Preface xix
About the Author xxii
Part I Essentials of Negotiation 1
Chapter 1 Negotiation: The Mind and the Heart 1
Negotiation: Definition and Scope 2
Negotiation as a Core Management Competency 3
Dynamic Nature of Business 3
Interdependence 3
Economic Forces 4
Information Technology 4
Globalization 4
Most People are Ineffective Negotiators 5
Negotiation Traps 5
Why People are Ineffective Negotiators 6
Egocentrism 6
Confirmation Bias 6
Satisficing 7
Self-Reinforcing Incompetence 7
Debunking Negotiation Myths 8
Myth 1: Negotiations are Fixed-Sum 8
Myth 2: You Need to be either Tough or Soft 8
Myth 3: Good Negotiators are Born 8
Myth 4: Life Experience is a Great Teacher 9
Myth 5: Good Negotiators Take Risks 9
Myth 6: Good Negotiators Rely on Intuition 9
Learning Objectives 10
The Mind and Heart 11
Chapter 2 Preparation: What to Do Before Negotiation 12
Self-Assessment 13
What Do I Want? 13
What is My Alternative to Reaching Agreement in This Situation? 15
Determine Your Reservation Point 16
Be Aware of Focal Points 16
Beware of Sunk Costs 16
Do Not Confuse your Target Point with Your Reservation Point 19
Identify the Issues in the Negotiation 19
Identify the Alternatives for Each Issue 19
Identify Equivalent Multi-Issue Proposals 19
Assess Your Risk Propensity 20
Endowment Effects 23
Am I Going to Regret This? 24
Violations of the Sure Thing Principle 24
Do I Have an Appropriate Level of Confidence? 25
Other Assessment 26
Who Are the Other Parties? 26
Are the Parties Monolithic? 26
Counterparties’ Interests and Position 26
Counterparties’ BATNAs 27
Situation Assessment 27
Is the Negotiation One Shot, Long Term, or Repetitive? 27
Do the Negotiations Involve Scarce Resources, Ideologies, or Both? 27
Is the Negotiation One of Necessity or Opportunity? 28
Is the Negotiation a Transaction or Dispute? 29
Are Linkage Effects Present? 29
Is Agreement Required? 30
Is it Legal to Negotiate? 30
Is Ratification Required? 31
Are Time Constraints or Other Time-Related Costs Involved? 31
Are Contracts Official or Unofficial? 33
Where Do the Negotiations Take Place? 34
Are Negotiations Public or Private? 34
Is Third-Party Intervention a Possibility? 35
What Conventions Guide the Process of Negotiation (Such as Who Makes the First Offer)? 35
Do Negotiations Involve More Than One Offer? 35
Do Negotiators Communicate Explicitly or Tacitly? 36
Is There a Power Differential Between Parties? 36
Is Precedent Important? 36
Conclusion 36
Chapter 3 Distributive Negotiation: Slicing the Pie 38
The Bargaining Zone 39
Bargaining Surplus 40
Negotiator’s Surplus 41
Pie-Slicing Strategies 41
Strategy 1: Assess Your BATNA and Improve It 43
Strategy 2: Determine Your Reservation Point, but do not reveal It 43
Strategy 3: Research the Other Party’s BATNA and Estimate Their Reservation Point 44
Strategy 4: Set High Aspirations (Be Realistic but Optimistic) 44
Strategy 5: Make the First Offer (If You Are Prepared) 46
Strategy 6: Immediately Reanchor if the Other Party Opens First 47
Strategy 7: Plan Your Concessions 48
Strategy 8: Support Your Offer with Facts 49
Strategy 9: Appeal to Norms of Fairness 49
Strategy 10: Do Not Fall for the “Even Split” Ploy 50
The Most Commonly Asked Questions 50
Should I Reveal My Reservation Point? 50
Should I Lie About My Reservation Point? 50
Should I Try to Manipulate the Counterparty’s Reservation Point? 52
Should I Make a “Final Offer” or Commit to a Position? 52
Saving Face 53
The Power of Fairness 54
Multiple Methods of Fair Division 54
Situation-Specific Rules of Fairness 54
Social Comparison 56
The Equity Principle 58
Restoring Equity 59
Procedural Justice 60
Fairness in Relationships 62
