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I wrote recently about the impact of the anchoring effect on mediation. Improving Results in Mediation: Should the Defense Request a Pre-Mediation Demand? I wrote that human beings tend to rely too heavily on the first piece of information they receive when making decisions. This is known as the anchoring effect, and that first piece

The study of human decision-making holds important lessons for people involved in all types of negotiations, including mediation. Learning the ropes will help the attorneys and their clients achieve better results in mediation. Employee E sues her former employer, Company C, alleging harassment, discrimination, and retaliation. Company C answers, and the parties conduct discovery and

Daniel Kahneman and Amos Tversky revolutionized economics by changing the focus from hypothetical “rational actors” to real people, who frequently make bad decisions as a result of behavioral patterns and cognitive errors of which they are not aware. Learning to recognize these patterns and errors will help you be more successful in all decision-making processes and in

Very frequently, the parties to a negotiation will set reference points that do not overlap or allow for easy resolution. The plaintiff may have a bottom line of $200,000, while the defendant has a top dollar of $100,000. The likelihood of mutually exclusive reference points is greater in employment lawsuits, which frequently are zero-sum-games. A

We have seen that behavioral economics holds valuable insights into the way that people make decisions. Specifically, behavioral economics teaches that behavioral patterns and cognitive errors play a tremendously important, if seldom recognized, role in decision-making. Now we get to the fun part: learning to use behavioral economics to help our clients and ourselves make better

A third principle of Daniel Kahneman’s work, together with the idea that people evaluate losses and gains relative to their reference points (discussed here) and the idea that people have a diminishing sensitivity to losses and gains (discussed here), is the idea that losses loom larger than gains. Kahneman traces this to the evolutionary need