An offer “anchors” a negotiation when it exerts a meaningful pull on a counterpart’s thinking and the negotiated settlement. A great deal of research suggests that opening offers often anchor negotiations, frequently influencing settlements and leading to a persuasion gain with a counterpart.
The Attitudes Assessment gauges how people think and feel about negotiation, including their anxiety and comfort. Users answer a handful of questions and then immediately receive an individualized report, benchmarking their attitudes against others and offering tailored suggestions for action.
In the fall of 1978, US President Jimmy Carter facilitated peace talks between Egyptian President Anwar El Sadat and Israeli Prime Minister Menachem Begin at Camp David, a country retreat in Maryland. In advance of the meeting, Carter’s team, including National Security Advisor Zbigniew Brzezinski, invested a great deal of energy in understanding Sadat and Begin, preparation that Carter’s credits as contributing to the eventual success of the talks. See our episode "Gearing Up for Camp David"
Channels are how negotiators communicate with one another, such as face-to-face, by phone, over email, and so forth. See the Process Drama.
Claiming value involves the share of total value that goes to a particular negotiator. This is sometimes described as dividing or slicing the pie. If a seller is willing to accept as little as $100 for an object but a buyer would pay up to $150 for it, there is $50 in total value to be claimed. If a deal was struck as $130, we could say the seller claimed $30 of the value and the buyer claimed $20. See Episode 4, "The Dealmaker’s Dilemma."
A comparable is another deal or transaction that has some relevance to a given negotiation. Someone buying a house, for instance, would look at the recent sales prices of similar homes in the area. These comparables might shape the buyer’s offer and limit and may even be discussed with the seller during the course of negotiations.
When a negotiator and their counterpart have similar or aligned interests on a particular outcome. For instance, in a job negotiation, both the candidate and the organization might want the earliest possible start date. This stands in contrast to fixed pie issues, where the two sides want something more like opposite outcomes, such as a job candidate seeking the highest possible salary and an organization hoping to pay the lower possible salary. Compatible issues are one kind of issue that might be in the issue mix of a negotiation. See Episode 4, "The Dealmaker’s Dilemma."
Creating value involves expanding the collective value in the deal available to both sides. This is sometimes described as growing the pie. One way to create overall value in a negotiation is by trading lopsided priorities: when one side values an issue much less than the other side, they could offer a concession on that issue, making a modest sacrifice to create a good deal of value to their counterpart, and then asking for something in return. See Episode 4, "The Dealmaker’s Dilemma."
A deal term is a location or potential outcome on a dimension or issue being negotiated. In a renovation negotiation between a homeowner and a contractor, issues might include price and duration of the project. On the price issue, deal terms could be $8,000 or $10,000. On the duration issue, deal terms could be 8 days or 12 days.
Most negotiations involve a balancing act between creating value (growing the pie; making moves that could leave both sides better off) and claiming value (taking a bigger slice of the pie; making moves that claim better terms for oneself). Sometimes focusing on claiming a bigger slice of the pie can make it harder to effectively grow it, and vice versa … a tension we call the Dealmaker’s Dilemma. There’s no magical solution to this dilemma. How you approach it depends upon your definition of success for a given negotiation. See Episode 4, "The Dealmaker’s Dilemma."
Definition of Success
A definition of success involves clarifying what you most want to achieve and avoid in general terms in a negotiation. This can yield something like a mission statement for bargaining. It often involves some combination of general factors such as economic outcomes and relationship outcomes. This is a big picture component of the Private Drama and can lay the groundwork for more specific preparation about preferences and priorities across issues. See our episode, "Defining Success."
Part of a negotiator’s information strategy that involves the way in which a negotiator frames and characterizes their proposal (including the account or rationale they give for their proposal). Effective “describing” can lead to a persuasion gain. See the episode “Preparing to Divulge and Describe (Craft an information strategy, Part 2).”
Part of a negotiator’s information strategy that involves what is learned during, and in advance of, bargaining (including questions a negotiator might ask a counterpart). Effective “discovery” involves an information gain. See the Discovery Agenda worksheet and the episode “Preparing to Discover (Craft an information strategy, Part 1).”
