Getting moreThere are two ways to eat more more pie. Cut a bigger piece or making the pie bigger. The first approach is the individualistic perspective as in essence you are eating away pieces from other while is the collective/stakeholder approach where everyone eats more.
How much our decisions are affected by what we perceive the other side is gaining?
Suppose in a negotiation between a buyer and a seller, the actual monetary value of the item of negotiation is 100$. The seller asks for $120 and the buyer offers $80. Presuming the need for the seller to sell equals the need for the buyer to buy, would the margin of leeway for one feel the same for the other? In other words, does it feel the same when you gain by selling at higher than expected price, or when you buy at lower than expected price.
I guess it depends on the personality, but most other things being equal I would expect that the feeling of gaining by selling is not as strong as the feeling of gaining by buying. From the buyers perspective giving is cost and as such represents loss of profit. This is compensated by gaining credit in the form of the purchased item. For the seller on the other hand getting money represents profit and selling the item represents loss of credit. In that sense the seller’s reward is in the present (instant we might say) while the buyer’s reward is in the future, when he would sell the item he bought and make profit. So we see selling as an instant reward and buying as a future one. This is the leverage one has over the other, and should dictate the way they should approach the negotiation.
If I could add some anecdotal evidence here, in all the simulations I had in my negotiations classes the buyers would outperform the sellers. Buyers are always on the initiating side while sellers are on the receiving end. A “stubborn” buyer will always outperform a seller in need to sell. There is also the influence on ethics that usually favors the buyer who is usually seen as the needy, and thus the one who deserves more sympathy (at least when the perceived needs are nearly equal). Obviously those who desperately need to sell are more of a victim than the buyers that see the deal as investment. The skill set required for buyer and seller roles is different.
Strategy-wise, the question we are facing becomes: do you make the offer look good or the other person feel happy? You might think they are both the same but the reality is that one focuses on the deal/issue while the other focuses on the person. It is like decorating the object to make it look nice versus decorating the price tag. If you know the person or can guess their personality the answer would be obvious – adapt the offer by increasing its apparent value to the other side and work on the person.
Humor in Multicultural Negotiations
Humor is based on surprise- you expect one thing and another is said. It could be an exaggerated version of what you were expecting, or a shift to a different domain/context. This change in focus can be used to diffuse tension, mitigate a possible offense, introduce a difficult issue, and thus aid in the pursuit one’s own goals. What ever the purpose of using it is, everyone knows that humor is a purely manipulative act, as you want the other side to like you enough to accept your offer. This is easier said than done, and presuming you understand your counterpart’s culture, its function and usage is a matter of the relative power between the participants.
Humor can be used in a repressive way when you are in power or in a contested way when you are the subordinate. Paying attention to its usage can tell you a lot about those involved. For example, what does it tell you about the person who starts the joke? Are they in power? Are they in control? What about who laughs at the joke? Did they enjoy it (presuming they got it, of course), or are they just trying to be compliant and pleasing? How far can you go?
Either way you decide to use it, the purpose is to pass a message undercover using humor as a front. Problems arise when the other side can see through the cover, or if they see something else from what you indented for them to see. The latter is the case with cross-cultural negotiations. While you help break the ice in many cases using humor in cross-cultural setting, one man’s humor could be another man’s insult. Despite the good intention behind adopting such strategy, the challenges one is facing are tantalizing. Also, the choice of the type of humor can be tricky; do you use ironic exaggerations or jokes expressing an incongruity?
Another important concern is the subject. Do you make it about the weather, or do you do make about the negotiation? Whichever you decide to use, do not aim the joke towards people, even if you are making a joke about yourself or your own culture. Putting your side down might be seen as manipulative and create the opposite effects of what you were expecting. Humor is a risky business- play with it carefully.
Can multiple simultaneous offers be beneficial?
Presumably, one goes to negotiations knowing their limits (BATNA, NOPA or simply how low and/or how high you can go). Presuming also that there are many variables at play, converting these limits to multiple alternative offers shouldn't be difficult. Why, though, would one do such a thing as submitting multiple offers?
According to a post at Harvard Law School (source) "when you present multiple equivalent simultaneous offers, or MESOs, you show other parties the issues you value most. In turn, their reactions to your offers tell you about their priorities." This according to the researchers mentioned in the post is advantageous in financial negotiations.
