How to Get a Great Deal When Trust is Low

Are negotiators who don’t trust each other doomed to failure? Not at all, according to a new study.

By — on / Dealmaking

Negotiators from Western cultures, such as the United States, tend to be trusting. They’re often open to sharing information with counterparts, and expect ideas to flow freely. But in many other cultures, negotiators tend to be less trusting and more cautious about sharing information about their interests.

Of course, there are many ways to build trust in negotiation, such as establishing rapport and verifying someone’s claims with outside sources. But such methods aren’t always available, or they might still leave one party feeling wary. When one or more parties are untrusting and unwilling to share information, is it still possible for negotiators to create joint gain?

The answer is yes, write researchers Jingjing Yao and Jimena Ramirez- Marin (IÉSEG School of Management, France), Jeanne M. Brett (Northwestern University), and Zhi-Xue Zhang (Guanghua School of Management, China) in a new study published in the journal Organizational Behavior and Human Decision Processes. They identified an effective strategy for generating joint gain in negotiation when trust is low: presenting multi-issue offers. As compared to a single-issue offer, such as “I’m asking $2,000 for my design services,” a multi-issue offer might be, “I’m asking $2,000, and I would like half the payment up front,” or “I’m asking $2,000, and I’d like half the payment up front. And would you be willing to push the deadline back to August?”

Single-issue offers tend to direct negotiators toward haggling over a single issue, typically price. As such, they can lead to defensive arguments, conflict, inefficient agreements, and impasse. By comparison, multi-issue offers reveal information about one’s preferences and can lead negotiators to identify tradeoffs across issues. For example, the designer’s potential client might respond to the three-issue offer, “I’m really hoping to get the site up and running by July 1, if that’s feasible. But up-front payment isn’t a problem. Would you agree to $1,600 if I paid 75% up front?” The exchange of offers could continue from there, with parties making tradeoffs based on their growing understanding of each other’s priorities. Yao and his team theorized that when trust is low, negotiators can use multi- issue offers to create value without having to disclose information that could be exploited.

Overcoming a trust deficit

In one study, the researchers had 100 Chinese managers engage in a sales negotiation simulation in which multiple issues were available for discussion. Before they negotiated, the participants’ base level of trust was measured. The results showed that untrusting negotiators were able to reach high joint gains by making multi-issue offers that generated insight into their counterparts’ priorities. This was especially true for untrusting negotiators who had a holistic mindset—an individual trait that appears to help negotiators integrate the various issues raised in multi-issue offers and make tradeoffs across them.

In another study, before being paired for a negotiation, 138 Chinese undergraduate students read statements designed to persuade them to view their counterpart as either highly trustworthy (high-trust condition) or as someone whose level of trustworthiness was unknown (low-trust condition).
The results showed that high-trust negotiators tended to develop insight into their counterparts’ interests and create joint gain by sharing information directly. Those in the low-trust condition were also able to reach high-quality agreements—not by sharing information, but by exchanging multi-issue offers, which gave them insights into their counterparts’ priorities. Both trusting and untrusting negotiators were able to create joint gains but used different strategies to do so.

Expanding your strategic toolkit

The team’s results highlight that negotiators who don’t trust each other enough to share information directly are still capable of reaching strong agreements that meet both parties’ interests by exchanging multi-issue offers.

In particular, the researchers identify three “sub-strategies” we can adopt when trust is low:

  • Refuse to exchange single-issue offers, unless you can agree to leave each issue unresolved until later in the process. Instead, propose multi-issue offers and ask for them in return.
  • Hold firm on issues of high priority to you, and gradually make concessions on your low-priority issues.
  • Aim to take a holistic approach to understanding your counterpart’s priorities, based on their pattern of concessions across a set of multi-issue offers. To identify such patterns, you might track their offers in a spreadsheet or graph.

What about if you are trusting but your counterpart is not? Give traditional trust-building strategies a try, such as taking time to get to know each other or providing references, but be aware that direct information sharing might not get you very far. Instead, you might want to combine such sharing with offers that cover multiple issues.

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