Analogical encoding facilitates knowledge transfer in negotiation.

Information learned in one situation often fails to transfer to a similarly structured situation. However, prior findings suggest that comparing two or more instances that embody the same principle can promote abstraction of a schema that can be transferred to new situations. In two lines of research, we examined the effects of analogical encoding on knowledge transfer in negotiation situations. In Experiment 1, undergraduates were more likely to propose optimal negotiation strategies and less likely to propose compromises (a suboptimal strategy) when they received analogy training. In Experiment 2, graduate management students who drew an analogy from two cases were nearly three times more likely to incorporate the strategy from the training cases into their negotiations than were students given the same cases separately. For both novices and experienced participants, the comparison process can be an efficient means of abstracting principles for later application.