Have you ever had dealings with a bad-faith bargainer—the type of negotiator who seems to enjoy wasting your time by stalling, making outrageous demands, and calling talks off at the last minute?

Researchers Edy Glozman (Columbia Law School), Netta Barak-Corren (Harvard Law School), and Ilan Yaniv (Hebrew University of Jerusalem) dub such parties “false negotiators”—those who have ulterior motives for negotiating with you. False negotiators believe they have better alternatives to any offer you could make, yet they are motivated to try to sustain or improve their BATNA, or best alternative to a negotiated agreement, by negotiating with you. They might hope to use an offer from you to get a better deal elsewhere or to drive up the price in a bidding war, for example.

Let’s take a closer look at such bad-faith negotiations and how to avoid them.

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Amazon’s HQ2 Search: A False Auction?

In the fall of 2017, Amazon created a stir when it announced it was taking bids from North American cities and regions interested in hosting its second headquarters, called HQ2. Driven by the promise of 50,000 jobs and a $5 billion campus promised to be the “full equal” of Amazon’s main campus in Seattle, 238 North American cities and regions set to work crafting proposals. Applicants promised the company millions and even billions in tax incentives, subsidies, and infrastructure spending.

In January 2018, Amazon narrowed the race to 20 cities/regions. Amazon toured proposed sites, requested “reams of data,” and secured detailed guarantees of tax incentives and other perks, according to the Wall Street Journal.

In November, the news leaked that Amazon had decided to split HQ2 between Long Island City, a neighborhood in the New York City borough of Queens, and Crystal City, a neighborhood in Arlington, Va., near Washington, DC. The states of New York and Virginia reportedly offered Amazon up to $2 billion in tax incentives, as well as investments in infrastructure and job training.

Amazon already had a strong presence in New York and Washington, and both regions had long been obvious sites for expansion. Reaction to the news that HQ2 was being divided between the two most obvious front-runners was bitter. Cities and regions that hired high-priced consultants to painstakingly craft their proposals felt they’d been used. As for Amazon, it had scored months of free publicity and privileged information, such as infrastructure plans.

Amid the firestorm of criticism that followed, Amazon briefly canceled the New York arm of its plan—only to lease office space in Midtown Manhattan for more than 1,500 employees months later. Some critics called it further proof of bad-faith negotiations. In the years since, Amazon has aggressively expanded its New York footprint.

Beware Bad-Faith Negotiations

How can you identify and avoid bad-faith negotiations? An experiment by Glozman and colleagues offers some clues.

The researchers gave participants incentives to avoid making a deal in a negotiation simulation. These “false negotiators” succeeded in reaching impasse by:

• Deliberately extending the negotiation process
• Making irrelevant statements and rambling about unrelated issues
• Mentioning constraints to their ability to reach agreement
• Assigning a representative with no negotiating authority to take over from them at the end of the negotiation

Glozman and colleagues advise us to view an array of these behaviors as a “syndrome” of signals that a counterpart is bargaining in bad faith.

Bad-Faith “Auctions”

Bad-faith bargaining may be especially common in auctions. When a seller has a hot commodity to offer, they might try to get the best offer possible from top prospects by luring them into a bidding war. In such an auction, the seller may have no interest in doing business with most bidders but engages them to help drive up the sale price.

Bidders in an auction are more likely to overpay for a commodity or contract when the competition is especially fierce, as it was in Amazon’s contest. When everyone seems desperate to win a prize, “auction fever” can become an epidemic. Bidders afflicted with auction fever want to win at any cost, even if that means paying more than the item up for sale is worth. But once their “auction high” wears off, winners often end up regretting their purchase.

Lessons from Bad-Faith Negotiations

How can you avoid being drawn into value-destroying bad-faith negotiations?

• Before engaging with a counterpart, research their reputation in their industry. Take negative reviews and other red flags seriously.
• Be skeptical of counterparts who expect you to invest significant amounts of time and money just to negotiate with them.
• Determine your BATNA in advance, and vow not to accept anything less. Resist the urge to offer pricey incentives just to remain competitive.
• Look for signs of bad-faith negotiations, such as repeated delays and talk of constraints.

Have you identified any other hallmarks of bad-faith negotiations?

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According to the Pew Research Center, women earned 82 cents for every dollar earned by men in 2022—a pay gap that has remained largely unchanged over time. The disparities are even greater when viewed through the lens of race and ethnicity: in 2022, Black women earned 70% as much as white men, while Hispanic women earned just 65%. Several factors contribute to these differences. Occupations dominated by women, such as teaching and nursing, often pay less than those dominated by men, like technology and management. Yet another important factor lies in the dynamics of salary negotiations, where men and women competing for comparable roles often experience—and approach—the process in markedly different ways.

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In particular, the degree to which incoming employees feel comfortable asserting themselves in starting salary negotiations may depend on their gender. When women negotiate for higher salaries, they must behave contrary to deeply ingrained societal gender roles of women as passive, helpful, and accommodating. As a result, their requests often face a backlash: relative to men who ask for more, women are penalized financially, are considered less hirable and less likable, and are less likely to be promoted, research by Hannah Riley Bowles of the Harvard Kennedy School and her colleagues shows. Men, by contrast, generally can negotiate for higher pay without fearing a backlash because such behavior is consistent with the stereotype of men as assertive, bold, and self-interested.

Research suggests remedies organizations and their leaders can attempt to reduce the impact of racial and gender bias in salary negotiations.

