Investment in your negotiation counterpart: Blinded by Lieke

April 19, 2018

How much effort you or your negotiation counterpart invest in the deal can blind you from objective terms.

Let’s say you are the owner of a fancy coffee shop which is the talk of the town. In your shop, people can drink coffee, but they also can buy coffee beans to brew at home. The current year is ending soon, and you have to decide which coffee brands to put on your shelves. Sales representatives from several coffee roasting houses visit you and one of them, Lieke - a saleswoman from Amsterdam - impressed you with her thorough, well-prepared sales pitch. A couple of days later, she steps into your coffee shop to answer some questions. And she’s catching up with you regularly by phone and by e-mail. Meanwhile, the other salespeople don’t seem to put nearly as much effort into winning your business.

If you think that you would choose the coffee supplier objectively, not influenced by the efforts put into winning your business, research proves you wrong. The researchers Franco-Watkins, Acuff Jr., and Edwards, from Auburn University, and respectively Oklahoma State University, found that, when people negotiated the price of a service that would require effort, the effort (own effort invested in the negotiation or the effort that they perceived others would make) was an important factor in the negotiated price.

Of course it sometimes makes sense to take effort into consideration as a decision-making criterion. But be aware that looking at your own labors, or at impressive signs of effort from your counterpart, can blind you when it comes to the objective terms of a deal.

Resource: “Effort and Fairness in Bargaining Games,” by Ana M. Franco-Watkins, Bryan D. Edwards, and Roy E. Acuff Jr. Journal of Behavioral Decision Making, 2011.

ISMAN & Partner
ISMAN & Partner ist eine Unternehmensberatung, die nationale und internationale Konzerne, mittelständische Betriebe und Start-ups, Organisationen und Institutionen bei komplexen Verhandlungs- und Konfliktlösungsprozessen begleitet. 2015 von Calin-Mihai Isman gegründet, unterstützen die Experten für Negotiation & Mediation Manager und Mitarbeiter aus den Bereichen Sales, Einkauf, M&A, Contracting, HR oder IT.


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