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Put it on the right spot - How to encounter loss aversion in package concessions tactics with different issue priorities
Loss aversion is one of the major cognitive biases that can block creative solutions within negotiations. Loss aversion can hinder process stability and satisfactory agreements. This is of particular importance when bargaining in packages within multi-issue negotiations. Unfortunately, existing research does not address tactical solutions on how to overcome loss aversion bias, especially within package concessions and under consideration of the counterpart’s perception. Preference difference in negotiation issues were already found to hold promising potential for mutual gains by creating trade-offs. However, there is little guidance on how to specifically allocate losses and gains on differently prioritized issues involved in one negotiation package. We extend the literature by focusing on the location of gains (my concessions) on counterparts' important issues as leverage for a disliked framing effect. We set up a large-scale experimental study and first results yield interesting and relevant insights for negotiation research and practice.