The Curse of Knowledge

By — on / Daily, Negotiation Skills

Adapted from “When You Assume Too Much,” first published in the Negotiation newsletter.

Decision makers often overlook others’ viewpoints. When we do take others’ thinking into account, we tend to assume that they know as much as we do. For this reason, marketing experts are generally worse than nonexpert consumers at predicting the beliefs, values, and tastes of consumers. Similarly, individuals who correctly solve a problem overestimate the percentage of their peers who will be just as successful solving the same problem.

Researchers Colin L. Camerer, George Loewenstein, and Martin Weber have shown that once people know something, they assume that others without access to this knowledge will nonetheless behave as if they share the privileged information. This phenomenon has been labeled the curse of knowledge. Whenever you approach a negotiation as an expert, it’s important to take a step back and consider how a novice might see things.

On a related note, have you ever been certain that you shared some juicy tidbit with someone, only to be told later that you never passed it along? It’s likely you sent along a piece of ambiguous information, expecting it to be fully understood. Confused, the other side simply ignored your message. Boaz Keysar and his colleagues’ research on illusory transparency suggests that negotiators assume that the ambiguous information they share will be accurately understood, even when they have no reason to believe that it could be.

When negotiation partners think they’re giving out more than they’re getting back, they’re likely to get frustrated. Whenever you share a piece of information, pause to make sure that the other party understands you. And when someone complains that you ignored her generous offer, recognize that perhaps you simply didn’t understand it.

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