The impact of cognitive biases on integrative negotiation

Keywords: decision-making; rationality; cognitive biases; negotiation outcomes

Abstract: This study investigates the impact of cognitive biases on integrative, value creating negotiation. An experimental study was conducted in which participants (n=100) executed a negotiation simulation with integrative potential and obtained individual and joint negotiation outcomes. Negotiation reports were coded for negotiators’ use of fixed-pie bias, framing bias, egocentric bias and the value of their negotiation outcomes. Results indicate a significant positive impact of the cooperative and competitive framing bias, and the egocentric bias on joint negotiation outcomes. The fixed-pie bias has a significant positive effect on joint negotiation outcomes up to a certain point, after which more use of the fixed pie bias results in lower joint negotiation outcomes. Cooperative framing has a positive effect on individual negotiation outcomes. These results show that cognitive biases can have mixed effects on negotiators’ outcomes, both preventing and assisting them in achieving high value integrative settlements.