Examples of Negotiation in Business: Using Bias to Your Advantage

Examples of negotiation in business involving the bias effect at the bargaining table

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Articles in Negotiation have highlighted many examples of negotiation in business demonstrating some of the cognitive biases likely to confront negotiators. Work by researchers Russell B. Korobkin of UCLA and Chris P. Guthrie of Vanderbilt University suggests how to turn knowledge of four specific biases into tools of persuasion.

Examples of Negotiation in Business Involving Bias in Negotiations

First, they argue that by effectively anchoring the negotiation with an extreme offer, you will not only influence the negotiation, but also actually change the other side’s beliefs about the nature of an appropriate agreement (see also, anchoring effect in negotiations).

Second, you can try to influence the other side’s judgments through her susceptibility to the availability bias—the tendency to rely on readily available information (see also, information asymmetry in negotiations). By carefully choosing comparisons to the current situation, you can persuade the other party about the appropriate settlement. In a legal context, when defendants can cite similar cases where a judicial award was very small, they sometimes can influence the judge’s or jury’s assessment of the value of the case.


Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.

Third, Korobkin and Guthrie suggest that when trying to reach a negotiated agreement, you should frame the negotiation in terms of potential gains for the other party, or even a win-win situation benefiting both parties. Doing so persuades the other party to become risk averse, or reluctant to forfeit gains, and builds trust at the bargaining table; the other side will be tempted to reduce this risk and demonstrate their trust in you by reaching agreement.

Fourth, the researchers highlight the use of contrast effects as a persuasion tool. For example, rather than making a flat offer of $30,000 to settle a case, a defendant could offer a choice among $30,000 immediately, $10,000 annually for the next three years, or a $30,000 payment to charity. When compared with the other two options, the $30,000 cash offer is likely to appear more attractive than when it is the only offer on the table. A negotiator may very well compare the options offered rather than comparing the $30,000 to the option of holding out for more money.

Overall, Korobkin and Guthrie’s ideas can help you use your knowledge of biases to influence your counterpart’s judgments at the negotiation table.

Related Business Negotiations Article: Knowledge of Biases as an Influencing Tool


Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.

Adapted from “Knowledge of Biases as an Influence Tool,” first published in the Negotiation newsletter.

Originally published November 2014.

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