While it might make sense in cases like payment plans, where longer payment options result in higher interest rates, I don’t see how this would be of value to other types of negotiations. For one thing, you give away your interests and your costs as the other person can guess the ranges of your variables. Here is a practical example:
If a restaurant has two offers for the same foods like:
Offer 1: for every 2 pizzas that sale for $15 ( $7.5 each) you get 1 salad free
Offer 2: for every 3 salads you get 1 pizza free for the same amount (meaning each salad is normally charged $5), then I can easily deduce the actual cost of each food and the profit range of the restaurant:
X = price of pizza in offers
Y = price of salad in offers
2X+Y = 15
3Y+X = 15
So, X = 6, Y = 3
Considering that even in offers one makes a profit (say 10%), then we can find the real cost of each food:
Profit of pizza in offers = 10%*6 = $0.6 so real Cost of pizza = 6-0.6 = $5.4
Profit of salad in offers = 10%*3 = $0.3 so real Cost of salad = 3-0.3 = $2.7
These are his relative BATNAs, so you now know how far he can go while still making a profit. One could probably quantify in some way any parameter (in our case we could put weights for taste preferences), so maybe you shouldn't give away details by submitting multiple offers.
Pointing the facts can sometimes hurt negotiations
Although the research in the source is about political misconception, it is easy to see its existence in many negotiations (especially when such negotiations concern every day conflicts and issues).
In the research, subjects read mock news articles that included either a misleading claim from a political viewpoint, or misleading claim and a correction. Surprisingly, to some, the corrections frequently failed to reduce misconceptions. In fact, in some several instances, it triggered a “backfire effect”, in which corrections actually increase misrepresentations. Of course, research was not required to find out what anyone with 10 years of marriage could have told them. Never prove your spouse is wrong, or you will pay for it later in multiple ways, some of them quite unpleasant (so I hear)!
In our case of negotiations, imagine trying to negotiate with someone that has strong beliefs about an issue and are presenting him facts to the oppose these. This is a case where “motivated reasoning” (as termed in psychology) can strongly influence negotiations. There are usually two ways people employ when in favor of preserving false beliefs: performing biased searches and selectively seeking information that enforces such beliefs, and/or by avoiding evidence undercutting them.
Can a fact be communicated in a way neutral enough to be easier for the other side to accept? Would they be more likely to reconsider their position? Or would they feel threatened and become rigid? How do you deal with someone that feels threatened at the challenging of their beliefs?
This is a difficult situation, and unless one is in a position of power, the only ways I know would be to "lead" the other party to discover the fact, or let them discover your awareness of but refusal to reveal this fact, and thus continue negotiations as though it does not exist. When the other party sees who is in the position of power (you), and also sees how you refrain from calling on it, they perceive that you value their feelings and acknowledge their situation- and that will not only give you the negotiation, but also a long lasting positive image. If, on the other hand, you count on small, short-lived gains, then you might as well go with unleashing the facts and bulldozing your way in- but there will be no one left to celebrate your success but yourself.
E-negotiations is a much different case, although one would expect to see the effect of motivated reasoning there as well. The absence of face-to-face interaction, while removing emotional heat, still can not remove the cognitive bias imprinted in strong beliefs.
Deceiving strategies seem to easier overcome ethical barriers in emails than on paper
The result of three studies (see source) seem to indicate that people find it easier to be deceptive online than when using pen and paper. Additionally, people even feel more justified when they do so.
This apparently is because of the ambiguity of the online medium as carrier of appropriate behaviour. It is well known that people feel more removed from both their own behaviors and the effects of their actions over e-mail than on print. Lying usually requires justification and apparently the remoteness of the online medium increases the psychological distance between the actor and the “victim” of the deception, which changes the actor’s perceptions of their conduct and the harmful consequences of their actions.
Email is generally viewed as less permanent, more impersonal and detached than print communication so its natural to expect that typing on a computer (say, for a blog like this one), is more liberating from strict moral guidelines than in face-to-face communication, such as talking to someone over the phone, but it is interesting how the research brings out the same attitudes in online versus print communication.
I guess the old belief that writing (like say a contract) is more permanent and valid than speech (say a promise or giving our word) is still holding strong and, in a way, is transferred online. It wasn’t like this, though, at the beginning of the Internet, when academia and businesses were its main public users. The flood of people that nowadays reach out using the Internet for social purposes has changed the impression of the formality of the medium. The general belief (false, of course) that the easier something becomes the less restrictiveness and weight it seems to carry. Consider the “innocent” act of downloading an image from the web. If it was “really” illegal wouldn’t it be more difficult to do so.
Here though we have two forms of communication (paper and online) that both use text, they have strong permanency (in fact online something will longer than on paper), can be forged (actually paper easier that online in most cases) but one (paper) seems to be more “serious” than the other (email).
How can we use this to our advantage in negotiations? Have you tried to communicate critical issues by using a pdf instead of typing it as text in an email? I mention here pdf and not include Word documents as the later are officially only considered as drafts online and not as documents (presumably because it takes more effort to change the content of the former).