Part of a negotiator’s information strategy that involves what information is shared and how, and what information is held back, during the course of bargaining. To prepare for this, many effective negotiators think carefully about what questions a counterpart might ask them--and how they should respond. See the Action/Reaction worksheet and the episode “Preparing to Divulge and Describe (Craft an information strategy, Part 2).”
Fixed pie issue
A fixed pie issue is a dimension of a negotiation where the two sides want something like opposite outcomes. For instance, buyers generally want to pay as little as possible whereas sellers want to be paid as much as possible. The only way for a buyer to get additional value on the price issue is for the seller to give up value on that issue, and vice versa. This might also be called a zero-sum issue. Fixed pie issues are one kind of issue that might be in the issue mix of a negotiation. See Episode 4, "The Dealmaker’s Dilemma."
The Habits and Practices Assessment gauges how people behave before and during potentially important negotiation and bargaining situations. Users answer questions about their typical behaviors and then immediately receive an individualized report, benchmarking their behaviors against others and offering tailored suggestions for action.
When a bargainer learns valuable information about their counterpart or the negotiation. Hearing a counterpart’s opening offer can be one route to information gain about their perspective and limits, but this can also lead to persuasion gain for the counterpart if their offer anchors the discussion and terms.
An information strategy reflects preparation for the negotiation conversation, the exchange of information and inquiries that often surrounds bargaining. This can involve preparing to discover or learn things about your counterpart and their situation, preparing to divulge (or hold back) certain information about yourself and your situation, and preparing to describe your offers and proposals in a way that makes them compelling. See our episodes, "Preparing to Discover" and "Preparing to Divulge and Describe."
Interests are a negotiator’s real underlying goals and the problems they’re trying to solve. We can think of interests in contrast to positions, the deal terms people propose or the things they say they want. Sometimes a negotiator’s real underlying interest is not obvious from their stated position. For instance, when a used car buyer says, “The most I can offer you is $3,000,” that’s a position. Their underlying interest, however, might be that they have a budget of $4,000 but think they need to set aside $1,000 for repairs. Negotiators can get stuck debating incompatible positions and miss a solution that would address the real underlying interests of both sides (for one example, see the Sayulita case addressed in Episode 1, "We are all Michael" and Episode 5, "Return to Sayulita”).
An issue is a factor that could be discussed or negotiated during bargaining. Issues can be introduced, or set aside, during the course of bargaining. In a renovation negotiation between a homeowner and a contractor, issues might include things like price, duration, and scope of work.
A lopsided priority is when one side cares more about an issue than their counterpart does. This is not the same as a compatible issue where both sides want something like the same thing. Instead, the parties want different outcomes but one side places much greater value on getting their way. This can open the possibility for smart trades, such as sacrificing on a lower-priority issue that yields big value for a counterpart and asking from concessions elsewhere or for value to be returned in some other way. For instance, a budget-minded homeowner negotiating with a contractor about a renovation might prefer that the project be done more quickly, but the contractor might have a strong preference to take more time because of other obligations. The homeowner could make a modest sacrifice on the duration issue, yielding substantial value for the contractor, and link that concession to their desired terms on the project budget. Lopsided priorities are one kind of issue that might be in the issue mix of a negotiation. See Episode 4, "The Dealmaker’s Dilemma."
The Nirvana case, a true story, revolves around a family negotiating with a neighboring real estate developer over an access road running through the family’s land. We describe the case in Episode 2, "The Road to Nirvana," and refer back to it repeatedly in subsequent episodes, in particular in Episodes 3 and 4.
Opening refers to how a bargainer begins a negotiation. In very general terms, this can include how they set the stage for the discussion, such as clarifying the negotiation process and timeline as well as establishing some rapport with a counterpart. It also entails acts related to opening offers or proposals, including whether to make the initial proposal, whether to encourage a counterpart to make the opening offer, or whether to delay concrete proposals. Opening offers can sometimes lead to anchoring and persuasion gain. Getting a counterpart to open may lead to an information-gain. Delaying openings may also lead to an information gain, giving a bargainer a chance to implement their information strategy.
