Cognitive Biases in Negotiation: a Two-Party Negotiation Experiment

Abstract

The purpose of this master thesis is to investigate the role of cognitive biases in negotiations. It is achieved through performing an experiment where a two-party negotiation is conducted. Following a predefined framework, two people have a limited amount of time to reach an agreement over a specific issue. An analysis of the results is operated to effectively find and interpret which biases have emerged and how different styles of negotiation can lead to different agreements between the parties. To better interpret the results of the aforementioned experiment, negotiation literature is previously reviewed. Specifically, negotiation definition, strategies and theories are addressed. Due to the fundamental role that cognitive biases play in this experiment, the most important ones are defined, described and illustrated. The thesis is thought to have used existing knowledge across the topics of negotiation and cognitive biases, while also suggesting future experiments and areas of research.