Negotiation Biases and Bargaining While Black

In a 2019 study, University of Virginia professor Morela Hernandez and her team assigned 144 working adults of different races (50% white, 27% African American, 14.6% Asian, 6.3% Hispanic, and 2.1% other), as well as 74 undergraduate students of different races, to play either a job candidate or a hiring evaluator in a 15-minute negotiation simulation over a job with a salary range of $82,000–$90,000. After they negotiated, the participants answered questions that assessed their level of racial bias.

The study results showed that white and Black candidates were equally likely to try to negotiate salary. However, evaluators who scored high for racial bias believed that Black candidates had negotiated more often than white candidates. This false perception led them to penalize Black candidates for negotiating by granting fewer salary concessions. By contrast, evaluators who scored low on racial bias had more accurate perceptions of candidates’ negotiating frequency and granted more equitable salaries. The results confirm that overt racial bias remains a significant obstacle for African Americans in the job market.

When Race and Gender Intersect

In a 2018 study, Negin R. Toosi of California State University and her colleagues explored how race and gender intersect to influence job candidates’ assertiveness in salary negotiations. In particular, they compared the negotiating behavior of white and Asian Americans.

Toosi and her team asked 980 white and Asian American men and women to imagine they had received a job offer from a consulting firm with a salary range of $31,000 to $54,000. How much would they ask for? White men and Asian women specified higher first offers ($48,247 and $47,797 on average, respectively) than white women and Asian men ($46,341 and $46,436 on average, respectively). Participants who aimed lower were more fearful of being punished for asking for too much. White women participants seemed to fear this type of backlash, but Asian women did not.

The findings suggest that when people belong to more than one minority group (such as “woman” and “Asian”), they are at risk of being overlooked. This “intersectional invisibility” can have negative consequences, such as leading certain groups to be underrepresented in organizations. Yet it may also reduce one’s likelihood of being measured against racial or gender stereotypes and falling short. Asian women participants in this experiment may have intuited this outcome and aimed high as a result.

More broadly, the research shows that race and gender need to be considered in tandem to avoid simplistic conclusions about how salary negotiations will unfold.

Promote More Equitable Salary Negotiations

To reduce the impact of racial and gender biases in salary negotiations and employment negotiations more generally, organizational and societal changes are needed. Because negotiation biases spring from faulty intuition, reducing the role of snap judgments in the decision-making process can promote more equitable job negotiations.

In her book What Works: Gender Equality by Design, Harvard Kennedy School professor Iris Bohnet recommends requiring decision makers to conduct structured rather than unstructured interviews. Noting that unstructured interviews have proven to be very bad at predicting employee performance, Bohnet explains that managers can make more rational hiring decisions by asking all candidates the same list of predetermined questions in the same order, scoring them during the interview, and then carefully comparing and weighting their answers.

Organizations would also benefit from publicizing pay-grade ranges and requiring decision makers to compare the salaries of those with comparable jobs. In addition, leaders should instruct negotiators not to ask candidates how much they earned in the past. Because women and minorities tend to earn less than white men, the question can put them at a disadvantage and perpetuate the gender pay gap. In fact, it is now illegal in many U.S. states to ask employees about their salary history.

What strategies have you found to be helpful for reducing bias in salary negotiations?

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In the fall of 2017, Amazon created a stir when it announced it was taking bids from North American cities and regions interested in hosting its second headquarters, known as HQ2. Driven by the promise of 50,000 jobs and a $5 billion campus that Amazon promised would be the “full equal” of its main campus in Seattle, 238 North American cities and regions set to work crafting proposals. Many cities, however, fell prey to deceptive tactics in negotiation in their hopes of winning a deal.

While Amazon required the cities and regions to sign nondisclosure agreements to keep details of the process hidden from their citizens, applicants promised the company millions and, in some cases, billions in tax incentives, subsidies, and infrastructure spending. In January 2018, Amazon narrowed the race to 20 cities/regions, including New York City, northern Virginia, Dallas, Toronto, and Atlanta. Amazon toured proposed sites, requested “reams of data,” and secured detailed guarantees of tax incentives and other perks, according to the Wall Street Journal. Then the search went quiet, and the contenders waited.

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In November, the news leaked that Amazon had decided to split HQ2 between Long Island City, a neighborhood in the New York City borough of Queens, and Crystal City, a neighborhood in Arlington, Va., across the Potomac River from Washington, D.C. The states of New York and Virginia reportedly offered Amazon up to $2 billion in tax incentives, dependent on the number of jobs ultimately created, and also promised to invest in infrastructure upgrades and job-training programs. Amazon already had a strong presence in New York and Washington, and both regions had long been considered obvious sites for expansion due to the size and quality of their labor pools. In addition, it’s been noted that Amazon CEO Jeff Bezos has a home in New York and in the Washington area, and he owns the Washington Post.

Although it was inevitable that the auction’s many losers would be disappointed, reaction to the news that HQ2 was being divided between the two most obvious front-runners, neither of which would be the “full equal” of the Seattle campus, was especially bitter. Many observers called the contest a farce and a sham, accusing Amazon of engaging in deceptive tactics in negotiation meetings. Cities and regions that hired high-priced consultants to painstakingly craft their proposals couldn’t help but feel they’d wasted their time and money.

As for Amazon, it ended the circus having scored months of free publicity and privileged information about cities and regions across North America. “It’s tempting to roll your eyes at this soap opera, but Amazon will walk away from this stunt with a cache of incredibly valuable data,” such as infrastructure plans, that it will use to “sideline the competition” in years to come, Stacy Mitchell of the Institute for Local Self-Reliance told the Times.

We don’t know whether Amazon considered each applicant in its HQ2 auction with an open mind, ready to be persuaded. But it’s clear that it could have met its goal without wasting the time and money of hundreds of cities and regions. The story illuminates how to avoid being drawn into deceptive tactics in negotiation and value-destroying auctions.

