In negotiation, some justifications carry more persuasive weight than others, research shows. And knowing how to craft a counteroffer effectively can have a meaningful impact on the outcome. Consider this example: you’re a café owner seeking bids for a redesign of your space. One interior designer you’re considering is known for being affordable, though not particularly cutting-edge. Yet the designer’s initial estimate—$20,000—lands well above your $16,000 budget and seems high for the scope of work. As you prepare your counteroffer, you find yourself debating whether to highlight your financial constraints or to reference the designer’s more middlebrow reputation as part of your case for a lower price.

When preparing to negotiate price, buyers and sellers have access to plenty of advice about whether to make the first offer and, if they do, what price to choose. Making the first offer is often a smart move, especially if you have a strong sense of the value of the item or service being sold. The first offer often anchors the discussion that follows and, as such, can have a powerful effect on the final outcome.

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But what if the other side makes the first offer, whether because of convention, because you weren’t sure what to offer, or because they simply spoke up first? In such cases, you’ll need to be prepared to know how to counter with a strong rationale—one that not only resists the other party’s anchor but also makes a compelling case for the price you name.

When you present a persuasive rationale, you may increase your odds of reanchoring the discussion and avoiding impasse. But what types of rationales will help you reach your goals?

In a new study in the journal Organizational Behavior and Human Decision Processes, researchers Alice J. Lee, Assistant Professor of Organizational Behavior in the ILR School at Cornell University and Daniel R. Ames of Columbia University compared the effectiveness of two common types of rationales that buyers use when responding to a seller’s opening bid. We’ll consider how negotiators can benefit from these insights and present other tips for framing price offers in negotiation.

How to counter offer with constraints and complaints

Buyers can supply many types of rationales for their counteroffers. In their study, Lee and Ames focus on two of the most common rationales that buyers use: (1) constraint rationales and (2) disparagement rationales.

A constraint rationale focuses on the buyer’s own limitations, which are typically financial. Returning to our opening scenario, for example, the café owner might respond to the designer’s opening bid of $20,000 by saying, “That’s way over my budget and won’t work for me.”

By contrast, a disparagement rationale critiques what the seller is offering. For example, the café owner might say to the designer, “My understanding is that your services are pretty no-frills. Given what you’re offering, your price seems much too high.”

Both types of rationales appear to be very common in negotiation, Lee and Ames found when they videotaped pairs of MBA students engaging in a role-play negotiation as buyer and seller. About 90% of those in the role of buyer used constraint rationales, delivering two such rationales per negotiation, on average. And 95% of buyers used disparagement rationales—about five times, on average, per negotiation.

How to counter offer with a winning rationale

Which of these two types of rationale from the café owner do you think the designer would find more persuasive? In several experiments, Lee and Ames compared the effectiveness of constraint and disparagement rationales in various scenarios to determine how to counter offer most successfully.

In one experiment, the researchers asked participants to imagine they were participating in an online negotiation similar to the one we’ve described between a café owner and a potential designer. In the first phase of the experiment, those in the role of the café owner (the buyer) were told that the designer (the seller) submitted an initial estimate of $20,000 for the work. Some buyers were encouraged to focus on their budgetary constraints when responding with a counteroffer (constraint-rationale condition); others were prompted to focus on the mixed quality of the designer’s past work (disparagement rationale condition); while those in the control group were not given any special guidance.

In the next phase, all the participants assigned to the role of the designer (the seller) were told that the café owner had counteroffered $16,000. They also received the rationale formulated by their partner. Next, they responded to the $16,000 counteroffer and rationale with a counteroffer of their own.

The results? Sellers were significantly more swayed by constraint rationales than by disparagement rationales. Specifically, when offered $16,000 with a constraint rationale, sellers (those in the role of designer) responded with an average counteroffer of $17,059. But when offered $16,000 with a disparagement rationale, sellers’ average counteroffer was $18,375. In other words, when buyers justified a low counteroffer based on their own financial constraints, sellers conceded significantly more on price than when buyers disparaged sellers’ services to justify the same low counteroffer.

Sellers may view criticism as inaccurate and rude, and react by standing firm on price.

Relative to those who received disparagement rationales, sellers who were given constraint rationales also were more optimistic about the odds of reaching agreement and were more likely to recommend their counterpart to a friend. In other experiments, Lee and Ames found a similar pattern of results.

