The Role of Hope in Negotiation

Abstract

Economic models of bargaining do not include a role for "hope" or "aspiration." This article offers two theories of hope that go beyond the redundant or ad hoc use of the term that one finds in the negotiation literature.

The first, a "Satiation" theory of hope, asserts (contrary to economists' assumptions) that a negotiator's marginal utility is not constant. If there is a punctuated decrease in marginal utility-a "satiation point"-the negotiator will not negotiate very hard (if at all) to extract value beyond this point. Hope or aspiration thus becomes an outer limit on the negotiator's desires.

A second theory of hope, dubbed an "Optimism" theory, views hope as a cognitive distortion upsetting the usual economic assumption that negotiators are rational actors.

Hope distorts negotiators' estimations of any or all of the primitives of bargaining (e.g. either side's BATNA, costs of bargaining, etc.). This distortion is not always dysfunctional, however, because it may counteract other dynamics-including other cognitive distortions-that would work against settlement.

Indeed, I argue that under a theory of optimism or satiation, hope can facilitate integrative bargaining. If this is true, some negotiators should try to raise rather than lower the hopes of the other party.

Note: 12-15-98: too old to publish in Micro--carrie