Egocentrism 63
Wise Pie-Slicing 66
Consistency 66
Simplicity 67
Effectiveness 67
Justifiability 67
Consensus 67
Generalizability 67
Satisfaction 67
Conclusion 68
Chapter 4 Win-Win Negotiation: Expanding the Pie 69
What Is Win-Win Negotiation? 70
Telltale Signs of Win-Win Potential 70
Does the Negotiation Contain More Than One Issue? 70
Can Other Issues Be Brought In? 71
Can Side Deals Be Made? 71
Do Parties Have Different Preferences Across Negotiation Issues? 71
Most Common Pie-Expanding Errors 72
False Conflict 72
Fixed-Pie Perception 73
Most Commonly Used Win-Win Strategies 74
Commitment to Reaching a Win-Win Deal 74
Compromise 74
Focusing on a Long-Term Relationship 74
Adopting a Cooperative Orientation 74
Taking Extra Time to Negotiate 75
Effective Pie-Expanding Strategies 75
Perspective Taking 75
Ask Questions About Interests and Priorities 76
Reveal Information About Your Interests and Priorities 78
Unbundle the Issues 79
Logrolling and Value-Added Trade-Offs 81
Make Package Deals, Not Single-Issue Offers 81
Make Multiple Offers of Equivalent Value Simultaneously 82
Structure Contingency Contracts by Capitalizing on Differences 85
Presettlement Settlements (PreSS) 87
Search for Postsettlement Settlements 88
A Strategic Framework for Reaching Integrative Agreements 88
Resource Assessment 89
Assessment of Differences 89
Offers and Trade-Offs 89
Acceptance/Rejection Decision 90
Prolonging Negotiation and Renegotiation 90
Conclusion 90
Part II Advanced Negotiation Skills 91
Chapter 5 Developing a Negotiating Style 91
Motivational Orientation 93
Assessing Your Motivational Style 93
Strategic Issues Concerning Motivational Style 96
Interests, Rights, and Power Model of Disputing 100
Assessing Your Approach 102
Strategic Issues Concerning Approaches 105
Emotions and Emotional Knowledge 112
Genuine Versus Strategic Emotion 112
Negative Emotion 113
Positive Emotion 117
Emotional Intelligence and Negotiated Outcomes 118
Strategic Advice for Dealing with Emotions at the Table 119
Conclusion 121
Chapter 6 Establishing Trust and Building a Relationship 122
The People Side of Win-Win 122
Trust as the Bedrock of Relationships 124
Three Types of Trust in Relationships 125
Building Trust: Rational and Deliberate Mechanisms 127
Building Trust: Psychological Strategies 130
What Leads to Mistrust? 134
Repairing Broken Trust 135
Reputation 139
Relationships in Negotiation 140
Negotiating with Friends 141
Negotiating with Businesspeople 144
When in Business with Friends and Family 146
Conclusion 148
Chapter 7 Power, GENDER, and Ethics 149
Power 150
The Power of Alternatives 150
Power Triggers in Negotiation 152
Symmetric and Asymmetric Power Relationship 152
The Effect of Using Power on Powerful People 152
The Effects of Power on Those with Less Power 153
Status 154
Gender 155
Gender and Negotiation Outcomes 155
Initiating Negotiations 156
Leveling the Playing Field 157
Evaluations of Negotiators 159
Gender and Race Discrimination in Negotiation 159
Gender and Third-Party Dispute Resolution 160
Ethics 160
Ethics and Lying 161
Other Questionable Negotiation Strategies 163
Sins of Omission and Commission 166
Costs of Lying 166
Under What Conditions Do People Engage in Deception? 168
Responding to Unethical Behavior 171
Conclusion 172
Chapter 8 Creativity and Problem Solving in Negotiations 173
Creativity in Negotiation 173
Test Your Own Creativity 174
What Is Your Mental Model of Negotiation? 174
Haggling 174
Cost-Benefit Analysis 179
Game Playing 179
Partnership 179
Problem Solving 180
Creative Negotiation Agreements 180
Fractionating Single-Issue Negotiations into Multiple Issues 180
