Social Psychology Insights to

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Social Psychology Insights to Win Your
Settlement Negotiation

• Victoria Pynchon Judicate West Commercial ADR
  Panelist
• Adjunct Professor, Straus Institute for Dispute
  Resolution

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A Few Critical Definitions

• Distributive bargaining
• The parties negotiate over the division of a
  single item -- usually a fixed sum of money
• The negotiation moves toward resolution through a
  series of concessions based on
• Predetermined settlement range
• Based upon a cost-risk analysis
• Interest-based bargaining
• The parties attempt to increase the number of
  items to be negotiated
• By brainstorming interests that can be included
  in negotiation
• And sharing information about their desires and
  needs re those interests
• Position-based bargaining
• Negotiation depends upon strength of legal and
  factual positions
• Often leads to impasse
• THE INFAMOUS ORANGE
• COMMERCIAL EXAMPLES OF INTEREST-BASED BARGAINING

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Cognitive Biases
Why do we care? Because your belief about your
bargaining partners bottom line and his belief
about yours will exert a disproportionate degree
of influence on the deal eventually negotiated.

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• Framing -- Selling your proposal by description
• Anchoring -- Setting the Settlement Range by
  Making the First Offer
• Fundamental Attribution Error Using and
  resisting its influence
•  
• Impact bias capitalizing /resisting tendency
  to overestimate intensity of future feeling
  states.
•  
• Loss aversion Sunk Costs capitalizing on and
  resisting its effects.
•  
• Reactance - capitalizing on and resisting doing
  the opposite of what your opponent wants
• Clustering illusion patterns where none exist.
•  
• Overconfidence effect using (or undermining)
  your opponents tendency to overestimate strength
  
•  

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Whether youre framing
or spinning
its all about control
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The Statistics

• Judges estimating damages
• People estimating height, number, duration
• Frame/spin
• Loss/gain
• Positional weaknesses/strengths
• Characteristics affecting value

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Anchoring

• Make the first offer
• Make it aggressive
• Set the bargaining range
• Resist being anchored
• anchors are most compelling in conditions of
  uncertainty
• Know your BATNA

"Should You Make the First Offer?"  by Adam D.
Galinsky, an assistant professor at Northwestern
University's Kellogg Graduate School of
Management..
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Fundamental Attribution Error
or
Deliberate?
Circumstantial?
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Impact Bias
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Loss Aversion
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Reactance
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Clustering Illusion
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Overconfidence Effect
I am a mighty whale!!!!
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At Days End, Its a Combination of
Planning, Persistence, Persuasion, Preparation,
Personality Possibility