with conflict. Since negotiations are all about conflict resolution, it is important to enter into the discussion with the right frame of mind so you can reach an amicable agreement. Many people enter negotiations with preconceived notions, which can contribute to mistakes, misunderstandings, and unsuccessful negotiations. If you walk into a negotiation expecting to be offered a bad deal, for example, it will automatically impact the way you approach the conversation. These psychological barriers are often subconscious biases that prevent us from being able to negotiate effectively. Here we will take a look at some of the most common psychological barriers and how you can overcome them.
The Endowment Effect
The first barrier that is commonly associated with negotiation is the endowment effect. This is the idea that whatever you have is worth more because it’s yours. When something is in our possession, we tend to place a higher value on it than what it’s actually worth simply because we own it. It is a subjective opinion, not based on objective reality or consideration of how someone else might value it. Think of when you are having a yard sale for example. You may tend to price items too high because you see them as more valuable than someone else might. You might even be offended when someone offers you a much lower price. The best way to overcome this is by looking at the negotiation objectively. Consider how someone else might perceive the value of what you are offering. You may even want to consult with a neutral third party to get a fair idea of the true value.
Comparative Gains and Equity
How many times have you heard your child yell, “That’s not fair!” You may have even responded with something like, “Life’s not fair.” The fact is, it’s human nature to want everything to be “fair,” but what does “fair” actually look like? Oftentimes in negotiations, proposals are rejected out of a sense of “fairness.” Parties may even perceive the concessions they are receiving to be less valuable than the ones they are giving, which gives the impression that the deal is “unfair.” Instead of looking at everything as equal, consider how the deal benefits you. You may have to give up something of higher value, but if it leads to the results you want, then it is obviously worth it. Approach negotiations with a new mindset, that “fair” does not always mean “equal.” a good deal doesn’t have to be “fair” to be successful.
It’s common for negotiators to attach greater weight to prospective losses than prospective gains. This can make them reluctant to trade concessions. Think back to the yard sale scenario. You may be reluctant to sell that lamp for a lower price because you remember what you paid for it. However, by not selling the lamp, you gain nothing and you will probably end up donating it for free. On the other hand, if you sell it for a lower price, you not only made some money on the deal but you also got the lamp off your hands. Stop focusing so heavily on the “loss” and consider what you will actually be gaining. By shifting your perspective, you begin to see the mutual benefits of the deal.