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Painting Pictures Improves Negotiation Effectiveness
How many times have you heard “A picture is worth a thousand words?” Interestingly, it’s largely true in the negotiation world.
Remember the last time you bought a car and the salesperson offered you an extended warranty? I doubt he appealed to your analytical abilities by quoting you the statistics and research on the actual likelihood that it would save you more than you spent on it.
Instead, he probably painted a vivid picture for you of one major repair job. “Just one pricey mechanical breakdown,” he might have said, “and you will have saved a ton of money. And of course, you also will have the security and peace of mind of knowing that it won’t break the bank.”
Our tendency to be unduly influenced by such visual, emotional and flashy language — essentially verbal pictures — and to be less influenced by dull, statistical evidence, is called “vividness bias.”
The result of this bias, as Harvard Business School Professor Max H. Bazerman notes in the school’s negotiation newsletter article, “What’s Really Relevant? The Role of Vivid Data in Negotiation,” is that “negotiators often underweight the attributes of a decision that will have the greatest impact on their personal happiness.”
What did the car salesman fail to discuss?
According to Bazerman’s article, most manufacturers’ warranties significantly overlap with extended warranties. And, according to information discovered in a lawsuit against Nissan, only $131 of the typical $795 extended warranty actually covered repairs to the vehicle. The rest went to the dealer as profit ($555) or to Nissan to cover administrative costs ($109). That’s quite a profit margin.
So what should you do about this bias? Here are a few of Bazerman’s suggestions, along with some of my own thoughts.
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Copyright © 2004, Marty Latz
Copyright © 2004, The Negotiator Magazine