Week 1- Error Bias and Social Utility

Question 1

How could you define negotiator succes?

Answer 1

The collective functionality of agreements

Question 2

What are benefits of reaching integrative agreements

Answer 2

• Economic prosperity
• Strengthens feelings of self-efficacy
• Increases satisfaction
• Reduces the likelihood of future conflict?

Question 3

Why do people often tend to discount advice they receive from others when making decisions?

Answer 3

Because they are privy to the reasons supporting their own estimate, but not to the reasons supporting the advisor’s estimate

Question 4

What is the impact of giving negotiators advice and cues on challenging fixed-pie perceptions, and does instruction-based advice effectively change these perceptions?

Answer 4

Giving negotiators advice and cues can influence their performance by challenging fixed-pie perceptions. However, instruction-based advice may not effectively change these fixed-pie perceptions. Even when participants receive full information about their opponents’ payoff schedules, they often do not abandon their initial erroneous perceptions.

Question 5

According to Steinal et al., (2007) Under what circumstances do negotiators exhibit an effect of experience?

Answer 5

Negotiators exhibit an effect of experience when they are provided with feedback on their performance after each round of negotiation.

Question 6

How do you gain Expertise in negotiations?

Answer 6

Experience
Advice

Question 7

Under what conditions can advice be beneficial for negotiators in understanding trade-offs?

Answer 7

WHen have some negotiation experience prior to receiving the advice.

Question 8

Name one benefit of combining experience and advice in negotiations

Answer 8

1) Compare the advice they receive with their own
experience from earlier negotiations. This would help them to transfer
the advice and adjust their negotiation behavior, which in turn should
improve their performance.

Question 9

Which 3 negotiation tactics were described by Steinel et al., (2007) that are related to joint outcomes? And how do they effect the joint outcome?

Answer 9

Distributive behavior: force opponents to make concessions
Information exchange & Heuristic trail & error: help people to
identify mutually satisfying settlements

Question 10

Why might advice possibly not be understood by people without actual experience with a task?

Answer 10

People more motivated to listen to advice after they performed a task but failed.

–Failure makes people more open to hear new ideas and increases self-analysis, which leads to better retention of skills and facilitates learning.

Question 11

What was the response of participants who received the advice after the first negotiation round compared to those who received the advice before the first negotiation round, according to the discussion?

Answer 11

They reported a greater intention to use it than those who received the advice before the first negotiation round.

Question 12

According to Fisher and Ury (2011, “Getting to yes: Negotiating agreement without
giving in,” Chapter 1), positional bargaining is the method of negotiation by which…

Answer 12

Each side takes a position, argues for it, and makes concessions to reach a compromise

Question 13

True or false? : “Arguing over positions endangers an ongoing relationship as each side tries
through sheer will power to force the other to change its position.”

Answer 13

True

Question 14

Which statement is true according to Fisher and Ury (2011, “Getting to yes:
Negotiating agreement without giving in,” Chapter 2)? Statement 1: “A basic fact
about negotiation is that you are dealing not with abstract representatives of the
other side, but with human beings.” Statement 2: “The method of principled
negotiation involves separating the people from the problem.”

Answer 14

Both statements are true

Question 15

Which statement is true according to Fisher and Ury (2011, “Getting to yes:
Negotiating agreement without giving in,” Chapter 3)? “Each side rarely has multiple
interests.” Statement 2: “A common error in diagnosing a negotiating situation is to
assume that each person on the other side has the same interests.”

Answer 15

Statement 1 is false; Statement 2 is true.

Question 16

Gunia, Sivanathan and Galinsky (2009; “Vicarious entrapment: Your sunk costs, my
escalation of commitment”) suggested vicarious dissonance as a promising avenue
for individuals and organizations to inoculate decision-makers from vicarious
entrapment. What are the requirements for vicarious dissonance, according to
Norton, Monin, Cooper, & Hogg (2003, as cited in Gunia et al., 2009)?

Answer 16

Perception of free choice and the production of aversive consequences

Question 17

Guinia et al., (2019) What is meant by “escalation of commitment” in decision-making, and how does it manifest?

Answer 17

“Escalation of commitment” is when someone persists in investing resources and effort to achieve a goal, even when it’s clear the goal may not be attainable

Question 18

Guina et al., (2019) Why do individuals often feel the need to defend and support their initial decisions, especially when they receive feedback or information that challenges their positive self-image?

Answer 18

To maintain a positive self-image, and when they encounter feedback or information that threatens this positive self-concept, they perceive it as a threat to their self-worth.

Question 19

Explain the concept of Effort Justification

Answer 19

When people invest significant time, energy, or resources into achieving a goal or completing a task, they are more likely to attribute greater significance to that accomplishment, even if the actual outcome or reward may not be proportionate to the effort expended.

Question 20

How does affirming one’s overall self-worth after a poor decision impact the likelihood of continuing with a failing course of action?

Answer 20

Affirming one’s overall self-worth after a poor decision decreased escalation to the failing course of action.

Question 21

How does reducing personal responsibility impact cognitive dissonance and the escalation of commitment?

Answer 21

When you feel less accountable for your actions, it can make it easier to handle conflicting thoughts and reduce the tendency to stick to bad decisions, like the escalation of commitment.

