Anchors Aweigh, My Boys, Anchors Aweigh!

What does the US Navy have in common with parties in mediation? They both have biases towards anchors!

In negotiations, an anchoring bias is “a cognitive bias that causes us to rely too heavily on the first piece of information we are given about a subject. When we are setting plans or making estimates about something, we filter new data from the perspective of our anchor, instead of viewing it objectively.”

An anchoring bias can be either beneficial or detrimental. If that first piece of information is outrageous, than it can cause a party to become firmly entrenched and unwilling to make any significant moves. But if the first piece is more realistic, though, it can be used to massage the Zone of Possible Agreement (ZOPA).

Additionally, as counsel, it’s important to recognize that (1) you may have an anchoring bias yourself and (2) you client probably has an anchoring bias. So, for effective negotiations, counsel has to remain as objective as possible but, more to the point, counsel has to help clients work through that bias. There is a reason why attorneys are also referred to as counselors and this is one of them. Counsel has to recognize a client’s bias and overcome it in order to provide the best possible services.

For more on this, check out ADR Times’ great article by clicking here.