When you expect an opponent to be competitive, your confidence in the outcomes you can achieve in negotiation is likely to plummet. In negotiation research with Adam Galinsky of Northwestern’s Kellogg School of Management, negotiators were provided with some background about their counterpart including information on how competitive their counterpart has been in previous negotiations. This information can help create a great BATNA (best alternative to a negotiated agreement).
This information was bogus; it didn’t necessarily describe the negotiator accurately.
Nonetheless, research results found that negotiators given this information expected their opponent to be very competitive. In turn, they set lower reservation prices, or walkaway points, for themselves; made less demanding counteroffers; expected worse outcomes; and eventually agreed to less favorable outcomes than did negotiators who expected their opponent to be less competitive.
BATNA: Negotiation Strategies to Avoid Impasse
Why do negotiators lower their expectations and demands when facing a seemingly competitive opponent?
To ensure that they will reach a negotiated agreement.
Most of us will do almost whatever it takes to avoid impasse at the bargaining table, including ignoring a much more appealing best alternative to a negotiated agreement.
According to Kathleen O’Conner of Cornell’s Johnson Graduate School of Management and Josh Arnold of California State University, Long Beach, impasse can lead a negotiator to feel anger, frustration, and a sense of inadequacy – emotions that can color how one approaches future negotiations. Ultimately, impasse may even lead managers to lose faith in the negotiation process as an effective means of conflict management.
A negotiator may reason that responding competitively to a seemingly competitive opponent will result in an impasse and trigger feelings of failure.
This aversion to impasse may lead a negotiator to become less competitive, causing her to lower her reservation price, demands, and counteroffers in order to secure any agreement at all.
Related Dealmaking Article: Are You an Overconfident Negotiator? – Learn how being overconfident in negotiations can cause a negotiator to miss opportunities for value creation and value claiming. Examining the story of Andrew Carnegie and J.P. Morgan, this article from Negotiation Briefings offers negotiation tips on avoiding making mistakes at the bargaining table that arise from a negotiator’s overconfident belief in her negotiating abilities and negotiation skills.
Adapted from “Break Through the Tough Talk” by Kristina A. Diekmann and Ann E. Tenbrunsel for the September 2006 issue of the Negotiation newsletter.
Originally published October 2014.