Question 22

What happens when individuals feel psychologically connected to someone, as discussed in the article by Guinia et al., 2009

Answer 22

When individuals feel psychologically connected to someone, they can start to adopt that person’s characteristics and see themselves as being similar to them (“Self”status)

Question 23

How do individuals who view themselves as interdependent define their identity, as discussed in the article by Guinia et al., 2009?

Answer 23

They define their identity based on the characteristics of their groups.

Question 24

What can happen when the boundaries between oneself and others become blurred due to psychological connections, as discussed in the article by Guinia et al., 2009?

Answer 24

Individuals may start to feel and act more in line with the internal emotions and thoughts of those they are connected to.

Question 25

What does perspective taking contribute to escalation?

Answer 25

Perspective taking fuels escalation of others’ commitments
- Vicariously justify others’ decisions

Question 26

Psychological connections breed … escalation

Answer 26

vicariously

Question 27

How did participants who were primed with interdependence behave regarding their investments compared to those who were primed with independence, as discussed in the Guinia et al., 2009 research?

Answer 27

Participants primed with interdependence invested significantly more in the previously chosen division than participants primed with independence.

Question 28

Explain the differences between WTA & WTP (Kaheman et al., 1990)

Answer 28

The difference between WTP and WTA is the gap between what someone is willing to pay for something and the minimum they want to receive as compensation for giving up that right.

Question 29

Concession aversion

Answer 29

Reluctance to accept a loss on any dimension of agreement

Question 30

Loss aversion

Answer 30

The generalization that losses are weighted substatially more than objectively commensurate gains in the evaluation of prospects and trades.

Question 31

Which factors contribute to the discrepancies between evaluation of buyers and sellers?

Answer 31

The perceived illegitimacy of the transaction: may contribute to the extraordinarily high demad for personal sompensation for agreeing to the loss of a public good

Standard bargaining habits: sellers are often rewarderd for overstating their value, and buyers for understating theirs

Question 32

Reluctance to sell & Reluctance to buy: Explain the differences

Answer 32

Discrepancy between WTA & WTP.
RTS = exchanging the good for the money
RTB = exchanging the money for the good

Question 33

Exchanges of money and good (or between 2 goods) offers the possibility o 4 comparisons. Name all 4

Answer 33

• A choice of gaining either the good or money;
• A choice of losing one or the other;
• Buying;
• Selling

Question 34

Coase theorem

Answer 34

The allocation (verdeling) of resources to individuals who can bargain and transact at no cost should be independent of initial property rights.

Question 35

Instant endownment effect

Answer 35

The value an individual immediately assigns to an object increases substantially as soon as that individual is given the object

Question 36

Long term endownment

Answer 36

Sentimental attachment

Question 37

What does the principle of proportionality between efforts and outcomes entail, and how is it influenced by comparisons with others? (Loewestein et al., 1989)

Answer 37

To strike a balance between the energy they invest in a task and the results they achieve. They compare themselves to other people to ensure they are fairly rewarded for their efforts, and that this reward is commensurate with what others achieve in similar circumstances.

Question 38

Which 3 motives are named by Loewestein et al., (1989), that underly concern for other people’s outcomes

Answer 38

Avarice
Altruism
Egalitarianism

Question 39

Which 6 motives of Concern for others’ payoff are named by Loewestein et al., (1989),

Answer 39

Self interest: Increase own payoffs;
Self-sacrefice: decrease your own payoffs;
Altruism: Increase the payoffs to the other party
Aggression: decrease the payoffs to the other party
Cooperation: Increase the sum of your payoff and the other’s payoff;
Competition: Increase the difference between your payoffs

Question 40

Loewestein et al (1989) talks about the “Selfish-shift”. What does this entail?

Answer 40

A move toward greater concern for own payoff as the relationship shifted from positive to negative - that was mediated by dispute type

Question 41

Name two limitations of the indifference curve approach (Loewestein et al., 1989)

Answer 41

1) Difficult to make specific behavioral predictions
2) Difficult to compare indifference curves to the Utility models that formed the main thrust of work on decision making under uncertainty

Question 42

What is the alternative approach for modeling interpersonal preferences in decision making, and how does it work? (Loewestein et al., 1989)

Answer 42

The alternative approach bypasses the issues associated with indifference curves and utilizes social utility functions.
Social Utility functions: It specifies the level of satisfaction as a function of outcomes for both oneself and others.

Question 43

What is the central idea of the prospect theory and how does it influence the way people make decisions? (Loewestein, 1989)

Answer 43

That people evaluate the Utility of different courses of actions in relations to reference point;

Outcomes that are lower than the reference point are perceived as losses, while outcomes that are higher than the reference point are seen as gains

Question 44

What is the role of a reference point in decision-making?

Answer 44

“Reference point” represents a state to which individuals have adapted. It is typically assumed to correspond to the status quo, or the current situation that people are familiar with.

Question 45

How does a reference point in decisionmaking can be influenced in an interpersonal context?

Answer 45

In an interpersonal context, the outcomes of another person may also emerge as an alternative or additional reference point, potentially influencing how individuals assess and compare their own outcomes and the outcomes of others.

Question 46

Prospect theory

Answer 46

• examines decisionmaking in individual context in which decision outcomes affect only the decision maker; the reference point is most frequently modeld as the current state of the decision-maker (can also assume other psychologically relevant values)

de prospecttheorie werkt goed voor individuele besluitvorming, maar blijkt minder effectief te zijn wanneer er sociale interactie en relaties bij betrokken zijn.