Assumption is the mother of all…mishaps

Does this sound familiar: “I think you will find our offer most generous…”

You might be thinking: Ah-hah, they think they are getting this for a bargain, well I don’t think so!

Or this: “As generous as it may be, your offer still fails to take into account x and y, which is the true value of the product.”

You: Hm, they think we want their product for x and y, while what we really want it for is z, but not for the price he is asking.

Or this: “Look, this is my final offer. I really don’t have authorisation to offer you more and I’m sure my boss won’t either as he is negotiating potential alternatives as we speak…”

You: Ooh, stingy and bringing out fake alternatives. Well, two can play that game, the more so that our alternatives are real.

Or this: “Well, why don’t you go and ask him if he can raise his offer, because we have other buyers that are currently outbidding you.”

You/me/anyone else listening: Hm, as we are bluffing about alternatives, they must be, too….

And so the deal does not happen as one party does not raise their offer – they incorrectly assumed that because they were bluffing, the other side was as well. The seller ends up selling to another buyer for a higher price.

What is the ladder of inference? Simply put – our beliefs make us attribute our own meaning to the data and experience which we select to believe and based on this we draw conclusions and take action. Basically, based on our experience we can jump to the right or sometimes also the wrong conclusions like put 2 and 2 together and get 5. (For more complex models and schematics, search Chris Argyris and ladder of inference.)