Social comparisons are a critical factor in guiding negotiator satisfaction, Maurice E. Schweitzer of the University of Pennsylvania and Yale psychologist Nathan Novemsky have found in their research. Not only do negotiators compare their profit from a deal with the profit they imagine their counterpart earned, but they also compare their profit with the profits of other negotiators who were in a similar situation. For example, a car buyer is likely not only to assess how much the dealership made off of him but also to compare his price with the deal his neighbor got. If the buyer’s neighbor bought the same model car for a higher price, he is likely to be more satisfied with his purchase than if his neighbor got a better deal.
Social comparisons can drastically skew our perceptions of a particular outcome. Unfortunately, our ability to make comprehensive and accurate social comparisons is limited. We typically compare our own outcomes with those who are close to us—neighbors, coworkers, and family members. In addition, individuals or organizations sometimes actively limit our access to information that could improve the accuracy of our social comparisons; for example, many companies discourage employees from disclosing their salaries to one another. Similarly, your brother-in-law may choose to tell you only about the stocks he purchased that increased in value.
As a negotiator, you need to recognize the limitations you face in developing a complete and accurate social comparison set. In addition, you should seek to guide the comparisons that your counterpart selects. When engaged in labor negotiations, for instance, a management team might highlight recent labor contracts in which other unions received less advantageous terms than the union desires.
Adapted from “Is Your Counterpart Satisfied?” by Maurice E. Schweitzer (professor, University of Pennsylvania), first published in the Negotiation newsletter, April 2006.