Why disparagement falls flat

There are two main reasons why providing information about your constraints is likely to be more effective than disparaging the seller’s products or services. First, and most obviously, sellers may view the criticism as inaccurate and rude, and react by standing firm on price. Second, when buyers describe their financial constraints, they are revealing valuable information about their bottom lines. Sellers may take buyers at their word when they say they simply can’t afford the deal on the table.

Constraint rationales are more effective than disparagement rationales when sellers know the value of what they’re selling. When a designer believes he is offering a competitive price for his services, for example, he may dismiss the café owner’s critique as merely a bargaining tactic. By contrast, when sellers are uncertain about the value of what they’re selling (such as a new product), they may take a buyer’s criticism to heart and offer a better price, Lee and Ames found in another experiment. Thus, this is one situation in which disparagement rationales may be relatively effective—but no more effective than citing your financial constraints.

Overall, the research offers valuable advice to buyers: When deciding how to counter offer a seller’s initial price, you are likely to get a better deal if you accompany your counteroffer with information about your financial constraints than if you try to diminish the value of what’s being sold.

3 other effective influence strategies

Here are some other influence strategies to use to improve the appeal of your price offers:

1. Highlight losses rather than gains.

People are more motivated to avoid losses than they are to achieve gains, research by the influential psychologists Amos Tversky and Daniel Kahneman shows. For example, in one study by researchers at the University of Santa Cruz, homeowners were asked to participate in a free energy audit and then listen to a sales pitch for insulation products and services that would lower their energy costs. When the insulation was pitched as a way to avoid losing money, homeowners were significantly more likely to purchase it than when it was pitched as a way to save money. Because losses weigh heavily on our minds, framing the exact same price as a loss likely will have a greater effect than framing it as a gain, write Deepak Malhotra and Max H. Bazerman in their book Negotiation Genius (Bantam, 2007).

2. Split up losses; combine gains.

Tversky and Kahneman also discovered in their research that people prefer to gain money in installments but to lose money in one lump sum. For example, most people would prefer to find a $10 bill two days in a row ($20 total) than to find a $20 bill once. Conversely, most people would prefer to lose a $20 bill than to lose a $10 bill two days in a row. Thus, when making a price concession, it can be smart to divide it into two or more smaller concessions. But when asking for a concession on price, make one demand rather than two or more partial demands, recommend Malhotra and Bazerman.

3. Avoid overjustifying.

A well-known 1978 psychology experiment by Ellen Langer, Arthur Blank, and Benzion Chanowitz suggested that even a lame justification for a first offer can be more effective than no justification at all. In the study, an experimenter who tried to cut in line to use a copier to make five copies was far more successful using the rather weak justification “May I use the Xerox machine, because I have to make some copies?” than when giving no justification at all for cutting in (“May I use the Xerox machine?”).
But in a 2011 paper, Tel Aviv University researchers Yossi Maaravi, Yoav Ganzach, and Asya Pazy noted that people tend to rebel against more significant requests with weak justifications. And in their research, they found that when a justification for an offer is easy to counter, it can inspire a backlash. So, for example, if you are a salesperson who has already shown off the many attractive features of your product, you can let your first price offer stand on its own.

What has your experience been in determining how to counter offer an initial price anchor?

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Have you ever wondered whether humor has a place in business negotiation—and when it’s appropriate to use it?

To explore this question, we spoke with Alison Wood Brooks, O’Brien Associate Professor of Business Administration and Hellman Faculty Fellow in the Negotiation, Organizations & Markets Unit at Harvard Business School. As an expert in the psychology of emotion and communication, Professor Brooks offers insight into how humor can influence trust, ease tension, and even shape negotiation outcomes when used thoughtfully.

Imagine this scenario:

You’re sitting with your company’s partners. The conversation stalls. Positions harden. The room tightens.

Then your boss cracks a well-timed joke. Laughter ripples across the table. The mood shifts. Suddenly, conversation flows again—and she manages to restate her position in a way that lands.

We’ve all seen humor revive a negotiation.

We’ve also seen jokes flop spectacularly.

So when—and how—should humor be used at the bargaining table?

Why Humor Matters in Negotiation

Humor may seem frivolous in serious business settings. But few conversational strategies shift emotional tone as quickly or powerfully.

Research in negotiation and organizational behavior shows that humor can:

• Induce positive emotion
• Increase trust and social closeness
• Enhance team performance
• Boost creativity
• Improve perceived confidence and competence

In the workplace—where norms of professionalism are often ambiguous and consequential—the strategic use of humor requires judgment. But when deployed effectively, it can transform interactions.

