According to most negotiation experts, thorough preparation is the key to successful bargaining. Identifying your interests, alternatives, walkaway point, and ideal outcome — not to mention your opponent's interests, alternatives, and so on — can help you perform at your best once talks begin. The more you know about yourself and your counterpart, the more control you'll have during the negotiation process.
Yet there's a significant impediment to this preparation process: egocentrism, or the tendency to have an overly positive view of our abilities and our future. Two-thirds of our MBA students, for example, typically think their decision-making abilities rank above the class average. And when U.S. News & World Report surveyed Americans in 1997 about their odds of going to heaven, most believed they had a better chance at personal salvation than Mother Teresa!
How might unwarranted optimism affect your negotiations? Imagine that in four weeks, you'll be bargaining with someone who you've heard is very competitive. Will you give in to this negotiator's demands or match her fierceness? In our studies with Ann Tenbrunsel of the University of Notre Dame, we found that MBA students planned to go toe-to-toe with a competitive opponent. Yet when the time came to negotiate, these students became concessionary, agreeing to unfavorable outcomes.
From the distance of time, these negotiators predicted they would be lions that roar, but they became whimpering mice in the heat of the moment. We'll explain why most people have trouble predicting their negotiation behavior and identify the negative consequences of overconfident forecasts. By training yourself to behave the way you want to behave, you can improve the accuracy of your forecasts as well as your negotiated outcomes.