Finding Differences: Looking for Patterns in Offers 180
Expanding the Pie 181
Bridging 181
Cost Cutting 182
Nonspecific Compensation 182
Structuring Contingencies 183
Threats to Effective Problem Solving and Creativity 185
The Inert Knowledge Problem 186
Availability Heuristic 189
Representativeness 189
Anchoring and Adjustment 190
Unwarranted Causation 191
Belief Perseverance 191
Illusory Correlation 191
Just World 192
Hindsight Bias 192
Functional Fixedness 193
Set Effect 193
Selective Attention 193
Overconfidence 194
The Limits of Short-Term Memory 195
Techniques for Enhancing Creative Negotiation Agreements 195
Negotiating Skills Training 195
Bilateral or Unilateral Training 196
Feedback 196
Learning Versus Performance Goals 197
Analogical Training 198
Counterfactual Reflection 199
Incubation 199
Rational Problem-Solving Model 200
Brainstorming 201
Deductive Reasoning 201
Inductive Reasoning 203
Conclusion 203
Part III Applications and Special Scenarios 208
Chapter 9 Multiple Parties, Coalitions, and Teams 208
Analyzing Multiparty Negotiations 209
Multiparty Negotiations 211
Key Challenges of Multiparty Negotiations 211
Strategies for Successful Multiparty Negotiations 215
Coalitions 217
Key Challenges of Coalitions 217
Strategies for Maximizing Coalitional Effectiveness 222
Principal-Agent Negotiations 223
Disadvantages of Agents 224
Strategies for Working Effectively with Agents 226
Constituent Relationships 228
Challenges for Constituent Relationships 228
Strategies for Improving Constituent Relationships 231
Team Negotiation 231
Challenges That Face Negotiating Teams 233
Strategies for Improving Team Negotiations 234
Intergroup Negotiation 236
Challenges of Intergroup Negotiations 236
Strategies for Optimizing Intergroup Negotiations 238
Conclusion 242
Chapter 10 Cross-Cultural Negotiation 245
Learning About Cultures 246
Culture as an Iceberg 246
Cultural Values and Negotiation Norms 247
Individualism versus Collectivism 247
Egalitarianism versus Hierarchy 258
Direct versus Indirect Communications 261
Key Challenges of Intercultural Negotiation 264
Expanding the Pie 264
Dividing the Pie 265
Sacred Values and Taboo Trade-Offs 265
Biased Punctuation of Conflict 267
Ethnocentrism 268
Affiliation Bias 269
Faulty Perceptions of Conciliation and Coercion 270
Naïve Realism 270
Predictors of Success in Intercultural Interactions 271
Advice for Cross-Cultural Negotiations 272
Anticipate Differences in Strategy and Tactics That May Cause Misunderstandings 272
Cultural Perspective Taking 272
Recognize That the Other Party May Not Share Your View of What Constitutes Power 273
Avoid Attribution Errors 273
Find Out How to Show Respect in the Other Culture 274
Find Out How Time is Perceived in the Other Culture 275
Know Your Options for Change 275
Conclusion 277
Chapter 11 Social Dilemmas 278
Social Dilemmas in Business 280
The Prisoner’s Dilemma 280
Cooperation and Defection as Unilateral Choices 281
Rational Analysis 282
Psychological Analysis of Why Tit-for-Tat Is Effective 284
Ultimatum Dilemma 289
Dictator Game 290
Trust Game 291
Binding versus Nonbinding Contracts 291
Social Networks and Reputations 292
Relationship Threat 292
Self-Blame and Regret 292
Restoring Broken Trust 293
Volunteer Dilemma 293
Multiparty Dilemmas 294
The Tragedy of the Commons 294
Types of Social Dilemmas 295
How to Build Cooperation in Social Dilemmas 297
How to Encourage Cooperation in Social Dilemmas When Parties Should Not Collude 303
Escalation of Commitment 303
Avoiding the Escalation of Commitment in Negotiations 306
Conclusion 307
Chapter 12 Negotiating Via Information Technology 308