The Research on Humor and Performance

Several studies illuminate the potential benefits of humor in negotiation and team settings.

Research led by Nale Lehmann-Willenbrock at the University of Amsterdam found that humor fosters positive emotion, which in turn promotes constructive communication and stronger team performance.

Li Huang of INSEAD found that when coworkers who trust one another use sarcasm—a form of saying the opposite of what one means—they perform better on tasks requiring creative insight.

In research conducted with Brad Bitterly and Maurice Schweitzer at Wharton, Alison Wood Brooks found that when a joke elicits genuine laughter and is perceived as appropriate, it signals:

• Social intelligence
• Confidence
• Competence
• Higher status

A successful joke demonstrates that you understand the room.

The Risks of Humor in Business Negotiation

For every successful joke, there is the possibility of failure.

Humor can go wrong in two major ways:

1. It may be perceived as unfunny.
2. It may be perceived as inappropriate.

An inappropriate joke can damage trust quickly and sometimes irreversibly. Lewd, derogatory, or demeaning humor carries high reputational risk and should be avoided.

In professional negotiations, the margin for error is often narrow.

Using Humor to Ease Tension

Negotiations frequently involve tension and negative emotion.

Professor Brooks notes that humor can function similarly to a strategy first proposed by the late Harvard professor Howard Raiffa: the post-settlement settlement—continuing to negotiate after reaching agreement because new value often emerges once tension subsides.

Humor operates in a comparable way. A well-timed, sincere joke can:

• Break psychological tension
• Increase social closeness
• Build rapport
• Shift the tone toward collaboration

When tension decreases, creativity and flexibility increase.

Using Humor to Navigate Difficult Questions

One of the hardest parts of negotiation is responding to questions you cannot—or should not—answer directly.

A counterpart may ask for:

• Your bottom line
• Your reservation price
• Sensitive internal information

In these moments, humor can serve as a temporary deflection tool. A light remark can:

• Buy time
• Diffuse pressure
• Redirect the conversation

Used sparingly and strategically, humor can help you maintain composure while protecting your bargaining position.

Humor and Subjective Satisfaction

Negotiation outcomes are not judged solely on economic terms. Satisfaction matters.

The most effective negotiators leave counterparts feeling positive about the interaction—even if the deal tilts in their favor.

Humor makes interactions more memorable. It increases subjective satisfaction and shapes how the experience is remembered.

A counterpart who laughs with you is more likely to recall the negotiation positively.

Know Thyself

Professor Brooks offers one essential caution: know yourself.

Humor comes naturally to some people. Others struggle to deliver jokes smoothly.

If you are not a natural humorist, you can still build warmth by:

• Laughing authentically at others’ humor
• Expressing lightness and openness
• Avoiding excessive seriousness

Few people enjoy negotiating with someone who never smiles.

You need not be a stand-up comedian. But signaling warmth and emotional flexibility can improve your negotiation outcomes.

When Is Humor Appropriate in Negotiation?

Consider using humor when:

• The room feels tense or stalled
• Trust has been established
• The stakes are high but the relationship matters
• You have a strong read on the social dynamics

Avoid humor when:

• Cultural norms discourage informality
• Trust has not yet been built
• The topic is highly sensitive
• You are unsure how your joke will be received

Like anchoring or framing, humor is a strategic tool. It requires preparation, awareness, and timing.

The Bottom Line

Humor in business negotiation is not a distraction—it is an emotional lever.

Used thoughtfully, it can:

• Increase trust
• Enhance creativity
• Build rapport
• Improve satisfaction
• Strengthen long-term relationships

Used carelessly, it can damage credibility.

The difference lies in emotional intelligence and social awareness.

Your Turn

What has been your experience using—or witnessing—humor in business negotiation?

When has it strengthened a deal? When has it backfired?

The fallout from unfair and ill-advised negotiated agreements can reverberate for years to come, as the City of Miami learned from its 2009 stadium deal with former Florida Marlins owner Jeffrey Loria. The story highlights aspects of dealing with difficult people, including their threats, questionable claims, and other potentially unethical negotiation tactics.

