What are concessions in negotiation? Concessions are the compromises or adjustments a negotiator makes to their original demands to move closer to agreement with their counterpart(s).
Key Insights
- The core concept: Effective concessions require strategic trade-offs and reciprocation rather than one-sided capitulation.
- The power of trade-offs: While single-issue ultimatums can trigger a destructive win-lose showdown, expanding a dispute to include multiple issues creates opportunities for mutual gain.
- The strategy: Make decreasing and contingent concessions, and de-escalate hardball tactics by reframing demands rather than retaliating.
Table of Contents
The Democrats’ Ultimatum
Is That All There Is?
Guidelines for Making Concessions in Negotiation
How Can You Make Smart Concessions?
Best Practices for Concessions in Negotiation
FAQs: Concessions in Negotiation
What should you do in a negotiation when the other party refuses to meet your key demand? It can be tempting to issue an ultimatum, but doing so is likely to box both parties into a corner.
That’s a lesson that Senate Democrats learned the hard way in the midst of the 2025 shutdown of the federal government. The decision of eight Democrats to concede on their chosen flagship issue in exchange for very little proved highly controversial—and violated best practices for making concessions in negotiation.
The Democrats’ Ultimatum
In September 2025, the Republican-controlled House of Representatives passed a funding bill for the 2026 fiscal year that excluded enhanced premium tax credits for Affordable Care Act (ACA) healthcare plans. In response, Senate Democrats issued a strict ultimatum: They said they would refuse to vote for any legislation that allowed the subsidies to expire. Both parties refused to compromise before the September 30 funding deadline, and the federal government shut down on October 1.
With the government negotiations largely at a standstill, the shutdown dragged on for more than a month and inflicted significant pain on ordinary Americans, as federal employees worked without pay, federal food aid (aka Supplemental Nutrition Assistance Program, or SNAP, benefits) dried up, and travel was disrupted. Rather than negotiating with Democrats, President Donald Trump put pressure on them to back down from their ACA ultimatum by firing some federal workers and fighting in the courts to prevent SNAP benefits from being reinstated.
The takeaway: Issuing an ultimatum can seem like the only way to defend core principles. But if the other side responds with aggressive counterthreats, you can quickly become trapped between a harmful standoff and a humiliating retreat.
Is That All There Is?
Opinion polls showed the public blamed Republicans more than Democrats for the shutdown. The Democrats’ decisive showing in November 4 elections across the country also appeared to add to their negotiating power.
Yet, on November 9, the news broke that eight members of the Democratic caucus had agreed to fund a bill that did not include the ACA tax credits. In exchange for backing down, the senators secured only modest concessions from Republican negotiators, including the promise of a future vote on the tax credits, the rehiring of federal employees fired by Trump, and a short-term ban on future workforce reductions, Politico reports.
The eight senators (seven Democrats and one Independent) reportedly made the concession after concluding that congressional Republicans and President Trump were willing to allow the shutdown to continue indefinitely without conceding on ACA subsidies, even as the pain inflicted on everyday Americans mounted. “I think people were saying ‘We’re not going to get what we want’” on the health subsidies, Maine Senator Angus King, one of the eight, said. “But in the meantime, a lot of people are being hurt.”
The shutdown’s expected end came as welcome relief to millions of Americans. But many Democrats were furious that the eight senators had given in on their key demand and wondered what the painful shutdown—the longest in U.S. history—had achieved. “Yay, we can finally get paid,” one civil servant told the New Yorker. “But at the same time, W.T.F. was it all for? We were used as pawns in a political game, with nothing to show for it but stress, emotional trauma, and credit-card debt.”
The takeaway: Enduring a painful impasse is ultimately self-defeating if you cave on your primary demand for very little in return. Unreciprocated concessions not only result in a poor deal but also, in a multiparty or team negotiation, can damage your credibility with your own constituents.
Guidelines for Making Concessions in Negotiation
The following advice points can assist you in making concessions in negotiation that improve the quality of your deals—and avoid the need for capitulation or impasse.