The Package Drama involves shaping and revising the content of a deal in order to find terms that get both sides to agree. This involves opening offers, counterproposals, and concessions. The Package Drama might also involve introducing additional issues or setting some issues aside. See Episode 3, "The Drama of Dealmaking."
The Partner Drama involves how your counterpart perceives the negotiation and how they see and relate to you. This drama hinges on the idea that negotiators are not just seeking an agreement on a set of issues but also dealing with another person who has their own definition of success. See Episode 3, "The Drama of Dealmaking."
The Party Drama reflects the cast of characters and the roles they play, including people who are at the negotiating table and those at the negotiators’ second tables. Some negotiations can be transformed by giving parties a role, by coordination between parties, and by leaving one or more parties aside. See Episode 3, "The Drama of Dealmaking."
When a bargainer makes progress in persuading their counterpart to agree to their desired terms or solution. Making an opening offer can lead to persuasion gain by anchoring a counterpart and becoming the focus of discussion. Negotiators can also make persuasion gains by offering compelling rationales for their proposals (see information strategy).
Your Plan B is your alternative in a negotiation: what you would do if you did not reach a deal with this particular counterpart. In some cases, you may have another partner or possible deal; in other cases, there is no specific alternative. Understanding your Plan B is important for diagnosing your negotiation situation and identifying your walkaway point. See our episode, "Preferences, Priorities, and Plan B."
Positions are the things people say that they want--the outcomes they propose or the deal terms they seek. When a used car buyer says, “The most I can offer you is $3,000,” that’s a position. We can think of positions in contrast to interests, a negotiator’s real underlying goals (for instance, a used car buyer whose real situation is that they have a budget of $4,000 but they think they need to set aside $1,000 for repairs). Sometimes a negotiator’s real interest is not obvious from their position. Negotiators can get stuck debating incompatible positions and miss a solution that would address the interests of both sides (for one example, see the Sayulita case addressed in Episode 1, "We are all Michael" and Episode 5, "Return to Sayulita”).
Preferences are how much or little you want particular outcomes within negotiation issues. A job candidate would typically prefer to be paid more rather than less, for instance. But in advance of negotiating, a candidate might also need to clarify their preferences for things like job assignment (e.g., role, department) or starting date. See our episode, "Preferences, Priorities, and Plan B."
Preparation involves advance work, before bargaining begins, including steps such as clarify one’s own definition of success (part of the Private Drama), crafting an information strategy, and thinking about the parties that might be involved (part of the Party Drama). Many experts stress the importance of advance preparation. The Habits assessment gauges a bargainer’s typical behaviors, including how much and how they prepare in advance. The Negotiation Preparation Worksheet captures many of the steps of preparation that Negotiable recommends, which are summarized in the episode “More than Hope.”
Priorities are how much or little a particular negotiation issue matters compared to other issues. One job candidate might prioritize pay over any other issues, such as start date or job assignment. Another job candidate might be willing to concede to slightly lower pay in exchange for their ideal job assignment. See our episode, "Preferences, Priorities, and Plan B."
The Private Drama is the negotiation you have with yourself. This includes the big picture orientation of defining success, including what you most want to achieve and avoid in general terms. It also includes more detailed understandings of your own priorities and preferences. Many effective negotiators address their Private Drama in their preparation. During negotiations, factors such as stress and emotions can lead to goaljacking, a failure in the Private Drama where you lose sight of your true objective. See Episode 3, "The Drama of Dealmaking" as well as our episodes "Defining Success" and "Preferences, Priorities, and Plan B."
The Sayulita case, a true story, concerns an American man (whom we call Michael) and his two friends on vacation in Mexico. Michael talks with a charter fishing captain, trying to arrange for a fishing trip. See Episode 1, "We are all Michael" and Episode 5, "Return to Sayulita."
While the central negotiation discussion takes place at the primary negotiating table, nearly all bargainers are influenced by or accountable to people who are not part of that immediate conversation. A job candidate might consult her family over the course of negotiating, for instance. The human resources professional she is negotiating with might have to report back to his own supervisor. These relationships are part of the Party Drama. See Episode 3, "The Drama of Dealmaking."
Slicing the pie
See claiming value.
See fixed pie issues.