There’s a relatively new field of economics called Behavioural Finance which studies the influence of psychology on human behaviour in financial decision-making. It seeks to explain why we behave irrationally.
Interestingly, a similar type of irrationality can creep in when we negotiate. It starts with what psychologists call “heuristic cues”. We all use them because we’re wired to and they strongly influence our perceptions, interpretations and judgments.Read more