Proper Negotiation Training Can Demonstrate That Defeat Can Be Better Than Winning
People are not specially fond of losing. Everybody loves a success and it is important for us all to be on the winning side. In fact, it is so important for us to be on the winning side that research tells us that typically we have an incredibly an interesting approach to overcoming possible threats.
In an area of research called Prospect Theory, Kahneman and Tversky investigated the likely flaws and contradictions in human behaviour. They identified that research subjects when presented a choice prepared in one way might display cautious conduct but when offered essentially the same solution formulated in a different way the same research subjects might exhibit risk seeking behaviour.
A key result of the research performed by Kahneman and Tversky is that they identified that people's attitudes towards risks related to possible benefits can be very different from their attitudes when it comes to risks connected with potential losses.
For instance, when subjects are presented a choice between getting $1000 with certainty or having a 50% chance for getting $2500, they will often well choose the certain $1000 rather than the uncertain chance of getting $2500 even though the analytical expectation of the uncertain option is $2500. This is a perfectly reasonable attitude that is referred to as risk aversion.
But Kahneman and Tversky also identified that the same people when confronted with a definite loss of $1000 compared to a 50% possibility of no loss or a certain loss of $2500 do often choose the risky option. This is referred to as risk seeking behaviour.
What this means for you in terms of your business negotiation or negotiation training is that it is really a good idea to tell your counterparts what they bear to do away with if they do not move in the direction that you are recommending. It is always best if you tell your counterparts what they stand to gain by shifting in your direction but the power of your argument will be improved if you could add to the advantages the specific things that they will lose out on if they do not shift in your direction.
This type of loss framing is most powerful if it is coupled with the Scarcity principle of influence that states that we associate more value to those things which are significantly less available. We should therefore concentrate on those things that are uniquely relevant to our own arguments and in addition to pointing out the benefits associated with moving in our direction we should always also explain the specific, unique things that our counterpart might stand to forfeit if they do not move in our direction.
Using negotiation skills such as loss framing to your advantage is one way which you could apply the concept of losing to assist you to win.
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