The Great Switcheroo

Back in 1999, Loria launched his career as a Major League Baseball (MLB) team owner when he bought a 24% stake in the Montreal Expos, a neglected team with a crumbling stadium, for just $12 million, writes Jonah Keri for CBS Sports. Within two years, Loria engineered the financing needed to secure a 94% stake in the franchise.

Then came “the Great Franchise Switcheroo of 2002,” as Keri calls it. With the Expos’ future in Montreal uncertain, Loria sold the team to the other 29 MLB owners for $120 million—10 times his initial investment—and bought the Marlins for $158.5 million from their owner, John Henry, who turned around and bought the Boston Red Sox. Loria paid nothing out of pocket for the ownership transfer, funding the difference in the Marlins purchase with a $38.5 million interest-free loan from the MLB.

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Carrots and Sticks

The Loria era started on a high note for the Marlins: In 2003, the team beat the New York Yankees in the World Series. Then Loria traded away stars and didn’t rebuild, saying he couldn’t afford to invest in payroll because ticket sales were low. Fans were staying away from the Marlins’ outdoor stadium during Miami’s hot and rainy summers.

To reverse the ballpark’s misfortunes and those of its Little Havana neighborhood, the team needed a retractable-roof stadium, Loria said. He then claimed he couldn’t afford to build one and threatened to relocate the team to another city.

City leaders fell in line behind a very generous public-financing deal in which Miami and Miami-Dade County taxpayers would pay about 75% of the $634 million construction costs for a new 37,000-seat stadium. The team itself would pay just $125 million and keep almost all the revenue generated.

Build It, but They Might Not Come

When it opened in 2012, the new Marlins Park enhanced the value of the team, but the economic benefits Loria had predicted didn’t materialize. Ticket sales remained stagnant, the Marlins’ losing streak continued, and the neighborhood did not revitalize.

Moreover, the burden on taxpayers was far worse than anticipated. Largely because Miami-Dade County used public bonds to secure high-interest loans to fund the deal, the stadium is expected to cost taxpayers a whopping $2.4 billion over 40 years, according to the South Florida Sun-Sentinel. The stadium itself is tax-exempt; Loria paid about $2.3 million annually in rent, which was used to pay back a $35 million loan from the county.

Meanwhile, contrary to Loria’s claims, a 2010 Deadspin exposé suggested that the team was turning a profit—and that Loria was pocketing millions of dollars each year in “management fees.” The Securities and Exchange Commission launched an investigation but eventually dropped it. Voters angered by the stadium deal recalled Miami-Dade mayor Carlos Alvarez in protest.

The Competition Heats Up

As the Marlins played another lackluster season, Loria began floating the idea of selling the team in late 2016 for $1.7 billion, according to Forbes.com.

Forbes estimated the team’s value at $675 million, second-lowest among MLB teams, but a highly lucrative TV deal awaited in 2020, plus possible naming rights to Marlins Park. Then there was the prospect of turning around a struggling MLB team with a brand-new, tax-free stadium.

An “unusually lengthy and public” bidding process unfolded, with the Marlins handling it themselves to avoid paying bank fees, according to the New York Times. Two main buyer groups emerged, one including former Yankees star Derek Jeter and basketball great Michael Jordan, to be largely financed by venture capitalist Bruce Sherman; and another that included Tagg Romney, son of former senator Mitt Romney, and former Florida governor Jeb Bush.

Winners and Losers

In August 2017, Loria agreed to sell the Marlins to the Sherman/Jeter group for $1.17 billion. When the question arose of how much local governments would get from the sale to help pay down the billions they invested in Marlins Park, Loria claimed he somehow was selling the team at a loss and thus couldn’t contribute a penny to paying down the debt. Disputing that improbable claim, the city and county sued. Loria settled in January 2021 for a mere $4.2 million. For him—and him alone—it was another great deal.

Dealing with Difficult People in Negotiation

When dealing with difficult people in negotiation, we are too often intimidated and insufficiently suspicious. Here’s advice on how to deal with difficult people:

• Don’t be intimidated by threats. Bullies frequently don’t intend to follow through on their threats and fully expect you to cave. Take a clear-eyed view of the situation, investigate how likely they are to follow through, and develop a strong backup plan. Then bargain for everything you’re worth.
• Take the long view. In the business world, one negotiation often leads to another. Think through the long-term implications of deal terms, analyzing possible scenarios, and then prepare for both the best and the worst of them.
• Choose your partners wisely. A businessperson’s past agreements can say a lot about them and their ethics in negotiation. When dealing with difficult people, research their reputations in their industry and remember that people who have made threats and engaged in unethical negotiation tactics in the past often do so again.

