A632.4.4.RB Deception in Negotiations

During the course of negotiations, people often misrepresent information to gain at least a temporary advantage. For example, a seller may fabricate existence of another interested buyer or a buyer may misrepresent the price and availability of an item from a different vendor. Reflect on deceptions in negotiations and describe four ways to reduce your vulnerability to deception during negotiations. Relate an example of a recent negotiation in which you were misled and one in which you may have overstated a claim. In the case of the overstatement, how far would you have gone, or did you actually go, to leverage your position?

Everyone lies. In fact lying is actually a part of our cognitive development as children (Vitelli, 2013). Since lying is a natural part of human behavior, how do we protect ourselves from lies and deceptions when the stakes are high while negotiating deals? In looking at negotiating, I think one of the most important steps someone can take to defend against deception is to do their research. For example, when buying a car it would be beneficial to see what competitor prices are to see if I am getting a fair deal. In high stakes negotiation research also allows the negotiator to prepare carefully for the negotiation (Hoch, 2001). “When confronted with a difficult or unexpected question, many negotiators become anxious and use deception.” (Hoch, 2001, p. 199). By researching I can be prepared to answer these tough questions, or you can ask these questions to gage if the other side is being honest, and to show their vulnerabilities. Another way to reduce deception in negotiations is to evaluate their motives (Hoch, 2001). By asking, “What’s in it for them?” I can evaluate their possible hidden goals and incentives that the other side has for making the deal (Hoch, 2001). A third way to avoid deception is to pay attention to nonverbal cues (Hoch, 2001). Although it can be very difficult to detect deception through nonverbal cues (Hoch, 2001) the fidgeting, or excessive hand gestures may be an indicator that they are lying. The last technique is to never make a quick deal (McCarthy, 2013). Although in today’s complex, technological age some deals have to be made very quickly (Hoch, 2001) it is important to mind the tempo of the deal to insure that I am staying in control (McCarthy, 2013). Alan McCarthy (2013) points out that if the other side is suddenly speeding up the tempo of the negotiation and applying it is because they have either made a big mistake, or they have caught you in a big mistake and want your signature on the contract.

A Negotiating Where I was Mislead

Several years ago my husband and I decided to refinance our house. When it comes to these types of tasks I usually allow my husband to handle everything because he has more experience and knowledge in this area. At first everything was going smoothly, but then my husband came down on orders to deploy. As a result, I was left with the task of managing the refinance. At one stage I was provided a document that stated I had until “X” date to sign to lock into their given interest rate. However, shortly after being given the document I was getting emails pressuring me to sign the document. I had several other questions from research that I had done about the contract and felt that information was missing. When I asked direct questions I was given vague answers.  At one point I said, “I still have three weeks before I have to sign the document to lock into the interest rate. Why do you want me to sign the document today?”  Their response was that they wanted us to get the best deal possible. With the alarm bells going off in my head I sent the paperwork to my aunt who is a real-estate agent. She told me that she had some major concerns about the contract and not to sign until other documents were provided. Long story short, I sent an email to the agent stating that I had sought legal advice; listed the documents that my aunt mentioned, and told him that I wasn’t signing anything until they were provided. Two minutes later I received a phone call and the agent said, “I don’t think you understand what you are doing because your husband isn’t there to help you. I also don’t recommend the lawyer that you talked to because they clearly don’t know how this works.” At this point I told the agent that he had insulted my intelligence and that I felt that he was being deceitful and as a result the deal was over.

Looking back, I intentionally overstated my claim on seeking legal advice. At that point in time it was a test of their character and honesty. I felt that if they were honest and knew I had sought legal advice they would slow things down, start answering my questions and provide me with everything I needed. If they were dishonest they would continue to pressure me and possibly dissuade me from speaking to others…which they did. In this way I used McCarthy’s (2013) advice and realized that there was a high probability that I was being deceived because they wanted to speed up the negotiation process for no reason. I also used Hoch’s (2001) advice by doing some research and being prepared. I read a lot of different articles and did a lot of research on refinancing to help me understand what each document was saying. It was through this process that I started having my initial questions. By taking some of these steps to detect deceit I was able to withdraw from a potentially very bad deal. When my husband came back from deployment we found a different refinance company to go through. We ended up with an even lower interest rate, the process was streamlined, and they answered all of our questions.

A Negotiation Where I Overstated a Claim

            I haven’t done formal negotiations in a work setting before, but I do a lot of haggling when I go to flea markets and garage sales to purchase furniture to reclaim. I love hunting for that deal, and I’ve found that I use some of Alan McCarthy’s tips when haggling on prices. These are obviously not highs take deals and are usually under $100 so there isn’t really a need for me to overstate a claim. Since there isn’t a major cost or benefit to me lying or overstating a claim, I am much less likely to use these tactics to negotiate deals (Hoch, 2001). One tactic I’ve used is before entering a deal I set my top price in my mind and then pull the cash from my purse and put it in my pocket. As I start to haggle with the seller, if we are on the fence about the price and they are pushing me to go slightly above my top dollar I will pull the cash from my pocket to show them and say something like, “I have $50 cash that I can give you to take that item off of your hands.” In reality I usually have more cash in my purse, but I insinuate that I only have the $50 to incentivize them to lower their price by $5-$10 for me to get the deal I want. In this way I am exploiting the emotional effect that it is better to have $50 now than to perceive the loss of $50 (Gilbert, 2005). I don’t often resort to this tactic and I only do it if I feel that the seller will take it. This is based off of a gut instinct and reading their body language that they are on the fence over the price. As far as deception within negotiation this is my most deceiving tactic that I am willing to use. Although I’ve never had a seller turn me down using this tactic if they did, I would probably walk away from the deal or give them the extra money depending on how much I wanted the item.

References:

Gilbert, Dan. (July 2005). Why We Make Bad Decisions. Retrieved from https://www.ted.com/talks/dan_gilbert_researches_happiness. 

Hoch, S. J., & Kunreuther, H. C. (2001). Wharton on making decisions. (1st edition.). Hoboken, NJ: John Wiley & Sons Inc.

McCarthy, Alan. (24 September 2013). Ten Top Tips for Negotiation. Retrieved from https://www.youtube.com/watch?v=n-l_Aj0_MBc.

Vitelli, Romeo. (11 November 2013). When Does Lying Begin? Psychology Today. Retrieved from https://www.psychologytoday.com/us/blog/media-spotlight/201311/when-does-lying-begin.