Improving the future by considering the past: The impact of upward counterfactual reflection and implicit beliefs on negotiation performance

Reflecting on previous experiences and considering how things could have been better (upward counterfactual reflection) is central to learning. While researchers have identified a number of situational antecedents to upward counterfactual generation, less is known about individual differences in counterfactual reflection. We address this gap by considering how implicit beliefs regarding the fixedness or malleability of basic characteristics influence counterfactual generation. In a negotiation context, we show that individuals who believe that negotiation ability is changeable are more likely to consider how things could have been better following a negotiation experience compared to individuals who believe that negotiation ability is fixed. We further demonstrate the impact of upward counterfactual reflection on learning and performance: Negotiators who hold malleable beliefs are better able to discover creative agreements that benefit both parties in a negotiation, and these performance differences are mediated by upward counterfactual generation.