Here are some things that I found useful (serving as administrator) and relate to the research findings in an indirect way: • Send your CV as pdf and never as Word. • If you want to pick more negative (realistic) feedback ask for it as email instead of face-to-face or in paper.
World length is proportional to information content
It seems that longer words carry more meaning at least for Czech, Dutch, English, French, German, Italian, Polish, Portuguese, Romanian, Spanish, and Swedish that the MIT research used (link).
It makes sense to use small words to carry information that we exchange frequently as we conserve energy on the average per sentence but why do we put more meaning in longer words? The research does mention exceptions to the rule and also admits that the proof might not be as strong as they wished but I have to say that at least intuitively it makes sense. One can also see it in the way we create abbreviations like OMG and LOL to save effort and time.
The question for e-negotiations is do we use sophisticate language when communicating online or simple words? What does this say about a person?The following sentences differ in only the last word that it progressively gets smaller:
Which sentence carries more meaning?
If we also eliminate “I submit this for your” as redundant because: “I” its obvious its me since I submit it; “submit” is evident by the act – the other person sees me giving it or it shows as an attachment; “this” its obvious since this is the only thing that exists (say as attachment); “for your” its obvious that its for you since you got it. Then we can see that the actual meaning in the sentence can be carried out by the last word. Does the longer word carry more meaning?Here is a possible explanation according to length:
So in this case it seems that longer words carry more meaning. Although it might seem that other varieties of the previous interpretation could exist there is some attraction to this one that gives a sense that the research might in general be right. Modern developments in language though could really challenge the evolution of language. Think of the abbreviated shorter version of the second sentence:
FYI (3 letters)
Another issue that plays a critical role is urgency. If you fell down and hurting you don’t start describing the event in elaborate English “Oh my god, I had the misfortune to lean my weight on a banana peal that due to low friction ….eventually thrusting my lower rib into the staircase…..can you please assist me …”.
You simply cry “help”.
Timing of first offers is culture sensitive
This is an interesting twist of the anchoring effect that early offers create in cross-cultural contexts. In a previous post we commented on research that suggested that late first offers allow for more creative solutions. This research (see source) though shows how it can affect cross-cultural negotiations.
Apparently Japanese negotiators consider first offers as part of information gathering while for US negotiators it represented information consolidation. In simple terms a typical (or better yet a stereotypical) Japanese negotiator is less fixated/anchored in early offers than his counterpart US negotiator.
This proves the point that understanding the opponent’s culture is not only important – it’s critical. Without such knowledge the Japanese (high-context culture) will probably think the American is stubborn and not considerate enough while the American (low-context culture) will probably think the Japanese is not serious about the negotiation or they don’t know what they are doing. Confusion will inhibit creativity on both sides.
In the context of the “spiral” framework we introduced in the book the two negotiators are out-of-sync with the Japanese in the Intelligence phase and the American in the Strategy phase. How can we bring them in-synch?
Intergroup negotiation team dynamics are greatly affected by cultural norms
Collectivist cultures like East Asian value harmonious team relationships more than Western cultures where in-group competitiveness is acceptable and can lead to better outcomes. The cited source supports this fact based on negotiation exercises between US and Taiwanese teams. When the Americans worked in teams they produced superior results primarily because they would explore and consider more diverse and radical alternatives as they were brought up and defended by each member. The Taiwanese on the other hand would be cautious about group harmony and apparently wouldn’t challenge each others positions resulting to adopting suboptimal strategies.
That is probably a good lesson to remember and avoid taking friends to help us in negotiations.
Extortion strategies seem to work in the short run but generosity rules in the long run
This was probably expected but it is nice to see it confirmed even if that is through the Prisoner's Dilemma game (See source below). In this case it was between two negotiators one of which employed an extortionist strategy while the other one was generous. In the short run as Round 1 of the image shows extortionists win most of the times. The situation though changes radically when huge numbers of negotiators and learning is involved as shown in the follow-up rounds. Extortionist tend to be punished when facing other extortionists leading to eventually being converted to generous.
You can follow three rounds of the game in the image to see how it evolves.
The implications for the evolution of human society with humans as cooperating agents is evident.
An interesting thing would be to see if we would have more effective negotiations in critical issues if multiple teams were involved. Maybe the average would be far superior to the individual negotiations. Imagine having more than one teams in Israeli - Palestinian negotiations concurrently and independently negotiating on the same issue. Would they come up to same resolution? Even if we followed the average things might be gotten better.
Inferring personality characteristics from email content
A Zerox PARC research seems to suggest that personality characteristics can be inferred from the content of the emails we exchange. Although this sounds more or less what we all do when we read an email it is interesting to see how they attempted to address this issue scientifically. To make it more exciting the researchers used a single email to make predictions. The fascinating thing about such research is that it can be quite revealing about some of our own personality traits that surface in our email exchanges.Some of the techniques used in the research include:
Global Trends 2030 - A framework for thinking about the futureThe report (available here) tries to identify critical trends and potential discontinuities in the near future.
