Psychological tools that you can use in negotiation, which are also
traps that you want to avoid when used by the other side. These tools are especially
important because they are useful in financial and leadership decision making beyond
negotiation. This chapter serves as a checklist to keep handy for use when making all
types of decisions.
As Bazerman and Moore point out, there are two basic types of research on decision
making. One type—prescriptive decision making—focuses on how we should make
decisions. An example is decision tree analysis, which was discussed in Chapter 3. With
this approach, you can clarify your decision making by drawing a picture of the decision
in tree form, assigning probabilities, and calculating expected value.
The other type of research on decision making—descriptive decision making—focuses
on how humans actually make decisions. As noted by Bazerman and Moore, in making
decisions we rely on simple rules of thumb called heuristics. Here is an example, similar
to one in their book. Suppose that your company needs a financial analyst. You have
decided to recruit only at the top ten MBA programs. That is your heuristic.
1. Don’t Assume a Fixed Pie
2. Consider Anchoring When Developing a First-Offer Strategy
3. Avoid Overconfidence
4. Frame Choices to Your Advantage
5. Look Beyond Easily-Available Information
6. Beware of Dollar Auction Traps
7. Encourage Reciprocity
8. Use the Contrast Principle
9. Take a Big-Picture Perspective
Key takeaway. This chapter has provided a checklist of nine tools that you can use or
traps you want to avoid in future negotiations. Keep this checklist handy for use when
making decisions during negotiations and when making other leadership or financial
decisions.
