Egocentrism and Negotiation Failure

Negotiations and disagreements are difficult for many reasons. We set them up as antagonistic, and so we assume that when we win, our rival loses and vice versa. Consequently, we sometimes miss opportunities to find agreements that benefit both sides.
Another problem in negotiation is that our own priorities may differ from those of our rivals. For example, if management in a company is negotiating with labor, it could be that management wants to minimize the amount of money they pay in wages, while labor wants to focus on vacation days and training. When the two sides fail to see that their priorities differ, then they may miss opportunities to trade concessions in ways that maximize everyone's happiness.
An interesting paper in the March, 2014 issue of the Journal of Experimental and Social Psychology by John Chambers and Carsten De Dreu suggests that egocentrism plays a big role in our ability to recognize when other people's priorities differ from our own.
Egocentrism is the tendency for people to assume that other people view the world the same way they do. In negotiation, this is reflected in the tendency for one side in a conflict to assume that the other side has the same priorities rather than looking for evidence of the other side's priorities in the way the negotiation proceeds.
In one study, participants were college students who were brought in the lab in pairs to do a mock negotiation. One participant was assigned to be management and the other labor in a corporate negotiation. They were given 10 minutes to negotiate about 5 issues (like wages and vacation days). Each participant had a sheet that told them how many points they would obtain if they got an agreement for a particular level on that issue. So, management might get 400 points if they negotiated a 3% wage increase, and labor might get 0 points for that outcome. Labor might get 400 points if they negotiated a 15% increase, and management would get 0 points for that outcome. The pairs that got the most points were entered into a drawing to win a cash prize.
The points were set up to reflect the priorities of the two sides. For three of the issues, the priorities were exact opposites (so a high wage increase for one side was very good for labor and very bad for management). Some issues were more important to one side or the other. So, labor might get only 200 points for negotiating a favorable number of vacation days, but 400 points for negotiating a favorable number of training days. The points were set up so some issues were much more important (that is, worth more points) to one side than to the other.
After doing the negotiation, participants had to guess what they thought their rival's point sheet looked like. The key finding was that participants The key finding was that participants generally assumed that issues that were important for them, were also important for their rival, though in the opposite direction. As a result, pairs missed opportunities to trade off issues that were important to their rival against issues that were important to them.
In another study, the payoffs were manipulated in two other ways. For some issues, the two participants actually wanted the same outcome. That is, they would each get a large number of points for the same outcome. For other issues, one person had no vested interest. That is, they would receive no points regardless of the outcome, while the other would receive points for that outcome.
As before, pairs engaged in a mock labor negotiation and then later guessed what their rival's payoff sheet looked like.
When participants had a vested interest in an issue (that is, they would get points for a particular outcome), they assumed their rival wanted the opposite outcome, regardless of whether their rival actually wanted the same or the opposite outcome. So, participants maintained their egocentrism.
However, when they had no vested interest (that is, they would not get any points for that issue), then they were accurate at assessing the points their rival would get.
What does all of this mean?
We are clearly capable of understanding other people's priorities from their actions. That is why participants with no vested interest did a good job of judging what their rival wanted.
However, when we have a particular desired outcome in a negotiation, we bring a frame to that negotiation that assumes that our rival is our exact opposite. We expect that issues important to us are also important to our rival. We expect that our rivals want the opposite of what we want.
This attitude can make it harder to negotiate successfully, because our rivals often are not like us. They have different priorities, and sometimes they even want the same outcome we do.
As a result, whenever we are in a disagreement, it is important to take a step back and figure out what the disagreement is really about. Often, there may be ways for everyone to get what they want, if only we pay attention to their actions rather than interpreting their views based on our own.