Cognitive Biases in Negotiation - Literature Review

Abstract

Abstract Objective: The purpose of this paper is also to thoroughly review those studies in the management literature that focused on bias in negotiation and to ascertain a couple of new research trajectories that could be observed as the result. As a matter of fact, a human’s judgment making capacity and behavior could be greatly influenced by cognitive misperceptions thus affecting decisions in negotiations. Whilst Thompson (2006) analytically examined the effects of biased decision-making processes for negotiations, the intention of this paper is to fill the gap through a systematic assessment of the literature. Methodology: I have provided a theoretical background on decision makers’ cognition in this paper to provide context and introduce the research; after which we take a closer look at the literature and discuss its results. Based on this, I noted that limited research, with alternate results were done based on the interaction between biases bothering on mood, culture, personality as well as education and experience on the negotiators’ judgments. Finally, we suggest that future research trajectories might be on multilateral and integrative negotiations, the role of third parties and a better comprehension of the cognitive bias and how to rise above it in negotiations. Findings: Despite the fact that this topic is considered important, it is surprisingly under-researched. Author was able to identify the void and inadequacies of the literature identified in journal articles systemizing the intersection of negotiation studies, from cognitive biases studies, group decision making and from the decision making and judgment literature. Value Added: This paper showed that there are only a handful of papers that focus on why, how and when cognitive biases influence negotiation process. Recommendations: There is a great need for papers that focus on cognitive biases in the negotiation process.