Use Time Delays to Advantage

By on / Business Negotiations

For decades, General Electric and the Environmental Protection Agency (EPA) sparred over who would pay for the removal of PCBs, or polychlorinated biphenyls, that GE had discharged into New York’s Hudson River, a cleanup project that is expected to cost hundreds of millions of dollars.

The two sides finally came to an agreement in October 2005.

What finally allowed a deal to go through?

The creation of a two-stage cleanup process with a built-in time delay.

In the first stage, to which GE has fully committed, dredging the river bottom is expected to remove most of the toxic waste. GE had until August 2008 to decide whether to proceed with the second stage of cleanup (removing more widespread but less concentrated waste deposits), which would be more expensive to implement. If GE failed, the government could ask the courts to intervene.

In this protracted negotiation, the presence of a time delay took advantage of the common tendency to postpone decisions about negative events.

The delay also helped spur a partial agreement that satisfied many of the interests important to both sides.

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