Late first offers seem to allow for more creative solutionsIt is well known that first offers have a tendency to anchor negotiators so it is probably no surprise that delaying them allows the parties involved more time to inform each other and explore various possibilities. Now (see link) we also have some research in support of this.
What is the best technique for influencing someone?According to this expert "the idea is to really listen to what the other side is saying and feed it back to them".
Could focusing on differences cause perspectives to converge?Considering other person’s perspectives is vital in most negotiations. The outcome of such exercises is usually a list of similarities and differences about perspectives and issues. Traditionally in negotiations we tend to start from the similarities/common ground and move towards minimizing the differences to close the deal.
The advantage of being unpredictable or better yet acting crazyAccording to recent research emotional inconsistency and unpredictability can increase concession making in the recipient primarily because it makes them feel less in control.
Can we communicate as well as we think?Five experiments (follow link) suggest that most of us tend to believe they are better with email than they actually are especially when the meaning of the message is ambiguous. Apparently egocentrism as a form of social judgment is in action. It seems that we are actually “hearing” the message in our brain and in the absence of a real audience we presume that what looks fine to us will look the same to others. What do you do in such cases?
When should we be the first to make an offer?This is a typical “anchoring” case. First offers have a tendency (see research link) to dominate negotiations and influence perceptions. Making a low first offer could position one much lower from what the other side was willing to offer while an extravagant high first offer could project an irrational image and end the negotiation right away. First impressions like anything else in life tend to be quite influential so being in control and making a high end first offer can be effective as long as it’s not extreme. If nothing, it projects confidence and understanding of the true value of a deal even if that its an overestimate. In addition to also drawing attention to the gains/positives of the deal it makes the other side believe that you know what you are talking about.
How can you compete and cooperate at the same time?A simple answer to the question is: cooperate in building a bigger pie and compete in getting the bigger piece. The research (follow link) demonstrates that in dyadic negotiations, negotiators with a promotion regulatory focus achieve superior outcomes than negotiators with prevention regulatory focus by creating more resources at the bargaining table and claiming more.
Quoting a round number in a first offer versus a precise numberDepending on the order of magnitude values that are multiples of powers of 10 are more often quoted as first offers than precise numbers. What if instead of asking for a salary of $75000 you ask $74800? Of course we are not talking of offers like 14893 that will apparently make you look weird but apparently there is a kind of margin (something like 5% up or down) from the round figure that makes one look more knowledgeable/thoughtful than usual.
Steve Jobs e-negotiatingThe email exchange between Steve Jobs of Apple and James Murdoch of News Corp that has been released by the US government is a great case study of high-profile executives engaged in e-negotiations. This case proves such negotiations to be the norm in in many instances. There is a usual perception of Steve Jobs picking up the phone and bossing his way around but its interesting to see how the same can be done with email and without much of the emotions involved in face-to-face negotiations.
Negotiating with a hidden agendaWhile the source below is a commercial it could well be an experimental study. Reminds me of student assignments were they were required to observe such negotiations. Unfortunately when I teach e-negotiations I can only provide email trails (not as entertaining as this one).
e-negotiations Spiral FrameworkBrief post of the spiral negotiations framework under the title 'E-Negotiations: Making Due Without Visual Queues". We start with the intelligence phase where we try to find as much information as possible about the issue at hand and the parties involved. We then try to make sense of what we found and based on that we build our negotiations strategy. Finally we execute the strategy by communicating our intentions and our proposals.
Negotiating a course grade - the "smart" wayThis story speaks by itself (source) but here is a brief extract from "The Johns Hopkins News-Letter":
LA - Dubai: What time of the day is better for negotiations?11 hours apart could seem too much but in many cases its better than 8 hours apart. By default for two people to communicate during the daylight so far apart one will be living a morning while the other an afternoon. They will be both looking the same sun (colors and size) but at different parts of the horizon. One has just arrived at work while the other already left. One under the pressure of time and performance at work while the other probably relaxing at home. One has focus while the other can afford the time. Both with their advantages and disadvantages. Both can be geared as advantages if one plays it right.
Who negotiates with Apple in product development?It is interesting to see what parts of the globe work together to make Apple products. The map in Apple suppliers is interactive and quite revealing. Business negotiations at its best. more....
Predicting the outcome of negotiations from the first couple of seconds!This is game theory and behavioral economics working together to predict the outcome of a negotiation. The amazing thing is the EG recordings of the two brains when negotiating. It would be interesting if we had the technology to measure what regions of their brain each person is activating. Scary?