Overconfidence and the Illusion of Superiority in Negotiation

Civil Negotiation and Mediation by Nancy Hudgins

Multiple studies have shown that lawyers (and parties) are overly-confident that their side will prevail at trial. This belief tends to foster hard bargaining (which can be successful, but can also lead to impasse). The trick, obviously, in a case you want to settle, is not to bargain too hard.

One such study asked negotiators on each side of a case how likely they thought their side would prevail at trial. Each side said 64%. This, of course, is a mathematical impossibility!

Harvard Business School professors Malhotra and Bazerman, in Negotiation Genius, write:

“Negotiators not only see their future prospects as better than they actually are, they also see themselves as better than a realistic assessment would suggest.”

They note that positive illusions work for quarterbacks and salespeople because they are implementing decisions. Negotiators, on the other hand, are making decisions, both before and during the negotiation.

To balance the psychological need to see ourselves (and our negotiation strategies) in a positive light, Malhotra and Bazerman suggest taking an outsider to the negotiation, to act as a more realistic interpreter of the negotiation moves and likely outcomes, or, to ask ourselves, if we were outsiders looking at the negotiation, how would we perceive it?

If you are knowingly taking a hard negotiating position for a strategic purpose, that’s one thing; unwittingly over-selling your position to yourself and your client, that’s a situation to avoid.

                        author

Nancy Hudgins

Nancy Hudgins, a San Francisco mediator and lawyer, began specializing in civil litigation in the 1970's. She has represented both plaintiffs and defendants, chiefly in personal injury, medical malpractice, elder abuse and product liability lawsuits, but also in a wide variety of complex litigation, including civil rights, fraud and class… MORE >

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