COGNITIVE BIASES AND THEIR EFFECTS ON CONFLICT MANAGEMENT

In contrast to perception of external physical events (which usually can be directly observed), much of the information we need to know about people is not directly accessible; rather, we must infer it on the basis of their behavior and spoken words.

Given the complexity of the task, it is not surprising that misunderstanding, error, and bias in judgment occur naturally even under favorable circum­stances. In conflict, bias is apt to occur because conflict often leads to inadequate communication between the negotiating parties; arousal of emo­tional tensions that constrict thinking to stereotypes and to black-and-white viewpoints; primary focus on opposed interests; and anxiety, which may pro­pel one to deny the conflict or flee into agreement before thinking through its consequences.

This tendency to use shortcuts, or heuristics, when we process information is an extremely cost-effective strategy, and much of the time heuristic processing provides us with accurate information. It may seem peculiar that heuristics— cognitive shortcuts—are cost-effective, because they lead to biases and hinder effective conflict resolution; however, our point is that much of the time, these shortcuts may be effective when used in nonconflict situations because they can lead to an answer or solution that is acceptable and efficient. For example, in forming an impression of a new next-door neighbor, one could do an extensive search (interviewing friends and relatives, perhaps even hiring a private investigator), or one could simply rely on gut impression. The former strategy is obviously costly and time-consuming; the second strategy is simple, but prone to bias.

In competitive encounters such as negotiation, though, the heuristic-based judgments we make are often wrong. Furthermore, the nature of our errors is not random but instead systematic. For the purposes of our discussion, we focus on systematic error and patterned fallacy; these are known as biases. Biases come in many forms and shapes. For instance, people can be biased about other people, as when they use stereotypes (someone might perceive all New Yorkers as pushy). People can also be biased about situations (the gambler’s fallacy— having lost so many times in a row they are “due” to win) (Tversky and Kahneman, 1974). Paradoxically, people can also be biased about themselves (the vast majority of people judge themselves to be above average on many positive characteristics and abilities, even though it is logically impossible for most people to be above average).

Table 11.1. Core Biases and Their Effects.

Source: Author.

In this chapter, we focus on four key biases selected for special emphasis because of their fundamental pervasiveness in many kinds of conflict situations. We list these in Table 11.1. We regard these biases to be at the core of others that may crop up in conflict situations.

Need to Simplify Conflict

It may often seem that parties interlocked in conflict at the bargaining table are purposefully attempting to complicate matters. In fact, people tend do the oppo­site: they dramatically oversimplify situations. At the negotiating table, as in many other situations, people form judgments and attitudes without much deliberation and without the benefit of complete evidence. There are a number of reasons, notably that the human mind—though highly evolved—is simply not a computer, capable of endless processing of full information. Rather, peo­ple focus on one or two salient points in a situation. In this sense, people do not pay attention to every detail; rather, they look for a few salient cues and then make an assumption about how to act.

In addition to the general problem of stereotyping (which we discuss further in this chapter), the need to simplify the conflict situation also can result in other biases or poor gathering of crucial information needed to optimally resolve con­flict. The desire to simplify the situation leads us to ignore information that is inconsistent with our initial beliefs and, in some cases, to interpret ambiguous information as being consistent with them. For example, we often associate the color black with negative ideas: death, evil, or “bad guys” wearing black hats. As an illustration of how prior beliefs about the color black can influence per­ception, consider two groups of trained referees who were shown videotapes of the same aggressive play in a football game (Frank and Gilovich, 1988). One group of referees viewed a version of the tape in which the aggressive team wore white uniforms, whereas the other referees saw the aggressive team wearing black.

Further, the need to simplify a conflict situation can lead to faulty percep­tion about cause-and-effect relationships. People may falsely infer a causal relationship where none exists, or they may assume that a given action by one person results in an action by the other person. This effect, known as the “biased punctuation of conflict,” occurs when people interpret interaction with their adversaries in other-derogating terms (Kahn and Kramer, 1990). Actor A perceives the history of conflict with another actor, B, as a sequence of B-A, B-A, B-A, in which the initial hostile or aggressive move was always made by B, obliging A to engage in defensive and legitimate retaliatory action. Actor B punctuates the same history of interaction as A-B, A-B, A-B, however, revers­ing the roles of aggressor and defender. Disagreement about how to punctuate a sequence of events in a conflict relationship is at the root of many disputes. When each side to the dispute is queried, they explain their frustrations and actions as defenses against the acts of the other party. As a result, conflict escalates unnecessarily.

Opposing Forces

In very general terms, people in negotiation and conflict situations tend to assume that the degree of opposition between themselves and other parties is greater than it actually is. A classic root cause of most ill-fated negotiations is the fixed-pie perception: the belief that the other party’s gain comes at our expense, and our gain at theirs (Bazerman and Neale, 1992; Thompson and Hastie, 1990).

negotiators assumed that the amount of available resources was fixed, even though this was not the case (Thompson and Hastie, 1990).

