Finding your counterparts’ interests and reconciling them with your own is a process. But what if you or your counterpart presents a myriad of options and offers at the negotiation table? Will this help facilitate negotiated agreements?
An excess of choices can not only impair your effectiveness at the bargaining table but also reduce your quality of life. In The Paradox of Choice, Barry Schwartz offers these negotiation strategies for limiting choice and improving overall satisfaction.
- Choose when to choose – Decide when choices really matter.
- Satisfy more, maximize less – Learn to accept what’s “good enough.”
- Think about opportunity costs- Once your choice is made, move on.
- Make your decisions nonreversible – Stop second-guessing and commit.
- Practice an ‘attitude of gratitude’ – Relatively speaking, your choice isn’t all that bad!
- Abandon regret – Where does it get you anyway?
- Anticipate adaptation – You’ll get used to choice, so learn to remain more satisfied.
- Control your expectations – Avoid being underwhelmed.
- Beware social comparisons – The heck with keeping up with the Joneses.
- Learn to Love Constraints – Within limits, choice can be liberating.
Check your confidence at the door when creating negotiated agreements
Many negotiators understand the importance of estimating the other side’s reservation price—the worst deal he would accept from you during negotiated agreements. However, despite the fact that such estimates often are based on hints, clues, and speculation, negotiators are frequently overconfident that their estimates are accurate.
Say, for instance, that you do a bit of Internet research before making an offer on your dream car. You conclude that the dealer’s invoice price (what he paid the manufacturer) is $32,500. You also assume that this is his reservation price in his negotiation with you.
Not so fast! Your estimate could be way off base for a variety of reasons. Your sources may not be impeccable. You may not know about rebates the dealer receives from the manufacturer. You might also lack key information about consumer demand for the car.
Research on overconfidence shows that negotiators’ estimates—whether of a counterpart’s reservation price or some other quantity—typically are overly precise. This tendency toward overprecision, or excessive confidence in the accuracy of one’s judgments, makes it unlikely that you will sufficiently account for the uncertainty inherent in your estimates of various quantities. Even worse, once you’re seated at the negotiating table, there’s a good chance you won’t pay enough attention to useful information that you could use to update your estimates.
For this reason, seek out as much relevant, high-quality information about the other side as you can, and use that information to your advantage. In the course of talks, listen closely to the other side, and update your beliefs when necessary. Before and during the negotiation, ask others within your organization to question you about your approach and assumptions.
In addition, remember that it rarely hurts to ask your negotiating counterpart for what you want during negotiated agreements. You will be amazed by what you can get—including valuable information—simply by asking.
Related Dealmaking Article:
Negotiating Skills and Negotiation Tactics for Trust Building at the Negotiation Table
Negotiation Topics in Business: Six Negotiation Strategies for Integrative Negotiations Involving Haggling
Negotiation Strategies and Negotiation Techniques – MESO Negotiation
Discover how to boost your power at the bargaining table in this FREE special report, Dealmaking: Secrets of Successful Dealmaking in Business Negotiations, from Harvard Law School.
Originally published July 2013. Some parts adapted from “Are You an Overconfident Negotiator?” by Don A. Moore, Professor, Carnegie Mellon University.