Place-Time Model of Social Interaction 309
Face-to-Face Communication 309
Same Time, Different Place 312
Different Time, Same Place 313
Different Place, Different Time 314
Information Technology and Its Effects on Social Behavior 318
Trust 318
Deception 318
Status and Power: The “Weak Get Strong” Effect 318
Social Networks 320
Risk Taking 321
Rapport and Social Norms 321
Paranoia 322
Intergenerational Negotiation 322
Strategies for Enhancing Technology-Mediated Negotiations 325
Initial Face-to-Face Experience 325
One-Day Videoconference/Teleconference 326
Schmoozing 326
Humor 327
Conclusion 327
Appendix 1 Are You a Rational Person? Check Yourself 328
Why Is It Important to Be Rational? 328
Individual Decision Making 328
Riskless Choice 329
Decision Making Under Uncertainty 331
Risky Choice 331
Summing Up: Individual Decision Making 343
Game Theoretic Rationality 343
Nash Bargaining Theory 344
Appendix 2 Nonverbal Communication and Lie Detection 349
What Are We Looking for in Nonverbal Communication? 349
Are Women More “Nonverbally Gifted” Than Men? 350
Dominance 351
Personal Charisma 352
Detecting Deception 353
Direct Methods 355
Indirect Methods 355
How Motivation and Temptation Affect Lying and Deception 357
Deception Success 358
Appendix 3 Third-Party Intervention 360
Common Third-Party Roles 360
Mediation 360
Arbitration 361
Mediation-Arbitration 362
Arbitration-Mediation 362
Key Choice Points in Third-Party Intervention 362
Outcome versus Process Control 363
Formal versus Informal 363
Invited versus Uninvited 363
Interpersonal versus Intergroup 363
Content versus Process Orientation 363
Facilitation, Formulation, or Manipulation 363
Disputant Preferences 364
Mediators and Gender 364
Challenges Facing Third Parties 364
Meeting Disputants’ Expectations 365
Increasing the Likelihood That Parties Reach an Agreement if a Positive Bargaining Zone Exists 365
Promoting a Pareto-Efficient Outcome 365
Promoting Outcomes That Are Perceived as Fair in the Eyes of Disputants 365
Improving the Relationship Between Parties 366
Empowering Parties in the Negotiation Process 366
Debiasing Negotiators 366
Maintaining Neutrality 367
Enhancing the Effectiveness of Third-Party Intervention 368
Accept Your Share of Responsibility 368
Test Your Own Position 368
Role-Play a Third Party in Your Own Dispute 368
Training in Win-Win Negotiation 368
Appendix 4 Negotiating a Job Offer 369
Preparation 369
Step 1: Determine What You Really Want 369
Step 2: Do Your Homework 369
Step 3: Determine Your BATNA and Your Aspiration Point 371
Step 4: Research the Employer’s BATNA 371
Step 5: Determine the Issue Mix 371
Step 6: Prepare Several Scenarios 371
Step 7: Consider Getting a “Coach” 371
In Vivo: During the Negotiation Itself 372
Think About the Best Way to Position and Present Your Opening Offer 372
Assume the Offer Is Negotiable 372
Put the Focus On How You Can Solve Problems, Not Make Demands 373
Don’t Reveal Your BATNA or Your Reservation Point 374
Rehearse and Practice 375
Imagine You Are Negotiating on Behalf of Someone Else (Not Just Yourself) 375
Comparables and Benchmarks 375
Post-Offer: You Have the Offer, Now What? 376
Think Before Posting Anything on Social Media 376
Do Not Immediately Agree to the Offer 376
Get the Offer in Writing 376
Be Enthusiastic and Gracious 376
Assess the Interviewer’s Power to Negotiate with You 376
State Exactly What Needs to Be Done for You to Agree 376
Do Not Negotiate If You Are Not or Could Not Be Interested 377
Exploding Offers 377
Do Not Try to Create a Bidding War 377
Know When to Stop Pushing 377
Use a Rational Strategy for Choosing Among Job Offers 378
Name Index 379
Subject Index 396