In this chapter we have taken a multifaceted look at the role of perception, cognition, and emotion in negotiation. The first portion of the chapter presented a brief overview of the perceptual process and discussed four types of perceptual distortions: stereotyping, halo effects, selective perception, and projection. We then turned to a discussion of how framing influences perceptions in negotiation and how reframing and issue development both change negotiator perceptions during negotiations.

The chapter then reviewed the research findings from one of the most important recent areas of inquiry in negotiation, that of cognitive biases in negotiation. The effects of 12 different cognitive biases were discussed: irrational escalation of commitment, mythical fixed-pie beliefs, anchoring and adjustment, framing, availability of information, the winner's curse, overconfidence, the law of small numbers, self-serving biases, endowment effects, ignoring others' cognitions, and reactive devaluation. This was followed by consideration of ways to manage misperception and cognitive biases in negotiation, an area that has received relatively little research attention. In a final section of the chapter we considered mood and emotion in negotiation, which provides an important alternative to cognitive and perceptual processes for understanding negotiation behavior.