success and failure

Why my husband keeps me away from the bargaining table.

All my life, I have been a terrible negotiator. I overpaid for everything, even though I have long understood, in principle, how a negotiation should be conducted. I know that you need to “drive a hard bargain” and “be willing to walk away from the table” if you want to get the best possible deal. I just never seemed to be able to do it, ever.

It’s reached the point that my husband forbids me from speaking whenever we are negotiating the price of a car, a home, or even a used toaster at the flea market. And while I wouldn’t usually take too kindly to being silenced, I have to admit that I see his point. In a negotiation, I am the weakest link.

In the past, I’ve always chalked it up to one fundamental problem: I fervently and rigidly conform to the social norm of reciprocity – that kindness should be repaid with kindness. Which sounds noble, but in my case it’s borderline dysfunctional. For instance, if the salesman shaved $100 off the price of a car, I felt that we should reciprocate his nice gesture by buying it. Somehow, the fact that the car remained overpriced by a few thousand dollars didn’t quite enter into it for me.

A recently published paper, however, has made me question this explanation, and realize that there may be more to my problem than just pathologically wanting to appear nice.

This set of studies showed that when people know that they are about to negotiate, they see that looming negotiation as either a threat or a challenge. People who see a negotiation as a threat experience greater stress, and they make less advantageous deals. Their poor performance is caused primarily by the fact that stressed negotiators behave more passively, and are less likely to use tough tactics aimed at gaining leverage, compared to the hard-ballers who feel negotiation to be more of a challenge than a threat.

This makes so much sense to me. My husband absolutely sees negotiating as a challenge. He believes he has the knowledge and the ability to succeed. He looks forward to a good haggle. I do not. Reading this paper, I realized that I have always seen negotiations as threatening, believing that I lacked whatever abilities good bargainers have. I believed I was doomed to fail, and just wanted it over with as quickly as possible. Why prolong a stressful, threatening situation, when you can throw in the towel and move on?

This is, of course, ridiculous. When I stop and really think about it, I see that I am perfectly capable of negotiating as well as the next guy. There’s nothing wrong with me. I’m not missing the bargaining gene. I’ve just always believed I wasn’t good at negotiating, and saw it as threatening, without ever really questioning whether or not that was actually true.

So, what do you do if, like me, you see negotiations as threats and opportunities for failure? Well, the first step is to realize that this is a self-fulfilling prophecy – believing that you lack the ability to succeed pretty much guarantees that you won’t. But now ask yourself, is it even true that I lack the ability to succeed in a negotiation? What do your fellow bargainers have that you don’ t have? The answer is almost certainly: nothing. They don’t have special abilities. They just believe in themselves. They believe they can drive the hard bargain. That’s what matters.

So whether he likes it or not, I’m joining my husband in our next negotiation. I see now that believing that I am a lousy negotiator has made that belief a reality, and I refuse to accept this lie any longer. Wait and see – I am going to get a great deal on our next toaster.

K. O’Connor, J. Arnold, & A. Maurizio (2010) The prospect of negotiating: Stress, cognitive appraisal, and performance. Journal of Experimental Social Psychology.

In prepared remarks before the panel investigating the roots of the financial crisis, former Federal Reserve Chairman Alan Greenspan blames the subprime crisis on foreign investors, nonbank lenders, the spread of securitized mortgages and financial firms for failing to manage their risk. The one person he did not blame was himself, or his institution — the Fed.

– Shahien Nasiripour, The Huffington Post, reporting on Greenspan’s testimony before the Financial Crisis Inquiry Commission on April 7, 2010

Despite the fact that the Federal Reserve, as the nation’s largest bank, with Alan Greenspan at its helm, did not take any significant action to curb the reckless lending that precipitated our current financial crisis, Greenspan apportioned blame everywhere but to himself. At one point in his testimony, he seemed to even blame the fall of the Berlin Wall. (His logic: seeing the truly awful job the Soviets were doing running their economy brought about distrust of “central planning” of any kind. So evidently, the excesses of Capitalism are Communism’s fault.)

Alan Greenspan was instrumental in determining U.S. financial policy for 19 years, but he somehow doesn’t feel he is responsible for the failure of the policy he helped create. Is he crazy? Actually, no. Is he consciously and willfully misleading the Commission (and the rest of us)? Very probably not. Without actually being Alan Greenspan, I can’t say for sure, but the odds are good that he really does believe he’s not to blame. And as much as we might like to think otherwise, we’d probably feel the same way if we were in his shoes.

Psychologists call this the self-serving bias – the tendency to see ourselves as responsible for our successes, but to see other people or the circumstances as responsible for our failures. We reason this way to protect our self-esteem, and to protect our image in the eyes of others. We also do it because it really feels right. Think of an actor on stage – as a member of the audience, you are focused on what he is doing, but if you’re the actor, you see everything but yourself. You see your fellow actors, the scenery, the audience, but you can’t actually watch you. Because of what’s called the actor/observer difference, it’s easy for Alan Greenspan to look back over his 19 years at the Fed and see all the factors that played a role in screwing things up, and harder for him to see his own role in it.

Psychologist Tony Greenwald’s 1980 American Psychologist article on this topic cited some very amusing examples of the self-serving bias, taken from a San Francisco Sunday Examiner and Chronicle article on the explanations drivers gave to their insurers after an accident. You’ll notice that some of these people went to remarkable lengths to deflect blame:

As I approached the intersection, a sign suddenly appeared in a place where a stop sign had never been before. I was unable to stop in time to avoid an accident.

The telephone pole was approaching. I was attempting to swerve out of its way when it struck my front end.

A pedestrian hit me and went under my car.

My car was legally parked as it backed into the other vehicle.

Studies show that in fact, nearly all of us fall victim to this kind of bias (though we tend to think that only other people do – yet another example of the bias at work.)

The upside of all this self-protection is that we don’t feel so bad when things go wrong, and can stay optimistic about our future chances for success. The downside is that we don’t learn anything from our mistakes if we don’t recognize that we made them in the first place. How can you do a better job next time if you won’t even admit you did a bad job this time? Placing blame for your failures outside of yourself can also leave you feeling powerless and unable to make an impact in the future.

From a motivational perspective, the best way to handle a failure is to look honestly at how your own actions contributed to the outcome, emphasizing what you can change so that your performance improves from now on. And even though, at 84, Alan Greenspan is unlikely to serve a second round as Fed Chairman, he would probably like to get an accurate handle on what went wrong – something he will never do unless he admits that he was actually driving.

A. Greenwald (1980). The totalitarian ego: Fabrication and revision of personal history. American Psychologist, 35, 603-618.

Getting A Good Deal

In Failure, We Are All Alan Greenspan