Emotions Play a Crucial Role While Negotiating Offers

by Hannah Punitha on Oct 17 2008 5:06 PM

A new study from Columbia University has revealed that emotions play a crucial role while negotiating offers.

Scientists Andrew Stephen and Michel Tuan Pham looked at the interplay of emotion and reason in everyday deal making and found that our negotiating skills depend on our emotions to some extent.

The participants were made to play a classic negotiation game called the "ultimatum game."

In the ultimatum game, one person (the "proposer") has a given amount of cash, which he is told to divide with a second person any way he likes. The catch is that the second person must either accept the offer or reject it entirely, no negotiation allowed. If he rejects it, both players walk away with nothing.

For the study, the researchers manipulated how much participants trusted their feelings before they played a series of ultimatum games for real money.

They asked some of the participants to think of two occasions in their past when trusting their feelings to make decisions resulted in good outcomes.

People generally find it easy to think of two such occasions, giving participants greater confidence in trusting their own emotions while making decisions.

Other participants were told to think of 10 occasions when trusting their feelings to make decisions resulted in poor outcomes this made participants wary of trusting their feelings.

Then all the participants played a computerized version of the ultimatum game, in the role of "proposer."

The researchers found that participants who were more confident in following their emotions offered somewhat less money than the others.

This is because they were more focused on the "gist" of the offer itself (and what felt good), rather than on estimating the other player's possible reaction and calculating the probabilities of payoff. In short, the immediacy of the offer trumped the more complicated calculation.

The researchers believe that emotional negotiators actually have an easier time visualizing the offer itself: They picture themselves offering someone 20 dollars from their 50 dollars pot and it feels "okay."

The study appears Psychological Science, a journal of the Association for Psychological Science.