Negotiation Power Plays

When we’re lacking objective sources of power, we can improve our outcomes through certain types of thoughts and behavior at the bargaining table, new research shows.

By on / BATNA

July-2018-image

Imagine yourself in the following negotiation scenarios:

  • You’re a chef who is having trouble finding cooks in an oversaturated restaurant market. You’re so desperate to get fully staffed that you find yourself making significant concessions on salary, scheduling, and other issues during interviews with potential hires.
  • You are trying to sell a used piano online before an impending move and receive only one lowball offer. You’re tempted to take the offer rather than negotiate for a number closer to your asking price.
  • You have received a relatively low financial-aid offer from your first- choice graduate school. The other programs you’ve been admitted to are not nearly as appealing. You debate whether to ask your first-choice school for more money or just go ahead and apply for loans.

In negotiation, we’re often advised that our most important source of power is our best alternative to a negotiated agreement, or BATNA. When we feel powerless, it’s often because we don’t have a strong alternative if the current deal falls apart or fails to meet our needs. The key to enhancing our power, therefore, is to do whatever we can to improve our walk-away alternatives.

But what if you’ve done everything you can to bolster your BATNA and it’s still falling short? What if simply no other job candidates, piano buyers, or appealing grad-school offers are left to consider? In cases such as these, there may be other, more subjective ways of improving your sense of power and your outcomes, the results of two new studies show.

Acting the part

When you lack power, there may be behaviors you can engage in to make the other party think you’re powerful, past negotiation research has shown. In particular, it’s been shown that negotiators can improve their outcomes through displays of dominance. Dominance behaviors include taking up more space than usual with expansive postures, speaking loudly, expressing your preferences more often and more clearly, being assertive, taking the lead in the conversation, and expressing anger. Expressing dominance isn’t
as extreme as being domineering, which involves more controlling and antagonistic behavior.

In a new study, University of Southern California professor Scott S. Wiltermuth and his colleagues looked more closely at whether the amount of objective power a negotiator has affects how useful his or her displays of dominance will be. In a negotiation simulation in one of the experiments, pairs of undergraduates played the role of two coworkers, a senior vice president and a junior analyst, hammering out the details of a new virtual-reality project.

In some of the experiment’s conditions, those playing the senior vice president were told that they were in a much stronger negotiating position and had much more power in the organization as compared to those playing the junior analyst, who were told that they were in a much weaker bargaining position and had much less power. Some of the negotiators were encouraged to engage in dominance behaviors (such as speaking loudly, interrupting, and taking up a lot of space) during the negotiation, which they were told might help improve their outcomes.

The results showed that when low-power negotiators engaged in dominance behaviors, they felt more powerful and claimed more value as a result. Thus, when you lack power, behaving in a dominant manner during a negotiation may help you feel more powerful and perhaps negotiate more assertively.

When you lack power, behaving in a dominant manner during a negotiation can help you feel more powerful and perhaps negotiate more assertively.

By contrast, the high-power negotiators in the experiment didn’t feel more powerful or claim more value as a result of engaging in dominance behaviors. However, the high-power negotiators’ dominance behaviors helped them and their counterparts create new sources of value—that is, pairs were more successful at expanding the pie when the person with more power appeared dominant. Why? The high-power negotiators’ dominant behavior highlighted their power and cued their less powerful counterparts to avoid challenging them directly. Instead, the low-power negotiators relied on more collaborative moves, such as making tradeoffs across issues. “High-power negotiators’ expressions of dominance may motivate low-power counterparts to invest the cognitive effort necessary to find an integrative solution,” Wiltermuth and his colleagues conclude.

The study contributes to a growing literature suggesting that negotiators, whether they have ample or little power, may be able to improve their outcomes by using a dominant negotiating style. However, the authors caution that dominance behaviors can backfire if your counterpart believes you’re engaging in them to try to gain status.

Make-believe BATNAs

Simply imagining that you have more power than you actually do can also improve your negotiated outcomes, INSEAD researcher Michael Schaerer and his colleagues found in seven experiments conducted on more than 2,500 people.

In one experiment, participants were instructed to make the first offer in a negotiation over a used CD with an online buyer (who was fictitious). Some sellers were told that a different buyer had offered them $8 for the CD—a strong BATNA. Others were told they had no other offer—a weak BATNA. Those in a third group also were told they had no other offer (a weak BATNA) and then were asked toimagine having a strong alternative offer. The sellers were instructed to imagine what this strong alternative offer would look and feel like, and how it would affect the upcoming negotiation.

Those who imagined having a strong BATNA made significantly more ambitious first offers than those who were simply told they had no alternative—$11.20 as compared to $8.65. In fact, those whose strong BATNAs were imaginary asked for about as much as those who actually had a strong BATNA.

In another experiment, participants in the role of seller who were asked to imagine having a strong BATNA before negotiating to sell a Starbucks mug face-to- face with participants in the role of buyer made more aggressive first offers and sold their mug for significantly more than did sellers who weren’t asked to imagine having a good alternative. They performed almost as well as those who actually did have a strong alternative.

Overall, the results of Schaerer and his team’s experiments imply that thinking about the BATNA we’d like to have may inspire us to ask for more and get better results. The study leads to the interesting conclusion that in negotiation, positive beliefs—even if they’re not rooted in reality—can make us more ambitious and successful. There are a couple of caveats, however. First, when negotiators who imagine a strong alternative don’t make the first offer, they don’t benefit from this strategy, apparently because they become anchored by the other side’s first offer and become distracted by their high aspirations. Second, when negotiators are very far apart on price, imagining a healthy BATNA can make you overly ambitious and bring about an impasse when a satisfactory deal was possible.

Sources: “How Perceived Power Influences the Consequences of Dominance Expressions in Negotiation,” by Scott S. Wiltermuth, Medha Raj, and Adam Wood. Organizational Behavior and Human Decision Processes, 2018. “Imaginary Alternatives: The Effects of Mental Simulation on Powerless Negotiators,” by Michael M. Schaerer, Martin M. Schweinsberg, and Roderick I. Swaab. Journal of Personality and Social Psychology, 2018.

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