Identifying deceptive tactics in negotiation

In a 2015 study, researchers Edy Glozman (Columbia Law School), Netta Barak-Corren (Harvard Law School), and Ilan Yaniv (Hebrew University of Jerusalem) examined “false negotiations”—a negotiation in which one party has no desire to reach agreement with the other party. False negotiators believe they have better alternatives to any offer you could make, yet they are motivated to try to sustain or improve their BATNA, or best alternative to a negotiated agreement, by negotiating with you. They might hope to use an offer from you to get a better deal elsewhere or to drive up the price in a bidding war, for example.

How can you detect these deceptive tactics in negotiation meetings? The results of an experiment the researchers conducted offer some clues. Participants who were given incentives to avoid making a deal in a negotiation simulation succeeded in reaching impasse by:

• Deliberately extending the negotiating process
• Making irrelevant statements and rambling about unrelated issues
• Mentioning constraints to their ability to reach agreement, even as they promised to cooperate
• Assigning a representative with no negotiating authority to take over from them at the end of the negotiation

Glozman and colleagues advise us to view an array of these behaviors as a “syndrome” of signals that your counterpart is bargaining in bad faith. When you observe such behaviors, think about any hidden motives the other side may have to take advantage of your goodwill.

A feverish auction

Deceptive tactics in negotiation may be especially common in auctions. When a seller has a hot commodity to offer, he might try to get the best offer possible from his top prospects by luring them into a bidding war. In such an auction, the seller may have no interest in doing business with most bidders but engages them to help drive up the sale price.

Bidders in an auction are more likely to overpay for a commodity or contract when the competition is especially fierce, as it was in Amazon’s contest. When everyone seems desperate to win a prize, “auction fever” can become an epidemic. Bidders afflicted with auction fever want to win at any cost, even if that means paying more than the item up for sale is worth. But once their “auction high” wears off, winners often end up regretting their purchase.

Amazon’s HQ2 contest seems to have been designed to generate maximum corporate subsidies from the winning bidder (or bidders). “By pitting cities against one another, Amazon created a frenzy of ever more lavish and outlandish offers,” writes Bryce Covert in a New York Times op-ed. Maryland offered $6.5 billion in tax incentives; its transportation secretary promised to write Amazon a “blank check.” Newark, N.J., promised $7 billion, while Columbus, Ohio, said it would waive all of Amazon’s property taxes for 15 years.

A particularly insidious aspect of Amazon’s HQ2 competition is that, by pitting cities and regions against one another, it encouraged them to bid against their own self-interest.

Economists largely agree that corporate welfare, in the form of tax incentives and other handouts, doesn’t benefit communities in the long run and often harms them financially. There’s little correlation between a state’s giveaways and its unemployment rate or income levels, according to research by W.E. Upjohn Institute for Employment Research economist Timothy Bartik. And foregone tax revenue contributes to budget shortfalls, with schools, infrastructure, and critical city services suffering the most.

While cities and states seemed to heed economists’ warnings by offering fewer tax incentives over the past decade following a slew of disastrous deals in the 1990s, corporate welfare appears to be making a comeback, according to the Times. The sky-high subsidies promised to Amazon and the $4 billion in incentives that the state of Wisconsin offered Taiwanese electronics manufacturer Foxconn in 2017 are two prominent examples. Politicians in the winning jurisdictions, such as former New York State governor Andrew Cuomo and former New York City mayor Bill de Blasio, relish the positive PR that comes with announcements of jobs and economic development. By the time a project fails to pay off, the politicians often have moved on and don’t have to deal with the fallout, Covert notes.

Interestingly, tax incentives often aren’t even necessary to lure a company to a region. About two-thirds of the time, they’re offered to companies that would have moved to the area anyway, according to Bartik. Corporations tend to base their site decisions on other factors, such as a strong talent pool, affordable housing, and good public transit.

Amazon, which generated more than $457 billion in revenue in 2021 and has a market cap over $1.7 trillion, doesn’t need gigantic giveaways and likely would have expanded without them in the same locales. “Why should the richest man in the history of the world get money to open his business?” Washington, D.C.–area hardware store owner Gina Schaefer asked the Times, referring to Bezos.

How can states and cities, or multiple companies in the same industry, avoid being drawn into value-destroying bidding wars? By staying out of them. Counties in Ohio and Colorado have reached agreements to stop using tax breaks to compete with one another, the Times reports. Organizations facing auctions where price is the main or only criteria at stake should encourage the seller to negotiate with them and any other front-runners individually instead of holding an auction. Explain to the seller that you believe you’ll both benefit from discussing a host of issues rather than focusing exclusively on price.

Lessons from a PR stunt:

• Before entering an auction, assess your likelihood of winning and decide whether it is worth the investment of time and money.
• To avoid being one of many bidders in an auction, try to convince the seller of the benefits of negotiating with you individually.
• If you do decide to enter an auction, determine your upper bidding limit and vow not to pay a penny more. Resist the urge to offer pricey incentives just to remain competitive.
• To avoid wasting your time, look for signs of deceptive tactics in negotiation, such as repeated delays.

When choosing new business partners, we size them up to decide whether they are trustworthy. Interestingly, international cultural differences can influence the way in which we make such determinations, Jeanne Brett, Professor Emeritus of Management & Organizations at Northwestern University’s Kellogg School of Management, and Louisiana State University professor Tyree Mitchell found in a new study. We spoke to Brett, the author of Negotiating Globally: How to Negotiate Deals, Resolve Disputes, and Make Decisions Across Cultural Boundaries (Jossey-Bass, 2001), about the implications of the study’s findings for negotiators.

