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Mental Errors

The main mental errors are the following:

            Escalation
 It is an error committed by businesspeople when they get into competitive negotiations. It can also be considered as “over-commitment”.

What causes it: people’s ego and competition mainly
How to avoid it: Consciously know which are the alternatives to the deal beforehand and be objective

                  Partisan Perceptions
It is psychological phenomenon that causes people to misperceive the world and one particular situation. Good negotiators know how to avoid this. The know its existence, they visualise the other side’s position use analogy to frame the problem and do not hesitate to bring a neutral third party for guidance.

                  Irrational Expectations
Sometimes, an agreement can be hard to find. This difficulty eliminates the ZOPA. A solution to this difficulty might me dialogue or share new information that can give you some more bargaining power.

                  Overconfidence
It pushes us to overestimate our own strengths and underestimate our rival’s ones. The major problem is that it can blind us to dangers (and also opportunities). It is accentuated by what we call the “groupthinking”. It is possible to avoid it by empowering a team of bright and respected people to find and objectively represent the relevant data. They should also examine and report back on every key assumption.

                  Unchecked emotions

“Business divorces” involve a lot of anger and insults. When anger rises, parties stop focusing on logic and rational self-interest. It is possible to avoid it by establishing a cooling-off period and also by being fair.

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