Make trade-offs, not ultimatums. In the most efficient negotiations, parties make value-creating trade-offs by proposing concessions on the issues that matter most to each of them. For example, if you value short turnaround from a service provider, you might offer to pay more up front in exchange for a tighter-than-usual deadline. If the other side can work quickly and values early payment, they should be happy to make the trade. You each get more of what you want with minimal pain.
By comparison, when one party makes a demand on a single issue, they box both sides into a corner: Each now faces a stark choice between standing firm and backing down. Such take-it-or-leave-it ultimatums ratchet up the odds of competition, impasse, and capitulation. Indeed, in the three previous lengthy government shutdowns, as the New Yorker writes, “the party forcing the issue wilted under public pressure without getting what it came for, as the other side pointed to the intensifying costs for federal workers and average Americans.”
In the 2025 appropriations negotiations, political polarization, animosity, power differences, and deep distrust all made effective collaboration challenging. Yet having so many issues at stake, from ACA benefits to border security to security funding for federal officials, offered rich opportunities for both sides to get more of what they wanted. The fact that the two sides needed each other to make a deal—rather than being able to walk away and find a different partner, as is true of most business negotiations—offered further motivation for productive concessions in negotiation. Both sides squandered the opportunity.
Insist on reciprocation. The eight senators broke the most cardinal rule around making concessions in negotiation: Don’t make a concession without getting something of significance in return. When you make an unreciprocated concession, or fold completely, you signal weakness that could set you up to be taken advantage of in future negotiations.
Make decreasing concessions. When making concessions, start off with the largest concession you’re willing to make, then offer less and less in subsequent concessions. In their research, Kian Siong Tey and colleagues found that negotiators who offered concessions that decreased in size—rather than one large concession (as the eight senators did) or concessions that grew larger—got better deals.
Offer a contingent concession. What should you do when your counterpart seems completely self-interested? Harvard Business School Professor Deepak Malhotra recommends making a contingent concession. “A concession is contingent when you state that you can make it only if the other party agrees to make a specified concession in return,” he explains.
He gives the example of an executive who’s renegotiating a service contract with a customer who is demanding extra support for no extra fee. The executive might say, “We can provide additional support but only if you agree to purchase some of the following additional services” or “This is the best we can do on price, but if you can adjust some of your demands, we might be able to reopen the issue.” In the Senate negotiations, both Democrats and Republicans might have broken through their stalemate by replacing rigid demands with contingent concessions.
The takeaway: Never concede without receiving something in return. Try using contingent and decreasing concessions to signal your limits and encourage the other side to collaborate.
How Can You Make Smart Concessions?
- Avoid ultimatums. Expand the pie by looking for multiple issues to trade off, rather than drawing a hard line on a single demand.
- Defuse, don’t escalate. If the other party issues a threat or ultimatum, try ignoring it to give them the ability to back down without losing face.
- Take a break. Call a “time-out” to lower the emotional temperature. When talks resume, use active listening to diagnose the other party’s underlying needs.
- Insist on reciprocation. Never give something away for free. Always tie your concessions to a counter-concession from your counterpart.
- Pace yourself. Make concessions that decrease in size over time to signal that you are approaching your absolute limit.
Best Practices for Concessions in Negotiation
| Strategy | What Not to Do | What to Do |
| Trade-offs | Don’t make single-issue, take-it-or-leave-it ultimatums. | Do identify the issues that matter most to each party and propose trade-offs across them based on your differing priorities. |
| Reciprocation | Don’t give up on key interests while getting little in return. | Do insist on a counter-concession of equal or greater value to your own. |
| Pacing | Don’t make just a single concession. | Do start with your largest concession and make subsequent ones smaller. |
FAQs: Concessions in Negotiation
What are concessions in negotiation?
Concessions are adjustments, compromises, or sacrifices a negotiator makes to earlier proposals or offers. Negotiators make concessions to bridge the gap between parties’ demands and facilitate agreement.
How can I avoid looking weak when making a concession?
Always insist that the other party reciprocates your concessions and frame them as contingent on their flexibility. For instance, you might say, “I can adjust on price, but only if you can extend the contract timeline.”
Why are ultimatums risky in negotiation?
Ultimatums back all parties involved into a corner by requiring them to either completely capitulate or accept an impasse. This destroys opportunities for value creation and collaborative problem-solving.