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How do negotiators assess whether to trust a potential new partner?

Jeanne Brett: Some negotiators do a lot of work away from the negotiation table, typically before it begins, gathering information about the potential partner and the organization he or she represents. Some negotiators seek introductions to the potential partner from trusted third parties. Others prefer to rely on their own assessment of the potential partner before or during the negotiation itself rather than relying on what others say about him or her. Negotiators in all cultures use small talk about sports, weather, travel, and sometimes even politics to find common ground and assess trust. For some negotiators, common ground—for example, discovering that both negotiators have daughters who play soccer—is a strong foundation on which to begin building a relationship. For others, such discoveries are nice but not necessary.

What were some of the findings to emerge from your study?

JB: It was no surprise that there are international cultural differences regarding trust in negotiation. In my research from 2017 with Brian Gunia (Johns Hopkins University) and Brosh Teucher (St. Michael’s College), World Values Survey data showed clear regional differences in interpersonal trust. Negotiation is a social context in which trust is very important, so in this new research, Tyree Mitchell and I expected, and certainly found, parallels between cultural levels of interpersonal trust and individual negotiators’ level of trust. Specifically, we found that interviewees from the West tended to be very trusting of new potential business partners. Trust was also moderately high in East Asia. It was low in the Middle East and South Asia, and very low in Latin America.

Trust begets trust, so starting off with the assumption that a potential partner is trustworthy has a good chance of paying off. In line with their trusting nature, our interviewees from Western nations (such as Germany, Italy, and the United States) tended to plunge directly into negotiations.

Our interviewees from Middle Eastern, South Asian, and Latin American nations (including Kuwait, India, Mexico, and Brazil), who were less trusting than those from the West, reported being more likely to spend time getting to know their counterparts away from the negotiating table before plunging into substantive talks.

Many of our interviewees from East Asia (for example, China and Japan) reported that they were concerned about not only assessing their potential partner’s trustworthiness but also determining whether the potential partner could actually do the work required. This finding, which reflects the common tendency to avoid saying no in these cultures, sheds light on what may seem to Westerners like an overly prolonged focus on past accomplishments when negotiating with East Asians.

How can negotiators apply these findings to their own negotiations?

JB: There are three clear benefits to learning about international cultural differences when negotiating globally. First, when you observe the behavior you’ve learned about, you can identify that it is cultural.

Second, when you can label behavior as cultural and match it with some explanatory cultural insights, you can often make adjustments and keep the cultural behavior from interfering with the developing negotiation relationship.

Third, if you know what is normative culturally for your counterpart, you can arrive prepared to engage with that behavior in a manner that preserves your own integrity and is respectful to the other party.

What have you noticed about international cultural differences in your negotiations?

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When choosing new business partners, we size them up to decide whether they are trustworthy. Interestingly, the way in which we make such determinations depends a great deal on our nationalculture, Jeanne Brett, the DeWitt W. Buchanan, Jr. Distinguished Professor of Dispute Resolution andOrganizations at Northwestern University’s Kellogg School of Management, and Louisiana State University professor Tyree Mitchell found in a new study. We spoke to Brett, the author of Negotiating Globally: How to Negotiate Deals, Resolve Disputes, and Make Decisions Across Cultural Boundaries (Jossey-Bass, 2001), about the implications of the study’s findings for negotiators.

Negotiation Briefings: How do negotiators assess whether to trust a potential new partner?

Jeanne Brett: Some negotiators do a lot of work away from the negotiation table, typically before it begins, gathering information about the potential partner and the organization he or she represents. Some negotiators seek introductions to the potential partner from trusted third parties. Others prefer to rely on their own assessment of the potential partner before or during the negotiation itself rather than relying on what others say about him or her. Negotiators in all cultures use small talk about sports, weather, travel, and sometimes even politics to find common ground and assess trust. For some negotiators, common ground—for example, discovering that both negotiators have daughters who play soccer—is a strong foundation on which to begin building a relationship. For others, such discoveries are nice but not necessary.

NB: What were some of the findings to emerge from your study?

JB: It was no surprise that trust in negotiation varied systematically by culture. In my research from 2017 with Brian Gunia (Johns Hopkins University) and Brosh Teucher (St. Michael’s College), World Values Survey data showed clear regional differences in interpersonal trust. Negotiation is a social context in which trust is very important, so in this new research, Tyree Mitchell and I expected, and certainly found, parallels between cultural levels of interpersonal trust and individual negotiators’ level of trust. Specifically, we found that interviewees from the West tended to be very trusting of new potential business partners. Trust was also moderately high in East Asia. It was low in the Middle East and South Asia, and very low in Latin America.

Trust begets trust, so starting off with the assumption that a potential partner is trustworthy has a good chance of paying off. In line with their trusting nature, our interviewees from Western nations (such as Germany, Italy, and the United States) tended to plunge directly into negotiations.

Our interviewees from Middle Eastern, South Asian, and Latin American nations (including Kuwait,
India, Mexico, and Brazil), who were less trusting than those from the West, reported being more likely to spend time getting to know their counterparts away from the negotiating table before plunging into substantive talks.

Many of our interviewees from East Asia (for example, China and Japan) reported that they were concerned about not only assessing their potential partner’s trustworthiness but also determining whether the potential partner could actually do the work required. This finding, which reflects the common tendency to avoid saying no in these cultures, sheds light on what may seem to Westerners like an overly prolonged focus on past accomplishments when negotiating with East Asians.

NB: How can negotiators apply these findings to their own negotiations?

JB: There are three clear benefits to learning about intracultural norms when negotiating globally. First, when you observe the behavior you’ve learned about, you can identify that it is cultural.

