L9 Biases, power and gender

Question 1

Which are the common biases/mistakes in negotiation?

Answer 1

1. Irrational escalation of commitment to intial course
2. Assuming zero-sum game (fixed pie)
3. Anchoring upon irrelevant information
4. Being overly affected by way information is presented (framing)
5. Relying too much on readily available information (availability)
6. Failing to focus on other side’s perspective
7. Overconfidence

Question 2

Mistake 1: Irrationally escalating commitment

What does it mean? Which is the best strategy to avoid it?

Answer 2

It is continuing a previosly selected course of action even if it is not what rational analysis recommend.

Best strategy: consider the decision from perspective of the other decision makers (e.g., recognize an auction as a trap and never make even a very small bid)

Question 3

Mistake 2: Assuming a zero-sum game

What does it mean? When is it true?

Answer 3

Assuming interests directly conflict with other party (your gain is my loss)

It is only true in distributive negotiations (single-issue), but not in integrative negotiations (multi-issue)

Question 4

Mistake 3: Anchoring upon irrelevant information

What does it mean?

Answer 4

People estimate value of unknown objects by starting from an initial anchor value and adjusting from there.
These anchors are based on whatever information (relevant or irrelevant) that is handy or strategic.

Question 5

Mistake 5: Relying too much on readily available information

Why does it happen?

Answer 5

Because things that you have encountered more often are more “available” in your memory.
Vivid presentations have more impact than dull presentations, even if they are equally informative.

Question 6

Mistake 6: Failing to focus on other side’s perspective

What does it mean?

Answer 6

Ignoring valuable information that can be learned by thinking about the other side’s decisions

• “Lemons” in the used-car market (quality uncertainty and information asymmetry)
  https: //www.investopedia.com/terms/l/lemons-problem.asp

Question 7

Mistake 7: Being overconfident

When does it happen?

Answer 7

Most people are overconfident concerning their estimated abilities when knowledge is limited.

Question 8

Which effect does power have in a negotiator?

Answer 8

People who have power are in the position to claim the most resources (e.g., the biggest slice of the pie)

Question 9

Which are the two different types of power?

Answer 9

• Social power: power over other people

- Personal power: freedom from other people (e.g., less dependency)

Question 10

How does you BATNA increase the power you have in a negotiation?

Answer 10

A good BATNA decreases your dependence on the other, gives you the ability to walk away, and protects you from accepting an offer you should reject or rejecting an offer you should accept.

Question 11

What is a micro-BATNA? Why is it useful?

Answer 11

If no agreement is reached at this meeting, what is the
best outcome?

Because it helps to draft in advance a good exit line to use if a meeting is inconclusive (e.g., “thank you for sharing your views and for listening to mine. If I decide to go forward, I will get back to you, perhaps with a fresh proposal.”)

Question 12

What can be a source of power in negotiations?

Answer 12

• Power in a good relationship
• Power in understanding interests
• Power in inventing options
• Power in using external standards
• Power in effective communication
• Power in making a carefully crafted commitment
• Power in developing a good BATNA

Question 13

How can you make the most of your potential power?

Answer 13

• Don’t use your strongest source of power alone (e.g., disclosing a strong BATNA might not lead to best outcome)
• Combine different sources of power
• Believe what you say and say what you believe

Question 14

What is the leaky pipeline?

Answer 14

The leaky pipeline refers to the fact that many specialized professions (STEAM) have a more equitable gender balance at entry level, yet something happens to female representation along the way to the very top of these professions.

Question 15

What are the reasons for female underrepresentation?

Answer 15

1) Employer’s discrimination (gender-biased beliefs/evaluations)
2) Gender differences in competitiveness and self-confidence (beliefs about relative ability)
3) Women spend more time on non-promotable tasks
4) Self-promotion
5) Negotiation behavior

Other reasons:

• Preferences
• Attitudes towards risk
• Human capital (study majors)
• Child rearing

Question 16

1) Biases in evaluations

How do they work and how can we solve them?

Answer 16

Women are included in the so-called “prove it again” group (PIA group), which is stereotyped as low in competence so that’s why women often have to perform better to be judged equally competent (especially in leadership roles).

Awareness of biases and mixed-sex teams (rather than monolithic) are important firts steps.

Question 17

2) Gender differences in competitiveness and self-confidence

Answer 17

• Both have the exact same initial performance, but women have a lower likelihood to enter a competition
• Both overestimate themselves, but men more than women

(Study of Niederle and Vesterlund, 2007)

Question 18

3) Women spend more time on non-promotable tasks (and less on promotable tasks) than men
How does it work in mixed-sex groups? And in same-sex groups?

Answer 18

• Mixed-sex: women are more likely than men to volunteer for non-promotable tasks and are more likely to accept requests to do it from their manager
• Same-sex: women share volunteering, men tend to fall on the same men

Question 19

3) Women spend more time on non-promotable tasks (and less on promotable tasks) than men
How can managers address this problem?

Answer 19

• Finding ways to distribute tasks more equitably (e.g., rotating assignment of non-promotable tasks across employees)
• Encouraging men to volunteer
• Empowering women to demand fairer treatment
• Enabling all employees to show their full potential

Question 20

4) Self-promotion

What is self-promotion?

Answer 20

It is a practice in which individuals tend to emphasize their stengths and talents (evaluation of own performance/ability)

Question 21

4) Self-promotion

Who does evaluate their performance less favorably: men or women?

Answer 21

Women evaluate their performance less favorably than equally performing men (just when it comes to evaluate oneself, not other men/women)

Question 22

5) Negotiation behavior

How is women’s negotiation behavior compared to men?

Answer 22

• Men (on average) are more successful than women in “pie slicing”
• Opening offer: women set lower aspirations and ask for less than do men
• Women (on average) are less likely to initiate negotiations than men

Question 23

Which are the possible strategies for women in negotiations?

Answer 23

• Recognizing factors that influence bargaining behavior
• Recognizing and confronting stereotypes
• Removing ambiguity from novel-appearing situations
• Negotiating on behalf of a constituency