Consequences of Egocentrism in Negotiation

A number of researchers have used egocentric interpretations of fairness to explain the vexing problem of impasse in negotiation (Babcock & Loewenstein, 1997; Babcock et al., 1995; Babcock & Olson, 1992; de Dreu, Nauta, & van de Vliert, 1995; Thompson & Loewenstein, 1992). Evidence on egocentrism can help account for why disputants pay the high costs of strikes, ligitation, delay, stalemate, and deadlock, despite strong incentives to reach agreement. If both parties seek a fair outcome, yet their self-serving interpretations of fairness are incommensurable, the ironic result is that negotiators may impasse despite a positive bargaining zone and motivation to be fair (Babcock & Loewenstein, 1997; Drolet, Larric, & Morris, 1998; Thompson & Loewenstein, 1992).

There are two ways to understand how this clash could result in impasse. First, self-serving interpretations of fairness may result in an equitable agreement being perceived as unfair and exploitative. Perceptions of exploitation by another party may give rise to a desire for vengeance. The resulting motivation to punish the opponent for unfair behavior can lead to rejection of otherwise profitable agreements. This motive can be seen most clearly in ultimatum bargaining experiments where recipients reject profitable offers they perceive to be unfair (Ochs & Roth, 1989; Pillutla & Murnighan, 1996). Blount (1995) has shown that uneven allocations are more likely to be accepted when they are simply uneven (generated by a random device) than when they are unfair (generated by a person who benefits from the unevenness).

A second, simpler way to understand how egocentrism leads to impasse is to assume that negotiators have a utility for fairness – that they would prefer a moderately profitable, but equal, alternative to a highly profitable alternative involving inequality that favors the other side. Data supporting this point of view come from work on social utility (Loewenstein et al., 1989; Messick & Sentis, 1985) – people care very much about how their outcomes compare with others’ and they display a powerful disutility for disadvantageous inequality (Neale & Bazerman, 1991). In negotiation, social utility may be magnified because negotiator aspirations tend to mirror their fairness judgments (Drolet et al., 1998). In this way, egocentric interpretations of fairness can lead to unrealistic aspirations, which in turn are likely to increase contentious behavior and delay settlement. De Dreu, Nauta, and van de Vliert (1995) offered correlational evidence from actual negotiations, suggesting that egocentric evaluations are associated with escalation of conflict. The cumulative result of these effects is that impasses exact high costs from individuals, businesses, and societies (Pruitt, Rubin, & Kim, 1994).

 

The practical question is, how can egocentrism be reduced? Bazerman and Neale (1982) were able to successfully debias negotiators by providing them with facts about overconfidence and egocentrism in negotiation. Thus, negotiators may inoculate themselves against egocentric biases by learning about their dangers. While some have argued that egocentrism may help negotiators claim value, we advise negotiators to strive to obtain the most accurate perceptions possible. One may certainly choose a contentious strategy or an extreme bargaining position, but negotiators are best prepared when they have the best information. Critics of research on egocentrism have argued that these effects are likely to be exaggerated in a laboratory situation with minimal context and naive negotiators. However, others have found the familiar pattern of self-serving biases and egocentrism in real conflicts involving experienced professionals (Babcock & Olson, 1992; Babcock, Wang, & Loewenstein, 1996), including professional negotiators (de Breu, Nauta, & van de Vliert 1995). Indeed, evidence suggests that the more a partisan is involved in and cares about a dispute, the more biased he or she is likely to be (Thompson, 1995).

(Source: Brewer, Marilynn B. & Hewstone, Miles. 2004. Applied Social Psychology. UK: Blackwell Publishing Ltd. pg. 279-280)

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