Second, when you can label behavior as cultural and match it with some explanatory cultural insights, you can often make adjustments and keep the cultural behavior from interfering with the developing negotiation relationship.

Third, if you know what is normative culturally for your counterpart, you can arrive prepared to engage with that behavior in a manner that preserves your own integrity and is respectful to the other party.

They say negotiation is an art, and that certainly was the case on October 5, 2018, when the mysterious artist known as Banksy turned a Sotheby’s auction into a clever—and very expensive—piece of performance art.

Drawing a crowd

An anonymous and highly celebrated street artist, British-based Banksy is known for his subversive graffiti and cheeky pranks, such as the time he snuck one of his canvases onto a wall in New York’s Metropolitan Museum of Art for two hours. The artist’s work is rarely sold, mainly because most of it is painted on buildings, but this past fall, he allowed a spray-painted canvas from 2000 called Girl With Balloon to be sold at the venerable Sotheby’s auction house in London.

A video Banksy later released of the fateful night shows frenzied bidding in the auction room, mainly by representatives of bidders who phoned in to keep their identities concealed—a detail the undercover artist might have appreciated. When the dust settled, one of those unidentified bidders had won the painting for $1.4 million. Applause erupted, an alarm went off—and those present gasped in shock as Banksy’s painting descended through the bottom of the frame and emerged shredded into ribbons. Midway through its destruction, the painting halted, half of it in the frame, the other half hanging beneath it like fringe.

“We’ve been Banksy-ed,” Alex Branczik, Sotheby’s head of contemporary art in Europe, said in a press conference afterward. The auction house insisted it was just as bewildered by the prank as anyone. But some believed Sotheby’s was involved in it, noting the painting’s unusually thick and heavy frame, the New York Times reports.

A sketchy deal

The video Banksy released the following day showed an unknown man in the auction room operating a hidden electronic device that appeared to have activated a shredder concealed in the painting’s frame. “A few years ago I secretly built a shredder into a painting in case it was ever put up for auction,” Banksy wrote in a caption. He closed the video with a quote attributed to Pablo Picasso: “The urge to destroy is also a creative urge.”

In a video clip released later on YouTube, Banksy revealed he had intended for the painting to be completely destroyed but that the shredder had jammed. “In rehearsals it worked every time,” a caption said. Banksy also denied that Sotheby’s was aware of the prank.

In an interview with the Art Newspaper, Branczik also denied any sort of collusion, saying that Sotheby’s had asked the company representing Banksy if the gaudy frame could be removed from the painting before the auction and was told the frame was “integral to the artwork.” A third-party conservator working for Sotheby’s had inspected the frame, Branczik said, but did not take it apart. Neither the representative nor the auction house would say whether Banksy had been the seller of the painting, though some evidence suggests the artist gifted it to his publicist, Jo Brooks, in 2006.

Masterpiece theater

At first blush, it might seem as if the winning bidder for Girl With Balloon was suckered. After all, wasn’t activist Banksy poking fun at the commodification of art and the high prices paid at auctions? But it quickly became clear that the stunt had only enhanced the painting’s value, with one prominent critic calling it a “masterpiece of radical performance,” according to the Times.

In a statement released by Sotheby’s, the anonymous European collector who placed the winning bid on the painting said she was initially “shocked” by the shredding of the painting, but “gradually I began to realize that I would end up with my own piece of art history.” Apparently given the option to nullify the sale, she chose to move forward with it, the Art Newspaper reports.

In response to Sotheby’s request for a new authentication of the piece, a representative for Banksy revealed that Girl With Balloon had been designated an entirely new piece of art postshredding and renamed Love Is in the Bin.

Portrait of an auction

The peculiar tale of an auction gone delightfully awry might appear to have little to do with other dealmaking scenarios, but a few broad strokes can be divined from the stunt:

• Prepare for surprises. Negotiations and auctions seldom go as planned. The best we can do is prepare as much as possible for best-case and worst-case scenarios—and everything in between.
• Beware anonymity. When negotiators or auction participants hide under a cloak of anonymity, almost anything goes. Negotiate with unidentified parties at your own risk.
• Be a creative dealmaker. We’re not suggesting you put your next contract through the shredder upon signing, but stunts such as Banksy’s remind us that creativity and humor can bring a lot to the table.
• To create, might you destroy? Paradoxically, Banksy may have increased his painting’s symbolic and financial value through its partial destruction. It’s worth considering whether alteration might heighten the appeal of other commodities.

They say negotiation is an art, and that certainly was the case on October 5, 2018, when the mysterious artist known as Banksy turned a Sotheby’s auction into a clever—and very expensive—piece of performance art.

Drawing a crowd

An anonymous and highly celebrated street artist, British-based Banksy is known for his subversive graffiti and cheeky pranks, such as the time he snuck one of his canvases onto a wall in New York’s Metropolitan Museum of Art for two hours. The artist’s work is rarely sold, mainly because most of it is painted on buildings, but this past fall, he allowed a spray-painted canvas from 2000 called Girl With Balloon to be sold at the venerable Sotheby’s auction house in London.

A video Banksy later released of the fateful night shows frenzied bidding in the auction room, mainly by representatives of bidders who phoned in to keep their identities concealed—a detail the undercover artist might have appreciated. When the dust settled, one of those unidentified bidders had won the painting for $1.4 million. Applause erupted, an alarm went off—and those present gasped in shock as Banksy’s painting descended through the bottom of the frame and emerged shredded into ribbons. Midway through its destruction, the painting halted, half of it in the frame, the other half hanging beneath it like fringe.

