How psychology can make you a better negotiator

What can help make you a better negotiator? The common advice is to research your opponent and do your homework on what they want to achieve from the negotiations. But it’s also crucial to recognise the psychology behind the bargaining process. 

 

Several studies have shown that the best negotiators know how to build empathy and work with their own emotions. Here’s how it works: 

 

First, it is important to recognise the important role feelings and emotions play at the bargaining table. Research based on the ground-breaking work of Antonio Damasio, a neuroscientist at the University of Southern California, has shown that emotions act like a moral compass, giving people assurance that their choices are right or wrong and allowing them to see the big picture.

 

Embracing emotions is therefore not only an advantage, but a necessity: “Just like star athletes who are ‘in the zone’, [top negotiators] are centered, energised, and resilient in the face of strong feelings. They prepare emotionally as well as substantively for any high-stakes negotiation,” say the authors of a recent Harvard Business Review study Kimberlyn Leary and Julianna Pillemer. 

 

Our mind also uses shortcuts and rules of thumb that, while useful for making quick decisions, often lead to poor choices in negotiations. But knowing about them in advance can prevent us from falling into common mistakes. For example, a classic study by researchers Greg Northcraft and Margaret Neale showed that most people, even experts, tend to anchor their reasoning on a reference point that is often irrelevant. In their study, they asked several estate agents to inspect a house and estimate its value, but deliberately manipulated the price that it was already on the market for. They found that most of the agents had adjusted their valuations based on the fake price.

 

As most people fall prey to this error, you can make it work in your favour during a negotiation: make the first offer, as it establishes a starting point and will influence your opponent’s response.

 

You can also learn from psychology to achieve better results in negotiations with fewer resources. For example, researchers from the University of California, Los Angeles found that, when someone is presented with a deal that highlights a potential gain, the parts of the brain associated with pleasure become active, inducing rewarding sensations similar to those that we get when eating a bar of chocolate or when we are happy. But if you receive an offer in a way that highlights a potential loss, like if your opponent threatens to end the negotiations if you don’t accept, your brain’s ability to imagine pleasure will be supressed, thereby limiting the attractiveness of the proposal, whatever its terms.

 

By changing how a proposal is framed, you can persuade a reluctant party without changing the actual terms of the deal.

 

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