They saw a negotiation: Partisan and non-partisan perspectives, Journal of Personality and Social Psychology
The incompatibility error is the belief that the other party's interests are completely opposed to one's own in a negotiation situation, when in fact, the other party's interests are completely compatible with one's own. In Experiment 1, partisan and nonpartisan observers viewed a negotiation. Nonpartisan observers were more likely to detect compatible interests than the actual negotiators. In Experiment 2, high involvement worsened judgment accuracy among partisan observers but improved judgment accuracy among nonpartisan observers. Experiment 3 replicated the findings of Experiment 2: Nonpartisan observers made more accurate judgments when they were accountable than when they were not accountable; however, partisan observers made less accurate judgments when they were accountable than when they were not accountable. Partisans who were not accountable expressed the most confidence in their judgments. Partisans tended to judge their party to be more friendly than the other party; nonpartisans were more evenhanded in their judgments. There were no differences in recall of the videotaped interaction.
Thompson, Leigh. 1995. They saw a negotiation: Partisan and non-partisan perspectives. Journal of Personality and Social Psychology. 68(5): 839-853.