© 2010 David Gustafsson

Negotiation skills: follow up

The solution to the problem I posted yesterday is none. There is not possible for both parties to get to an agreement on the positions they have taken. But, there is however on trick that can be used: Ask why to each party. By asking why one can find the interests behind the positions the parties are bargaining about. Why would part1 like to keep the door open? Maybe to get some fresh air. Why would part2 insist on closing the door? Because (s)he does not like the draft from the wind. Is there any position that both parties can be happy about? Why not open a window in an adjacent room?

Always dig deeper than positions and filter out the real interests!

Another interesting lesson I have from the last weeks studies is that one should never underestimate the other part in a negotiation. The other part is not stupid and will never give you something. Do absolutely not believe that you are smarter or can trick the other part.

Why? In class we ran a simulation called Pemberton’s Dilemma. Pemberton’s Dilemma is based on a situation where both parties has a choice of doing an action or not. The particular example of our exercise was two stores, A and B, that competed for the same customers in a city. They both faced the decision of staying open on Sundays. Both parties had come to the same conclusions about the benefits/losses as in the following matrix:

Close A Open A
Close B +$20′ A; +$20′ B +$40′ A; -$40′ B
Open B -$40′ A; +$40′ B -$20′ A; -$20′ B

Thus A win more if he stays open when B is closed than if both stay closed. But if both open they both loose. In the long run the best decision for both is to stay closed, but how can on party take the risk of staying closed and the other party opening? I decided to not take the risk and stayed open! Of course the other part did the same and we were stuck in a loss-loss situation. We remained in this situation since we got personal about it and decided that we could not let the other part win; instead of jointly agreeing to a situation where we both could benefit…

Pemberton’s Dilemma is similar to what is called the Negotiator’s Dilemma. The literature states that if The negotiator starts to share information and trust the other party outcomes can be reached similar to win-win situations. One party might be willing to give something that the other party truly desires and vice versa. This is however not something that is possible in all negotiations, e.g. when selling a car, but definitely when it comes to more long term relationships and projects that needs to be completed within budget and on time.