A close cousin of the fixed-pie perception is the lose-lose outcome (Thompson and Hrebec, 1996). The possibility of lose-lose negotiations often goes unchecked, because most people tend to view the opposite of win-win as win-lose; however, lose-lose negotiations do exist (Thompson, 1990). They occur if both parties settle for something that both prefer less than what they can readily have. Consider the following lose-lose situations:

• Two countries have been in conflict for decades. Each would benefit from peaceful coexistence, but their attempts at peace talks never achieve substantive progress, and the conflict rages on.

• The management and labor representatives for a local industry embroiled in contract-renewal talks both realize that, if the union goes on strike, company owners and union membership alike will suffer. But no agreement is reached by the time the contract expires.

False Dichotomy: Choosing Between Cooperation and Competition

If you view the world through the lens of a fixed-pie vision, the choices are pretty clear: either hold out to protect your own interests, which are by defini­tion opposed to the other’s, or cooperate with the other party so that some kind of compromise can be reached. Cooperation and competition are thought to be the yin and yang of conflict resolution, and it is true that most conflicts are mixed-motive in the sense that we are motivated to get as much of the pie as we can for ourselves, but at the same time motivated to work together with the other person to ensure we reach mutual agreement. We argue, though, that this is a false dichotomy in most instances, because we need not choose to behave purely cooperatively or purely competitively.

Strategic creativity involves using both cooperation and competition. Specif­ically, cooperation is needed to reach some kind of mutual agreement with the other party. Fundamentally, cooperation implies concern for your own interests as well as those of the other party. Furthermore, pure cooperation also implies that the other party feels the same way about you. This, of course, is the basis for trust. Yet, it is often unrealistic or inappropriate to assume that people are concerned with the other party’s interests. This is true in conflict situations, as when two neighbors have a dispute about a fallen tree on the property line; it is also true in negotiation situations, as when an employer and an employee discuss the terms of employment. In most cases, the primary objective of the parties is to further their own interests. Thus, we do not encourage parties to expect that others have their best interests in mind. Rather, we suggest that par­ties in conflict and negotiation situations attempt to discover points of mutual interest and use them to leverage mutually acceptable resolutions.

In addition, strategic creativity assumes that parties’ interests, though partially opposed, are not completely opposed. The strategically creative negotiators search for opportunities to satisfy the other party’s interests as well as their own.

One way to accomplish a mutually beneficial situation is to identify the issues at hand, and then assess which are important to oneself, and which are impor­tant to the other party. For example, in the peace treaty talks between Syria and Israel, technical experts formed committees to identify several key issues, includ­ing the extent of an Israeli withdrawal from the Golan Heights, water rights, security measures, and the timetable for implementing an agreement. After these separate issues were identified, it became clear that Israel put a greater emphasis on security guarantees, and Syria placed greater weight on the with­drawal from the Golan Heights, thus allowing a more integrative agreement to emerge (Slavin, 2000).

Egocentric Judgment: “I Only Want What’s Fair (for Me)” Underlying all of the biases we have discussed thus far is a basic tendency for people to protect their own egos and interests. Our psychological immune sys­tem is so efficient that we do not even realize our judgments are tainted with self-interest. For example, consider a husband and wife reflecting on their per­ceptions of responsibility for cleaning dishes, shopping, child care, and other household and relationship activities. Imagine asking each spouse indepen­dently to score who does what percentage of the work. In such a case, both partners generally assume themselves to be more responsible than the other (Ross and Sicoly, 1979). When both spouses’ contributions are totaled for a “couple” score, the perceived contributions frequently amount to more than 100 percent! The same pattern can occur in product development teams and numerous other settings. Such differences in perception undoubtedly exacer­bate conflict at home, in the workplace, and elsewhere. For example, the presence of egocentric biases played an important role in the American Airlines negotiations in April 2003, in which bankruptcy was narrowly avoided. American said it had to have $1.8 billion in annual cuts from all employee groups as a part of a $4 billion effort to restructure the company. The airline was losing $5 million a day. The three major groups involved—the pilots union, the professional flight attendants, and the transport workers union all believed that they deserved more than what they believed others were entitled to (Torbenson, 2003).

Yet despite the egocentric bias, most negotiators describe themselves as want­ing to be “fair” (Loewenstein, Thompson, and Bazerman, 1989). Most people also prefer to divide resources “fairly” (Messick, 1993). The problem is that self­interest tinges otherwise fair allocation of resources. This is because fairness is not an absolute construct, but highly subjective. What is fair to one person may not be fair in the eyes of another. Multiple interpretations of fairness are equally valid in various situations.

Summary

The findings we have described represent four important and pervasive biases that occur in negotiation and conflict resolution. These four findings are ene­mies that theorists and practitioners must fight to eliminate. In the next section, we elaborate further on the biases that threaten successful dispute resolution in negotiation, focusing specifically on their impact on conflict management.