 What negotiation strategies do you deploy when dealing with difficult people?

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Q: Last week I sat in on a negotiation among some of our company’s partners. Just when it seemed that they had reached a stalemate, my boss cracked a joke that instantly lightened the mood. Almost magically, she was able to rejuvenate the conversation—and reemphasize her position—in a way that proved effective. But I can also recall times when jokes have flopped in meetings. This experience left me wondering: When and how should I use humor during negotiations (if at all)?

A: Humor may seem like a frivolous distraction, but few other conversational strategies have the ability to transform moods (in both positive and negative directions) as quickly and with such impact. Humor influences whom we are drawn to and whom we trust, can help us cope with negative circumstances, and can make work and life more enjoyable. However, in the workplace, where norms of appropriateness and professionalism are often stringent, ambiguous, and consequential, it can be tricky to figure out when humor can or should be used as a means of improving our social interactions.

Several benefits come with using humor successfully. For example, research led by Nale Lehmann-Willenbrock at Universiteit van Amsterdam shows that using humor induces positive emotion, which in turn triggers positive communication and better team performance. Furthermore, humor has been shown to boost creativity. When coworkers with high levels of trust among one another used sarcasm (a specific type of humor in which you say the opposite of what you mean) in their conversations, they performed better than others on tasks that required creative insight, Li Huang of INSEAD found in her research.

In research conducted with Brad Bitterly and Maurice Schweitzer of the University of Pennsylvania’s Wharton School, I found that telling a joke that elicits laughter and is viewed as funny and appropriate projects confidence and competence (by conveying an accurate read of social dynamics), and also increases our status.

Although the benefits of well-timed quips may sound appealing, a joke can fail in many ways. Jokes can be perceived as unfunny or inappropriate (or both). Because an inappropriate joke can be damaging, you should keep lewd, derogatory, or other deprecating jokes to yourself.

Negotiations are often fraught with tense moments and negative emotions. In fact, I recommend a strategy, first proposed by the late Harvard professor Howard Raiffa, called a post-settlement settlement—continuing to negotiate after a deal has been reached—because some of the best outcomes can be uncovered after the tension of the negotiation has been cut by reaching a deal. Using humor has the same effect: A welltimed, sincere, successful joke can help break the tension, increase social closeness, build rapport, and foster an enjoyable, positive tone during your negotiation.

You might also use humor as a way to answer difficult questions. One of the most challenging aspects of negotiating is being asked questions that you don’t want to or shouldn’t answer—because by answering directly or transparently, you would put yourself in a weak or compromised bargaining position. In those scenarios, you may be able to use humor to divert or distract—even for a moment—so you can think more carefully about what information you can and should disclose.

Finally, humor makes our interactions more memorable. The best negotiators make their counterpart feel great about the outcome, even if it isn’t in the counterpart’s favor. Finding the humor in your negotiation will increase your counterpart’s subjective sense of satisfaction and help you both remember the interaction in a favorable light.

I will end with one word of warning: Know thyself. Humor comes easily to some people. But if you are not a natural jokester or witty conversationalist, you can also score interpersonal-warmth points by laughing authentically at others’ jokes. Very few people enjoy interacting with someone who is overly serious or never laughs. Don’t be afraid to make your negotiation light and fun. When you do, you and your counterpart will enjoy it more, be more likely to uncover creative, cooperative deals, and remember the interaction more fondly.

Alison Wood Brooks
Assistant Professor of Business Administration
Harvard Business School

In negotiation, learning from past mistakes is a critical skill. In our July issue, we detailed errors that Republicans made in their initial attempt to repeal and replace the Affordable Care Act in the House of Representatives. Although the House narrowly passed its American Health Care Act (AHCA) in May, Senate Republicans repeated many of the House’s mistakes when they tried and failed to pass their own version of the bill in July:

• A one-sided approach. Republicans in both the House and the Senate ruled out the possibility of collaborating with Democrats on an Obamacare replacement. In the process, they limited themselves to a narrow path to victory that required winning over competing factions within their party. “We’re getting nothing done, my friends,” Republican John McCain chided from the Senate floor, criticizing both major parties for refusing to collaborate with each other on health care and other issues.
• A secretive process. House Speaker Paul Ryan and his staff drafted the AHCA in secret, then released it on March 6 as a fait accompli. Similarly, after the bill moved to the Senate, Majority Leader Mitch McConnell invited a small number of Republican senators—all of them white men—to work on the redrafting, which they did in utmost secrecy.
• Unintimidating threats. President Donald Trump reportedly threatened certain House members that he’d fight their reelection efforts if they didn’t vote for the AHCA. Most seemed unfazed by the threat. In a similar manner, Interior Secretary Ryan Zinke reportedly warned Alaska senator Lisa Murkowski that the Trump administration would not support key projects in her state if she voted against the bill. Murkowski, who oversees the Interior Department’s funding in the Senate, voted against it anyway.

