Last week, I talked about some of the limitations of using Getting to Yes when negotiating class actions. But Getting to Yes has other limitations as well, ones well worth lawyers’ consideration. For example, in his 2003 article: Panacea or Pandora’s Box?: The Costs of Options in Negotiation, Vanderbilt Professor Chris Guthrie takes on the question of just how useful generating new options (or "creating value") can be in negotiation. His answer is that it’s less useful than one might think.

Relying on existing experimental research, new experimental research, and "real-world" empirical evidence, the Article identifies four potential costs associated with option generation: option devaluation, context dependence (both contrast and compromise), non-compensatory decision making, and decision regret. Taken together, these "option costs" stand for the ironic proposition that negotiators who heed the option-generation prescription may be more likely than those who ignore it to enter into inferior agreements with which they may be less satisfied. In short, option generation may not be the panacea its proponents imagine, but rather a Pandora’s box that can lead negotiators astray.

(Emphasis added.)  So how exactly do these four "option costs" work?

1. Option devaluation. Basically, the more options one offers, the less attractive any option will seem.

Because the process of comparison brings to mind the relative advantages and disadvantages of the options under consideration, and because each option’s disadvantages are likely to loom larger than its advantages, loss aversion implies that comparisons will decrease the attractiveness of every option under consideration.

2. Context dependence. A more generalized form of his first cost, context dependence means that negotiators do not evaluate options in a vacuum; instead, they compare them against the other options they face. (See how that includes the first "option cost"?)

Psychologists have discovered, however, that people’s assessments of initially considered options are often systematically influenced by the emergence of an additional, irrelevant option. People "make context-based inferences about the worth of alternatives whether or not the context provides a valid basis for such inferences."

This effect means that once there are multiple options on the table, it becomes easier to manipulate your counterpart’s decisions by introducing options that–while not strictly relevant–will sway them towards options more favorable to you, either by making them seem more attractive by contrast, or by making them seem like a reasonable compromise.

3. Non-compensatory decision making. This is a way of saying that, confronted with lots of options, people do not act like rational maximizers.

When several options are available, negotiators may make decisions based not on an evaluation of all available information (compensatory decision making), but rather on the basis of a simplified decision-making process (non-compensatory decision making).

I’ve discussed some of these forms of decision making before.  It’s worth noting that Guthrie may be underestimating their effects. Non-compensatory decision making occurs frequently, not just when one is confronted with multiple options.

4. Decision regret. What is decision regret?

For every yes there must be a no. To decide one thing always means to relinquish something else. As one therapist commented to an indecisive patient, "Decisions are very expensive, they cost you everything else." Renunciation invariably accompanies decision. One must relinquish options, often options that will never come again.

In other words, decision regret is an extreme form of buyer’s remorse. The more options there are in a negotiation, the more likely the negotiator will be dissatisfied with her decision, because she will be looking back at those options she decided against with rose-colored glasses.

Guthrie’s takeaway from this–and remember, he’s a law professor–is that you should always involve a lawyer in negotiations that might involve multiple options.

Lawyers are more likely than others to use compensatory rules when assessing negotiation options because lawyers are among the more rational and analytical members of society. Researchers have used psychological tests like the Myers-Briggs Type Indicator (MBTI) [], as well as brain-dominance testing [] instruments, to demonstrate this analytical orientation. Indeed, neuroscientists have "selected lawyers when they wished to test an occupational group that is characteristically analytical in its preferred mode of thought." This is not to say, of course, that lawyers are pure "rational actors" who are impervious to the effects of psychological "biases" in decision making; in fact, lawyers, like other novice and expert decision makers, are susceptible to such biases. However, experimental evidence suggests that lawyers are more likely than others to be able to resist these biases and make decisions rationally.

Personally, I think this may be overestimating the rationality of lawyers.  However, Guthrie’s point may work better if it’s made simpler–when confronted with multiple options in a negotiation, it is worth consulting a neutral, relatively objective third party. They may not be more "rational" than other human beings, but they won’t be as invested in the specific decision, and that should provide the detached double-check the negotiator needs.