Anchoring bias in the TARP warrant negotiations

Wilson, Linus

doi:10.1016/j.jeconbus.2011.03.002

Cited by 10 publications

(5 citation statements)

References 16 publications

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“…Initial offers were found to significantly affect final profit, serving as anchors for both parties during the negotiation process. This has been demonstrated in controlled experiment (Ritov, 1996) as well as in real negotiations (Wilson, 2012). Even if an anchor should not affect the reservation price, results support the hypothesis that subjects anchor their reservation price on unreliable information (Kristensen and Garling, 2000).…”

Section: Self-serving and Anchoringsupporting

confidence: 66%

“…Anchoring could manifest itself in negotiation in a variety of ways. For example, anchoring could affect the initial positions, aspirations, or bottom lines of negotiators (Ritov, 1996;Whyte and Sebenius, 1997;Wilson, 2012). Initial offers were found to significantly affect final profit, serving as anchors for both parties during the negotiation process.…”

Section: Self-serving and Anchoringmentioning

confidence: 99%

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A literature review of cognitive biases in negotiation processes

Caputo

2013

International Journal of Conflict Management

120

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Purpose\ud – What is the discipline's current grasp of cognitive biases in negotiation processes? What lessons can be drawn from this body of literature? The purpose of this paper is to review and discuss the limited research on cognitive biases in the context of negotiations.\ud \ud Design/methodology/approach\ud – This article reviews research from judgment and decision-making, conflict management, psychology, and management literatures to systematize what we already know about cognitive biases in negotiations.\ud \ud Findings\ud – Decision-making studies have mainly identified 21 biases that may lead to lower quality decisions. Only five of those biases have been studied relating to negotiations: the anchoring, the overconfidence, the framing, the status quo and the self-serving bias. Moreover, negotiation literature has identified five additional biases that affect negotiation processes: the fixed-pie error, the incompatibility error, the intergroup bias, the relationship bias and the toughness bias. Biased behavior differs across cultures and emotional mood.\ud \ud Research limitations/implications\ud – Implications for future research include building comprehensive models of how negotiators can overcome cognitive biases, studying interconnections between different biases, and increasing complexity of the studies to provide practitioners with more practical advice.\ud \ud Originality/value\ud – The literature reviewed in this paper spans diverse disciplines and perspectives. This paper can be a starting point for researchers interested in understanding how cognitive biases affect negotiations. Moreover, it could be a starting point for future research on this field

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Section: Self-serving and Anchoringsupporting

confidence: 66%

Section: Self-serving and Anchoringmentioning

confidence: 99%

A literature review of cognitive biases in negotiation processes

Caputo

2013

International Journal of Conflict Management

120

View full text Add to dashboard Cite

show abstract

“…The effects of anchoring have been studied in the context of many problems, including forecasting (Campbell & Sharpe, 2009;Cen et al, 2013;Hess & Orbe, 2013), voting (Yang et al, 2013) and negotiating (Wilson, 2012). For a review of different interesting experiments and real-world problems, we recommend the review paper by Furnham and Boo (2011).…”

Section: Anchoring Biasmentioning

confidence: 99%

Anchoring bias in eliciting attribute weights and values in multi-attribute decision-making

Rezaei

2020

Journal of Decision Systems

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The aim of this study is to look at anchoring bias-one of the main cognitive biases-in two multi-attribute decision-making methods, SMART and Swing. First, the existence of anchoring bias in these two methods for eliciting attribute weights and attribute values is theorised. Then, a special experiment is designed to compare the results estimated by the respondents and the actual results to measure potential anchoring bias. Data were collected from a sample of university students. The statistical analyses indicate the existence of anchoring bias in the two methods. It is also interesting to see that the impact of anchoring bias in estimates provided by the decision-makers on the obtained weights and values depends on the method that is used. These findings have significant implications for the actual decision-makers. Future research may consider the potential existence of cognitive biases in other multi-attribute decision-making methods and focus on developing mitigation strategies.

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“…With regards to the importance of analyzing goals and interests, this is central in the perspectives on negotiation described by Fisher et al (1991) and descriptions of how the use of creativity can substantially enhance this process can also be found (Walton and McKersie, 1965; Ogilvie and Simms, 2008; Wilson and Thompson, 2014). Furthermore, the importance of a Plan B (or, as formulated in the extant literature, best alternative to an negotiated agreement) is emphasized by, for example, Fisher et al (1991) and Thompson (2013), and the importance of making the first move (referred to as the anchor effect) has also been discussed by many researchers (Ritov, 1996; Whyte and Sebenius, 1997; Kristensen and Gärling, 2000; Wilson, 2012). The issue of power has also been frequently discussed in the literature (Kim et al , 2005; Anderson and Thompson, 2004; Wolfe and McGinn, 2005; Ball and Eckel, 1996; Christen, 2005; Kim, 1997), and the role of the physical location has been analyzed by, for example, Mayfield et al (1998) and Brown and Baer (2011).…”

Section: Discussionmentioning

confidence: 99%

Goal-oriented balancing: happy–happy negotiations beyond win–win situations

Åge

Eklinder-Frick

2017

JBIM

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Purpose This paper aims to suggest a dynamic model incorporating the important dimensions that exist in negotiation processes. Design/methodology/approach To produce a general and conceptual theory of negotiation, the grounded theory methodology is deployed. Findings The core process in this model is dubbed “goal-oriented balancing” and describes how he negotiator is continuously balancing opposing, and seemingly contrasting, forces in a situation specific and dynamic manner to reach agreements. Based on these findings, this study also suggests a concept to describe negotiations that is focused on collaboration and that is not an oxymoron as is the concept of “win–win”. Practical implications This conceptual model can be used by managers and practitioners to navigate in a negotiation process. Originality/value This is the first grounded theory study in negotiation research and attempt to describe negotiation processes as dynamic events in which different dimensions are managed simultaneously.

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Anchoring bias in the TARP warrant negotiations

Cited by 10 publications

References 16 publications

A literature review of cognitive biases in negotiation processes

A literature review of cognitive biases in negotiation processes

Anchoring bias in eliciting attribute weights and values in multi-attribute decision-making

Goal-oriented balancing: happy–happy negotiations beyond win–win situations

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