In negotiation, learning from past mistakes is a critical skill. In our July issue, we detailed errors that Republicans made in their initial attempt to repeal and replace the Affordable Care Act in the House of Representatives. Although the House narrowly passed its American Health Care Act (AHCA) in May, Senate Republicans repeated many of the House’s mistakes when they tried and failed to pass their own version of the bill in July:

• A one-sided approach. Republicans in both the House and the Senate ruled out the possibility of collaborating with Democrats on an Obamacare replacement. In the process, they limited themselves to a narrow path to victory that required winning over competing factions within their party. “We’re getting nothing done, my friends,” Republican John McCain chided from the Senate floor, criticizing both major parties for refusing to collaborate with each other on health care and other issues.
• A secretive process. House Speaker Paul Ryan and his staff drafted the AHCA in secret, then released it on March 6 as a fait accompli. Similarly, after the bill moved to the Senate, Majority Leader Mitch McConnell invited a small number of Republican senators—all of them white men—to work on the redrafting, which they did in utmost secrecy.
• Unintimidating threats. President Donald Trump reportedly threatened certain House members that he’d fight their reelection efforts if they didn’t vote for the AHCA. Most seemed unfazed by the threat. In a similar manner, Interior Secretary Ryan Zinke reportedly warned Alaska senator Lisa Murkowski that the Trump administration would not support key projects in her state if she voted against the bill. Murkowski, who oversees the Interior Department’s funding in the Senate, voted against it anyway.

The fallout from a disadvantageous negotiation can reverberate for years to come. That’s what the City of Miami is learning from its 2009 stadium deal with Florida Marlins owner Jeffrey Loria as he reached an agreement to sell the team this past August.

Off to a winning start

Loria launched his career as a Major League Baseball (MLB) team owner back in 1999, when he bought a 24% stake in the Montreal Expos, a neglected team with a crumbling stadium, for just $12 million, writes Jonah Keri for CBS Sports. Within two years, as the team’s fortunes continued to suffer, Loria engineered the financing needed to secure a 94% stake in the franchise.

Then came “the Great Franchise Switcheroo of 2002,” as Keri calls it. With the Expos’ future in Montreal uncertain, Loria sold the team to the other 29 MLB owners for $120 million—10 times his initial investment—and bought the Marlins for $158.5 million from their owner, John Henry, who turned around and bought the Boston Red Sox. Loria funded the difference in the Marlins purchase with a $38.5 million interestfree loan from the MLB.

Carrots and sticks

The Loria era started on a high note for the Marlins: In 2003, the team beat the New York Yankees in the
World Series. But then Loria traded away some of the team’s stars and didn’t make a serious effort to rebuild. According to Loria, he couldn’t afford to invest in payroll because ticket sales were so low. Fans stayed away from the Marlins’ outdoor stadium during Miami’s many hot, humid, and rainy summer days.

What the team needed to reverse its fortunes was a retractableroof stadium, Loria said. He then claimed—while refusing to open the team’s books—that he couldn’t afford one himself. Saying taxpayer financing was needed, Loria began threatening to relocate the team to another city while also touting the economic development a new stadium would surely bring to the ballpark’s Little Havana neighborhood.

Whether swayed by these messages or by campaign contributions, city leaders fell in line behind a very generous deal: City of Miami and Miami-Dade County taxpayers would pay about 75% of the $634 million construction costs for the 37,000-seat stadium. The team itself would pay just $125 million and keep almost all the revenue generated from the building.

With some government officials reluctant to vote in favor of the ballpark, Loria made a concession on the percentage he would pay the city if he sold the team in the next 11 years. Profits would be shared on a sliding scale: 70% in year one, 60% in year two, 50% in year three, 5% in year five, and less in the years after that.

