Imagine that you are a purchasing agent who just scored a significant price concession from a supplier. Now it’s time to hang up the phone and move on to another negotiation with a different supplier. You’re feeling proud of how you handled the last negotiation and confident that this next negotiation will go just as well, maybe even better— but will this confidence work in your favor? Perhaps not, according to new research by Virginia Tech professor William J. Becker and Massachusetts Institute of Technology professor Jared R. Curhan.
The carryover effect
Emerging research has found that emotions triggered by a particular situation (whether a negotiation or some other incident) can carry over and affect our decisions in subsequent negotiations and other financial situations.
In one study, for example, participants who were induced to feel angry had difficulty accurately assessing their own interests in a subsequent negotiation as compared with those in a neutral state, Harvard Kennedy School professor Jennifer Lerner and her colleagues found. This was true despite the fact that the participants’ anger was unrelated to the negotiation at hand.
In another study, as compared with participants in a neutral state, those induced to feel sad were willing to pay much more to buy an item, apparently due to a desire to enhance their sense of self, Lerner and her coauthors found.
Interestingly, in both studies, participants insisted, incorrectly, that their unrelated emotions (anger or sadness) did not affect their subsequent financial decisions. It seems we are largely unaware when feelings triggered by one situation—so-called incidental emotions—linger and affect our future decisions.
Purchasing agents, sales representatives, lawyers in certain realms, human resource professionals, and real estate agents often move from one negotiation to the next with little or no break.
Wheeling and dealing
Incidental emotions may be particularly relevant to professionals who engage in frequent negotiations with different individuals and organizations.
In certain businesses and professions, negotiators can spend months hammering out a single deal—a labor contract, a merger between two large companies, the settlement of a class-action lawsuit, and so on. During such prolonged negotiations, counterparts can gain valuable information from one another’s emotions: interpreting anger as a sign to go back to the drawing board, irritation as a motivation to speed things along, and cheerfulness as an indication that talks are on the right track, for example.
But in other jobs and industries, it’s more common for negotiators to deal with one counterpart after another— a phenomenon known as sequential negotiations. Purchasing agents, sales representatives, lawyers in certain realms, human resource professionals, and real estate agents often move from one negotiation to the next with little or no break, for example.
How we feel at the end of one negotiation—a concept known as subjective value—will quite naturally trigger emotions that may spill over and affect our subsequent negotiations with other counterparts.
Pride and overconfidence
In a lab experiment and a field experiment, Becker and Curhan tested this spillover effect.
In their lab experiment, the researchers had undergraduate business students play the role of a buyer or seller in a negotiation simulation four times in a row, each time facing a different counterpart. When participants felt bad after a particular negotiation, they tended to perform better on the negotiation that followed, the results showed. The opposite was also true: the better participants felt after a negotiation, the less effectively they performed in a subsequent negotiation.
In addition, positive feelings among male participants tended to lead to a sense of pride, which in turn led
them to perform worse, rather than better, in a subsequent negotiation. This effect wasn’t found for women; some other, unidentified effect must have explained their results. Pride, which tends to be stronger in men,
may have led men to be inappropriately overconfident in their abilities following a negotiation, to their detriment in the next round.
In their field experiment, Becker and Curhan studied the actual negotiations of employees of a U.S. transportation company for lower rates from various fuel suppliers. The results again showed that participants who felt better as a result of one negotiation performed worse in their next negotiation, and vice versa. In addition, for both men and women, positive feelings triggered a sense of pride, which was linked to worse results in a subsequent negotiation.
Managing incidental emotions
Our emotions can carry over from one negotiation to affect the next, often to our detriment, the results of Becker and Curhan’s study suggest.
The following guidelines can help us manage the effects of such incidental emotions on our negotiations:
- Take breaks between negotiations.
When possible, take time off following a negotiation to let emotions such as pride dissipate, lest they carry over and hinder results in your next negotiation. Moreover, managers should be attuned to the carryover effects of emotion and give their employees flexibility over their negotiation scheduling.
- Pinpoint the emotion’s source.
Research by Norbert Schwarz (University of Southern California) and Gerald Clore (University of Virginia) has found that labeling the source of an incidental emotion lessens its impact on our judgments and decisions. So if you are feeling buoyed by a negotiation victory, remind yourself that your mood was prompted by your most recent performance and is not necessarily relevant to your next negotiation.
- Strive for a humble mindset.
Because pride from one negotiation can have unwanted consequences on our next one, Becker and Curhan recommend that we try to foster a humbler mindset after a success by asking ourselves what we would do differently in the next negotiation.