“We’ve been Banksy-ed,” Alex Branczik, Sotheby’s head of contemporary art in Europe, said in a press conference afterward. The auction house insisted it was just as bewildered by the prank as anyone. But some believed Sotheby’s was involved in it, noting the painting’s unusually thick and heavy frame, the New York Times reports.

A sketchy deal

The video Banksy released the following day showed an unknown man in the auction room operating a hidden electronic device that appeared to have activated a shredder concealed in the painting’s frame. “A few years ago I secretly built a shredder into a painting in case it was ever put up for auction,” Banksy wrote in a caption. He closed the video with a quote attributed to Pablo Picasso: “The urge to destroy is also a creative urge.”

In a video clip released later on YouTube, Banksy revealed he had intended for the painting to be completely destroyed but that the shredder had jammed. “In rehearsals it worked every time,” a caption said. Banksy also denied that Sotheby’s was aware of the prank.

In an interview with the Art Newspaper, Branczik also denied any sort of collusion, saying that Sotheby’s had asked the company representing Banksy if the gaudy frame could be removed from the painting before the auction and was told the frame was “integral to the artwork.” A third-party conservator working for Sotheby’s had inspected the frame, Branczik said, but did not take it apart. Neither the representative nor the auction house would say whether Banksy had been the seller of the painting, though some evidence suggests the artist gifted it to his publicist, Jo Brooks, in 2006.

Masterpiece theater

At first blush, it might seem as if the winning bidder for Girl With Balloon was suckered. After all, wasn’t activist Banksy poking fun at the commodification of art and the high prices paid at auctions? But it quickly became clear that the stunt had only enhanced the painting’s value, with one prominent critic calling it a “masterpiece of radical performance,” according to the Times.

In a statement released by Sotheby’s, the anonymous European collector who placed the winning bid on the painting said she was initially “shocked” by the shredding of the painting, but “gradually I began to realize that I would end up with my own piece of art history.” Apparently given the option to nullify the sale, she chose to move forward with it, the Art Newspaper reports.

In response to Sotheby’s request for a new authentication of the piece, a representative for Banksy revealed that Girl With Balloon had been designated an entirely new piece of art postshredding and renamed Love Is in the Bin.

Portrait of an auction

The peculiar tale of an auction gone delightfully awry might appear to have little to do with other dealmaking scenarios, but a few broad strokes can be divined from the stunt:

• Prepare for surprises. Negotiations and auctions seldom go as planned. The best we can do is prepare as much as possible for best-case and worst-case scenarios—and everything in between.
• Beware anonymity. When negotiators or auction participants hide under a cloak of anonymity, almost anything goes. Negotiate with unidentified parties at your own risk.
• Be a creative dealmaker. We’re not suggesting you put your next contract through the shredder upon signing, but stunts such as Banksy’s remind us that creativity and humor can bring a lot to the table.
• To create, might you destroy? Paradoxically, Banksy may have increased his painting’s symbolic and financial value through its partial destruction. It’s worth considering whether alteration might heighten the appeal of other commodities.

This past July, the principal flutist of the Boston Symphony Orchestra (BSO), Elizabeth Rowe, became the first Massachusetts resident to sue her employer under a new state law designed to address the persistent pay gap between men and women. Despite being the most frequent soloist among the BSO’s principal musicians, Rowe earns only about 75% of the salary of her closest comparable colleague, the BSO’s principal oboist, John Ferrillo, and also earns less than four other principal male players, adjusted for seniority. Ferrillo and Rowe, who joined the symphony in 2001 and 2004, respectively, sit next to each other in the orchestra, and both lead woodwind sections from endowed chairs. Rowe is seeking $200,000 in back pay.

According to her lawsuit, Rowe asked the BSO several times in recent years to adjust her pay and was rebuffed. She sued one day after the Massachusetts Equal Pay Act went into effect. The law stipulates that employers cannot pay workers less than what they pay employees of a different gender for comparable work—that is, work requiring substantially similar skill, effort, and responsibility performed under similar working conditions.

In a statement attached to Rowe’s complaint, Ferrillo called Rowe his “peer and equal” and noted that they work so closely that “we jokingly refer to playing Floboe.” Rowe is “at least as worthy of the compensation that I receive as I am,” he wrote.

In an August court filing, the BSO denied Rowe’s allegations of gender-based pay discrimination, arguing that “the flute and the oboe are not comparable instruments” and that Rowe’s pay is higher than that of numerous other male principal BSO members.

Regardless of how Rowe’s case plays out, the gender discrimination she alleges is not unique. According to the Pew Research Center, women earned 82 cents for each dollar earned by men in 2017, a pay gap that has persisted over time. Women earn less than men in part because jobs performed mainly by women (such as teaching and nursing) pay less than those dominated by men (such as technology and management). But differences in how salary negotiations unfold for men and women vying for comparable jobs appear to be another contributor to the pay gap.

In particular, the degree to which incoming employees feel comfortable assertively negotiating their starting salary may depend on their gender. When women negotiate for higher salaries, they must behave contrary
to deeply ingrained societal gender roles of women as passive, helpful, and accommodating. As a result, their requests often face a backlash: relative to men who ask for more, women are penalized financially, are considered less hirable and less likable, and are less likely to be promoted, research by Hannah Riley Bowles of the Harvard Kennedy School and others shows. Men, by contrast, generally can negotiate for higher pay without fearing a backlash because such behavior is consistent with the stereotype of men as assertive, bold, and self-interested.

But gender is only one aspect of the pay gap. In 2016, college-educated black men earned about 80% of the hourly wages of college-educated white men, while black men overall earned just 68% of that earned by white men, according to the Pew Research Center. Also in 2016, Hispanic women earned only 62.2% of the wages of white men. Asian women fared better, earning 95.8% of white men’s earnings in 2016, but only earned 78.4% of what Asian men made that year.

