Workshop – Biases and Heuristics in Negotiation
On October 8, the student affinity group Bucerius Rational Think Tank started the new academic year with a workshop on the effects of cognitive dynamics in negotiations. Philip Hattemer (alumnus of year 2015) spoke as guest speaker to 27 guests. In his lecture, he demonstrated the boundaries of rational behavior of everyone inside the room using the Ultimatum Game (Güth et al. (1982)) and the case "Steve" (cf. Kahnemann (2011)). He then opened rational solutions to the given problems, namely the Bernoulli Principle and Bayesian Rationality. Based on the two systems of the mind, Philip explained how heuristics lead to biases – and how these biases can have effect on legal professionals in their daily practice.
In the main part, Philip explained in detail how selected biases influence decisions and estimates during a negotiation. A special emphasis was put on strategies to use cognitive dynamics to optimize negotiation results, as well as debiasing techniques. He covered the Anchoring Effect, Certainty Effect, Sunk Costs Fallacy/Escalation of Commitment, as well as the Loss Aversion. The participants then had been given the opportunity to use their gained knowledge in a final negotiation scenario.
The Bucerius Rational Think Tank connects students with a penchant for behavioral law and economics and is part of the Rational Think Tank’s network. The Rational Think Tank e.V. was founded in 2016 by students of Bucerius Law School and legal professionals from all over Germany. The NPO quickly gained reputation and has now a network of followers in 44 different countries worldwide. Although the project’s main objective is to spread knowledge on the effect of cognitive biases in the legal sector, the members vary in diverse backgrounds. The Bucerius Rational Think Tank, however, remains one of the core pillars of the network, spreading behavioral laws and economics at the campus.