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Effective Negotiation Training Can Illustrate That Losing Can Be More Valuable Than Winning
People are not specially fond of losing. Everybody loves a winner and it is essential for us all to be on the winning side. As a matter of fact, it is so important for individuals to be on the winning side that research tells us that normally we have an incredibly an interesting approach to handling the possible risks.
In an area of research known as Prospect Theory, Kahneman and Tversky investigated the likely flaws and contradictions in human behaviour. They discovered that research individuals when offered a choice introduced in one way might display cautious conduct but when offered essentially the same option formulated in another way the same research subjects might display risk seeking behaviour.
An important result of the research performed by Kahneman and Tversky is that they discovered that people's attitudes towards risks associated with possible gains can be very unlike their attitudes when it comes to risks connected with potential losses.
For example, when people are given a choice between getting $1000 with confidence or having a 50% chance for getting $2500, they will often well choose the certain $1000 in preference to the uncertain possibility of getting $2500 even though the mathematical expectation of the uncertain option is $2500. This is a perfectly sensible attitude that is referred to as risk aversion.
But Kahneman and Tversky also discovered that the same people when confronted with a specific loss of $1000 compared to a 50% chance of no loss or a certain loss of $2500 do frequently choose the risky option. This is known as risk seeking behaviour.
What this means for you in the context of your business negotiation or negotiation training is the fact that it is a good idea to explain to your counterparts what they bear to do away with if they do not move in the direction that you are suggesting. It is definitely a good idea to tell your counterparts the things they stand to gain by shifting in your direction but the power of your argument will be enhanced if you could increase the benefits the specific things that they are going to lose out on if they do not shift in your direction.
This type of loss framing is most powerful if it is combined with the Scarcity concept of influence which states that we associate much more value to those things which are significantly less available. We should therefore focus on those things that are specifically associated with our own arguments and in addition to pointing out the advantages associated with moving in our direction we should always also mention the specific, unique things that our counterpart might stand to lose when they don't move in our direction.
Using negotiation skills such as loss framing to your benefit is one way which you could apply the concept of losing to assist you to win.
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