As these statistics suggest, the pay gap is more complex than it first appears. Two recent studies illuminate these complexities and suggest remedies organizations and their leaders can attempt to reduce the impact of racial and gender bias in employment negotiations.

Bargaining while black

In a recent study, University of Virginia professor Morela Hernandez and her team assigned 144 male and female working adults of different races (50% white, 27% African American, 14.6% Asian, 6.3% Hispanic, and 2.1% other), as well as 74 male and female undergraduate students of different races, to play either a job candidate or a hiring evaluator in a 15-minute negotiation simulation over a job with a salary range of $82,000–$90,000. After they negotiated, the participants answered questions that assessed their level of racial bias.

The study results showed that white and black candidates were equally likely to try to negotiate their salary. However, evaluators who scored high for racial bias believed that black candidates had negotiated more often than white candidates. This false perception, likely based on the biased evaluators’ expectation that black candidates would and should settle for less, led them to penalize black candidates for negotiating by granting fewer salary concessions. In fact, each time a black candidate was perceived to have made an offer or counteroffer, participants high in racial bias gave them about $300 less in starting salary, on average. By contrast, evaluators who scored low on racial bias had more accurate perceptions of candidates’ negotiating frequency and granted more equitable salaries as a result.

Considerable research evidence finds that virtually all of us are subject to implicit racial biases that lead us to treat others unfairly and inequitably, often contrary to our well-meaning intentions. Such “ordinary prejudice,” as psychologists call it, is widespread and rooted in the human brain’s tendency to categorize and make snap judgments. But Hernandez’s study leads to the sobering conclusion that explicit racial bias—a belief in the dominance of certain groups over other groups, based on factors such as race—remains a significant obstacle for African Americans in the job market.

When race and gender intersect

In a famous study from 1995, Yale University professor Ian Ayres found that car dealers made significantly higher opening offers to black and female participants than to white males, who ended up getting much better deals as a result. Specifically, average dealer profit was $362 from white men, $504 from white women, $783 from black men, and $1,237 from black women. This was true despite the fact that the participants were trained in advance to negotiate in the same way.

The study results starkly illustrate that in negotiation, racial and gender biases can intersect in ways that harm some groups and benefit others. White women appeared to benefit from racial stereotypes relative to blacks in the Ayres study, for example, but to be harmed by gender stereotypes relative to white men. Meanwhile, black women seemed to suffer from negative gender and racial stereotypes in the car-buying negotiations.

In a new study, Negin R. Toosi of California State University and her colleagues explored how race and gender intersect to influence job candidates’ assertiveness in salary negotiations. In particular, they compared the negotiating behavior of white and Asian Americans. Asian Americans face stereotypes that paint them as unassertive and submissive. Might Asian American women then face the “double jeopardy” of both racial and gender biases in salary negotiations?

To find out, Toosi and her team asked 980 white and Asian American men and women to imagine they had received a job offer from a consulting firm with a salary range of $31,000 to $54,000. How much would they ask for if they could make the first offer? Interestingly, white men and Asian women specified higher first offers ($48,247 and $47,797 on average, respectively) than white women and Asian men ($46,341 and $46,436 on average, respectively). Further analysis showed that participants who aimed lower had a greater fear of being punished for asking for too much. Interestingly, white women in this study seemed to fear this type of backlash, but Asian women did not.

Contrary to the double-jeopardy hypothesis, the findings support past research showing that when people belong to more than one minority group (such as “woman” and “Asian”), they are at risk of being overlooked. This “intersectional invisibility” can have negative consequences, such as leading certain groups to be underrepresented in organizations. Yet it may also reduce one’s likelihood of being measured against racial or gender stereotypes and falling short. Asian women participants in this experiment may have intuited this outcome and aimed high as a result, though this possibility still needs to be tested.

This research shows that race and gender need to be considered in tandem to avoid jumping to simplistic conclusions about how we are likely to be treated in job negotiations—and how we are likely to treat others.

Promote more equitable negotiations

There are steps that individual women and minority negotiators can take to avoid a backlash for behaving contrary to tired racial and gender stereotypes. For example, women have been advised to appear other-focused and nurturing when making salary requests by referencing their family’s financial needs or their desire to represent women as a whole. However, such behaviors can feel false, uncomfortable, and overly accommodating.

To reduce the insidious impact of racial and gender biases on hiring, compensation, and promotion negotiations, broader organizational and societal changes are needed. Because biases spring from faulty intuition, reducing the role of snap judgments in the decision-making process is an important step toward promoting more equitable job negotiations.

In her book What Works: Gender Equality by Design (Belknap Press, 2016), Harvard Kennedy School professor Iris Bohnet recommends requiring decision makers to conduct structured rather than unstructured interviews. Noting that unstructured interviews have proven to be very bad at predicting employee performance, Bohnet explains that managers can make more rational hiring decisions by asking all candidates the same list of predetermined questions in the same order, scoring them during the interview, and then carefully comparing and weighting their answers on a scoring system.

Reducing the role of intuition can also improve salary negotiations. Organizations would benefit from publicizing pay-grade ranges and requiring decision makers to compare the salaries of those with comparable jobs. In addition, leaders should instruct negotiators not to ask candidates how much they earned in the past. Because women and minorities tend to earn less than white men, the question can put them at a disadvantage and perpetuate the gender pay gap. In fact, the Massachusetts Equal Pay Act and recent laws in several other states now make it illegal to ask employees about their salary history.

