The Stories Negotiators Tell and Their Effects on Deal-Making

People structure and streamline their interactions with others by embellishing on the available data. In a series of projects, we explore a few ways this approach to navigating social interactions comes to life in negotiations. Not surprisingly, negotiators fill the gaps in their knowledge by drawing various inferences about their counterparts. We examine the origins of these inferences and illustrate the effect they have on deal terms and interpersonal outcomes. In a first project, we show negotiators infer how knowledgeable a counterpart is from the precision of his or her initial offer. This inference, in turn, shapes final settlements. In a second project, we show negotiators infer how a counterpart will react to possible counteroffers from the form (point vs. range) that the counterpart’s initial offer takes. These inferred reactions, in turn, shape final settlements and interpersonal outcomes. We argue that adopting a social attribution lens to study negotiations might call attention to new inferential processes that have consequences for deal-making