A New Perspective to Resolve Behavioral Biases in Business Negotiation: Dao

Abstract

In business negotiations, negotiators’ behavioral biases can lead to irrational negotiation performance and further injure long-term business development. Dao, an ancient Chinese philosophical theory, can provide negotiators with a new perspective on considering reasons and solutions to behavioral biases by analyzing complex situations in business negotiation in a more comprehensive and objective manner. A feature of Dao is Yin Yang, and the essence of Dao is composed of causality and unforeseen events. Causality is not always apparent. According to the Dao framework, the combination of the mix of ‘Yin and Yang,’ ‘broader effects,’ the time gap between cause and effect, and unforeseen events in business negotiation can distort negotiators’ perspectives and lead to behavioral biases. This article discusses the formation of behavioral biases from the perspective of Dao and how to reduce the biases in business negotiations according to the wisdom of Dao.