Resources:

“Bargaining While Black: The Role of Race in Salary Negotiations,” by Morela Hernandez, Derek R. Avery, Sabrina D. Volpone, and Cheryl R. Kaiser. Journal of Applied Psychology, 2018.

“Who Can Lean In? The Intersecting Role of Race and Gender in Negotiations,” by Negin R. Toosi, Shira Mor, Zhaleh Semnani-Azad, Katherine W. Phillips, and Emily T. Amanatullah. Psychology of Women Quarterly, 2018.

When setbacks arise in negotiation— from a take-it-or-leave-it offer to a walkout to an unexpected economic downturn—we’re faced with several choices. We can end the negotiation temporarily or permanently, we can double down and escalate conflict and competition, or we can see the setback as an opportunity for growth. By training ourselves to take this last approach, we can improve our odds of recovering from adverse events and reaching more satisfying outcomes, write Benjamin Lewis, a graduate of the University of Melbourne, and his colleagues in a new research study.

In their study, Lewis and his team drew on findings from psychological research showing that people who focus on the positive consequences of adverse events are more likely to overcome them and grow from them than those who focus on the more obvious negatives. “Cognitive reappraisal”—that is, seeing the silver lining beneath a setback—makes people more resilient, less depressed, and more satisfied on the job.

The researchers assigned pairs of participants to engage in two consecutive simulated employment contract negotiations, with one person playing a café owner and the other playing an employee. Some of the pairs were given a difficult negotiation challenge: to agree on the employee’s hourly wage despite the fact that there was no overlap between the minimum the employee wanted to accept and the most the employer planned to offer. Among the 20 pairs in this condition, only five reached agreement. For other pairs, the negotiation was set up to be much easier, as there was an overlap between how much the employer would pay and how much the employee would demand. In this condition, all but one pair reached agreement.

Next, all the participants were asked to individually write about a moment or event during the negotiation that was particularly challenging. Some of them were also asked to focus on the benefits of the challenge, such as how they might use it to improve their performance in future negotiations or whether it led them to recognize any new skills in themselves. Other participants instead were asked to focus on the difficult aspects of the negotiation, including aspects that might worsen their performance in future negotiations or weaknesses they’d noticed in their approach.

After that, the negotiating pairs regrouped and were asked to imagine that six months had passed. They then renegotiated the employee’s contract on issues such as scheduling and a potential raise. They all reached agreement after 20 minutes, and the researchers measured their level of satisfaction with aspects of the negotiation. The results showed that negotiators who had faced a difficult negotiation were more satisfied with the process and with their relationship with the other party when they had written about the benefits of a setback in their prior negotiation than when they had written about difficulties caused by that adverse event.

Overall, the results suggest that when we’re facing a significant challenge in a negotiation or have just ended a difficult bargaining situation, we should take time to think about what we can learn from the experience and how we can use it to grow and improve rather than simply dwelling on what went wrong.

Resource: “See the Benefit: Adversity Appraisal and Subjective Value in Negotiation,” by Benjamin Lewis, Mara Olekalns, Philip L. Smith, and Brianna Barker Caza. Negotiation Journal, 2018.

When setbacks arise in negotiation— from a take-it-or-leave-it offer to a walkout to an unexpected economic downturn—we’re faced with several choices. We can end the negotiation temporarily or permanently, we can double down and escalate conflict and competition, or we can see the setback as an opportunity for growth. By training ourselves to take this last approach, we can improve our odds of recovering from adverse events and reaching more satisfying outcomes, write Benjamin Lewis, a graduate of the University of Melbourne, and his colleagues in a new research study.

In their study, Lewis and his team drew on findings from psychological research showing that people who focus on the positive consequences of adverse events are more likely to overcome them and grow from them than those who focus on the more obvious negatives. “Cognitive reappraisal”—that is, seeing the silver lining beneath a setback—makes people more resilient, less depressed, and more satisfied on the job.

The researchers assigned pairs of participants to engage in two consecutive simulated employment contract negotiations, with one person playing a café owner and the other playing an employee. Some of the pairs were given a difficult negotiation challenge: to agree on the employee’s hourly wage despite the fact that there was no overlap between the minimum the employee wanted to accept and the most the employer planned to offer. Among the 20 pairs in this condition, only five reached agreement. For other pairs, the negotiation was set up to be much easier, as there was an overlap between how much the employer would pay and how much the employee would demand. In this condition, all but one pair reached agreement.

Next, all the participants were asked to individually write about a moment or event during the negotiation that was particularly challenging. Some of them were also asked to focus on the benefits of the challenge, such as how they might use it to improve their performance in future negotiations or whether it led them to recognize any new skills in themselves. Other participants instead were asked to focus on the difficult aspects of the negotiation, including aspects that might worsen their performance in future negotiations or weaknesses they’d noticed in their approach.

After that, the negotiating pairs regrouped and were asked to imagine that six months had passed. They then renegotiated the employee’s contract on issues such as scheduling and a potential raise. They all reached agreement after 20 minutes, and the researchers measured their level of satisfaction with aspects of the negotiation. The results showed that negotiators who had faced a difficult negotiation were more satisfied with the process and with their relationship with the other party when they had written about the benefits of a setback in their prior negotiation than when they had written about difficulties caused by that adverse event.

Overall, the results suggest that when we’re facing a significant challenge in a negotiation or have just ended a difficult bargaining situation, we should take time to think about what we can learn from the experience and how we can use it to grow and improve rather than simply dwelling on what went wrong.

Resource: “See the Benefit: Adversity Appraisal and Subjective Value in Negotiation,” by Benjamin Lewis, Mara Olekalns, Philip L. Smith, and Brianna Barker Caza. Negotiation Journal, 2018.