Are Your Talks too Complex?

By on / Daily, Negotiation Skills

Adapted from “When More Is Less,” first published in the Negotiation newsletter.

It’s an article of faith in negotiation that expanding the pie of value enhances parties’ welfare. When there’s only one issue on the bargaining table, the size of the pie is fixed. If one party gets more, the other party must get less. But when multiple issues exist, negotiators can expand the size of the pie by engaging in give-and-take trading that leaves everyone better off. The more issues there are to trade, it would seem, the happier negotiators should be.

Work by DePaul University professor Charles Naquin challenges this conventional wisdom. Naquin found that subjects who negotiated a four-issue simulation were significantly more satisfied with their outcomes than were those who worked with eight issues. Although the latter group created demonstrably more value, they were less pleased with their results.

Why? Naquin discovered that the less satisfied negotiators engaged in more counterfactual thinking: i.e., they tended to second-guess themselves. Having more issues in the mix meant there were many more options to explore. In hindsight, negotiators could imagine the possibility of a better outcome if only they had handled talks differently.

Measuring satisfaction immediately after the negotiation, Naquin discovered participants’ tendency to dwell on positive results they may have missed instead of thinking about the large number of bad deals that they avoided. It’s possible that their feelings might have changed—for better or worse—as time passed. On the other hand, one’s level of satisfaction upon reaching agreement is a crucial factor in negotiation. Indeed, if a high number of issues makes for low contentment, people might get stuck in a stalemate.

There is no easy prescription. Adding issues should increase potential value, but even if you’re immune to the negative emotional effects that Naquin has found, you should consider whether increased complexity will lower your counterpart’s satisfaction—and hence, her willingness to settle. Narrowing the set of negotiable issues to a manageable number may not be optimal economically, but it may raise the odds of a deal.

Related Posts

Comments

No Responses to “Are Your Talks too Complex?”

Leave a Reply