Sample frameDay 126·Negotiation · Trade

Good morning. Somewhere in the deal you're working on sits an issue you both want settled the same way. Neither of you has mentioned it.

Negotiation.

The Fixed-Pie Illusion

5 min read·Apply by lunch

The question

Name the issue in your current negotiation that you and the other side would both settle the same way this morning. If nothing comes inside a minute, what have three weeks of defending a number actually bought you?

The idea

In 1990 Leigh Thompson, who now teaches dispute resolution at Northwestern's Kellogg School, and Reid Hastie, a psychologist of judgement, published 'Social Perception in Negotiation' in Organizational Behavior and Human Decision Processes. They ran negotiators through tasks built from a mixture of issues: some genuinely opposed, some where the two sides differed in how much they cared, and some where both parties wanted the identical outcome. Then they measured what people believed about the other side. Negotiator after negotiator arrived assuming the interests were directly opposed on everything — the fixed-pie perception — and that belief formed in the opening minutes and largely held. The costliest version of it is the incompatibility error: you miss the issues on which you already agree, and hand over for free something the other side would happily have granted. Those who corrected the fixed pie early did better than those who never tested it. The illusion isn't pessimism about the other side. It's a failure to ask.

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