Chapter One

Less is More: The Surprising Truth About Option Generation in Negotiation

Negotiation is, at its core, about making decisions. Before reaching any decision, parties often spend time exploring all possible options. These "options" are different ways to reach an agreement or resolve a conflict. While generating options is a crucial step in decision-making and problem-solving, it surprisingly receives little attention in negotiation literature. It is often praised as indispensable in conflict resolution, but many still consider it "not a well-understood phenomenon." Research has primarily focused on evaluating and selecting options, not on where these options originate.

What is Option Generation?

 Option generation is the process of creating new and creative courses of action. It involves effort and creativity, such as recognizing a strategy that worked in another context and adapting it to the current situation. Roger Fisher and William Ury, pioneers in negotiation theory, describe this as "inventing options for mutual gains." Some others refer to it as "expanding the pie." However, generating options isn't just about coming up with more choices. It can involve identifying the most effective strategies for the best outcomes.

 The Dark Side of Generating Too Many Options

 While negotiation literature often encourages brainstorming alternative solutions, generating too many options can lead to poorer decisions. This chapter argues that there is a negative relationship between the number of options and the quality of choice: "Less is more." Instead of aiming for as many options as possible, it's better to limit the search. Real-world decision-makers have finite time, knowledge, and resources to invest in any given decision.

 Models of Intuitive Decision Making: Why Fewer Options Work Better

 Several models illustrate that generating fewer options can be more effective:

 1. Recognition-Primed Decision Model: Pioneered by Gary Klein, this model shows how experienced decision-makers use their knowledge and experience to quickly identify acceptable actions. They often go with the first option they consider because it is usually satisfactory, avoiding the need to generate more.

 2. Take The First Heuristic: This model, developed by Joseph Johnson and Markus Raab, suggests that the first generated option is often one of the best. Take The First “utilizes the principles of associative memory networks in conjunction with the rules of fast and frugal heuristics.” It predicts human behavior and result in high-quality choices. Take The First promotes that generating fewer options may actually be better than generating more. And the first ones generated from those options will likely be one of the best.

 3. Long Term Working Memory Model: Similar to the models above, this model shows that “experts” tend to generate fewer options but differ in that the best choice may be found later among those few options.

 4. Bounded Rationality: Introduced by Herbert Simon, this theory proposes that real decision-makers operate within the limits of their knowledge and resources. Instead of seeking the perfect choice, they settle for a "satisficing" option—one that is good enough under the circumstances.

 The Pitfalls of Extensive Option Generation

 Studies reveal that generating too many options can lead to decision fatigue and confusion. For example, experiments with handball players and chess players found that the most skilled participants generated fewer options and were more decisive. The quality of their decisions decreased as they considered more options.

 How Much is Too Much?

 Determining how many options are "too many" isn't straightforward. Psychologists Sheena Iyengar and Mark Lepper's research on choice overload shows that the ideal number of options varies based on the decision-maker's experience and the complexity of the choice. When negotiators perceive their choices as limited and manageable, they tend to feel more comfortable and make better decisions.

 Conclusion: The Power of Less

 Fewer options can lead to better decisions. Rather than brainstorming as many options as possible, negotiators should focus on generating a few high-quality options or strategically selecting the best one early on. This counterintuitive approach challenges traditional negotiation practices but promises more efficient and effective decision-making.

REFERENCES

1. Ury, Roger, and William Fisher. Getting to Yes: Negotiating Agreement Without Giving In. Penguin Books, 1981.

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3. Johnson, Joseph G., and Markus Raab. "Take the First: Option-Generation and Resulting Choices." Organizational Behavior and Human Decision Processes, vol. 91, no. 2, 2003, pp. 215-229.

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7. Lum, Grande, Irma Tyler-Wood, and John Anthony Wanis-St. Expand the Pie: How to Add Value to Any Negotiation. Castle Pacific Publishing, 2003. See also Basadur, Min, et al. "Collaborative Problem Solving Through Creativity in Problem Definition: Expanding the Pie." Creativity and Innovation Management, vol. 9, no. 1, 2000, pp. 54-76; Jap, Sandy D. "Pie-Expansion Efforts: Collaboration Processes in Buyer-Supplier Relationships." Journal of Marketing Research, 1999, pp. 461-475.

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20. Elster, Jon. Ulysses and the Sirens: Studies in Rationality and Irrationality. Cambridge UP, 1979. Cited in Gigerenzer & Todd, Simple Heuristics That Make Us Smart, 1999.

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23. Gigerenzer, Gerd, and Reinhard Selten, eds. Bounded Rationality: The Adaptive Toolbox. MIT Press, 2002.