Build it, but they might not come

When it opened in 2012, the shiny, new Marlins Park substantially enhanced the value of the team, but the economic benefits Loria had predicted failed to materialize. Ticket sales remained stagnant, and with the stadium surrounded by parking garages, opportunities to revitalize the neighborhood were few. The team has not had a winning season in eight years.

Moreover, the burden the stadium placed on taxpayers turned out to be far worse than anticipated. Largely because Miami-Dade County used public bonds to secure high-interest loans to fund the deal, the stadium is expected to cost taxpayers a whopping $2.4 billion over 40 years, according to the Broward County Sun-Sentinel. The stadium itself is tax-exempt; Loria pays about $2.3 million annually in rent, which is used to pay back a $35 million loan from the county.

Meanwhile, contrary to claims that the team was operating in the red, a 2010 Deadspin exposé suggested that the team was turning a profit—and that Loria was funneling millions of dollars into his own pockets each year as “management fees.” The Securities and Exchange Commission launched an investigation but closed it without filing charges four years later. Voters angered by the deal recalled Miami-Dade mayor Carlos Alvarez in protest.

The competition heats up

As the Marlins played another lackluster season, Loria began floating the idea of selling the team in late 2016 at a price of $1.7 billion, according to the Miami Herald.

Forbes estimated the team’s value to be $675 million, second-lowest among MLB teams. But media revenues have been exploding league-wide, and a highly lucrative TV deal with Fox appeared to await the Marlins in 2020. New owners might also be able to sell naming rights to Marlins Park. And then there was the cachet of owning an MLB team with a brand-new, tax-free stadium: priceless, to some.

An “unusually lengthy and public” bidding process unfolded, with the Marlins handling it themselves to avoid paying bank fees. By May 2017, two main buyer groups had emerged as front-runners: a group of 16 partners that included former Yankees star Derek Jeter, former Florida governor Jeb Bush, and basketball great Michael Jordan, to be largely financed by venture capitalist Bruce Sherman; and a group led by Tagg Romney, the son of former presidential candidate Mitt Romney. Bush eventually switched over to Romney’s group after a falling out with Jeter, according to the New York Times.

Winners and losers

On August 11, 2017, the Herald broke the news that Loria had reached an agreement to sell the Marlins to the Sherman/Jeter group for $1.17 billion. Jeter would take over as head of baseball operations, realizing his longtime dream of running an MLB team. “The lure of Sherman’s money and Jeter’s prestige” won out, according to the Times. The league’s owners are expected to vote to approve the sale during their meetings in October.
How much of that $1.17 billion will local governments receive to help pay down the billions they invested in Marlins Park? Likely just a few million dollars.

How to keep from striking out:

• Don’t be intimidated by threats.. Bullies often have no intention of following through on their threats and are fully expecting you to cave. Take a clear-eyed view of the worstcase scenario, and work on developing a strong backup plan. Then bargain for everything you’re worth.
• Take the long view.. In the business world, one negotiation often leads to another. Think through the long-term implications of deal terms, analyzing the various scenarios that could play out, and then prepare for both the best- and the worst-case scenario.
• Choose your partners wisely.. A businessperson’s past negotiations can say a lot about him or her. Research potential negotiating counterparts’ reputations in their industry and keep in mind that past behavior is an excellent predictor of future behavior.

Women are underrepresented in leadership roles in the workplace, holding only about 16% of executive positions in Fortune 500 companies. Facebook COO Sheryl Sandberg and others have urged women to “lean in” by competing for high-level managerial jobs and negotiating for better pay and greater responsibility. Yet substantial evidence shows that many women who try to lean in face biased hiring and promotion processes that favor men. In new research, London Business School professors Raina A. Brands and Isabel Fernandez-Mateo show that women’s perceptions of being unfairly rejected create a vicious cycle that perpetuates their underrepresentation in top management.

Perceptions of unfair treatment

Brands and Fernandez-Mateo theorized that men and women may respond differently to being rejected for a leadership position with a firm. Women may be more likely than men to perceive that they were rejected unjustly due to a prevailing sense that they do not belong in the ranks of upper management. Consequently, women may be less likely than men to apply for other jobs with firms that reject them. This trend could perpetuate the underrepresentation of women in leadership roles.

The researchers confirmed their theory in three experiments. First, in a field study using hiring data from a U.K.-based executive search firm, they found evidence that women are less willing than men to consider a job opportunity with a firm that rejected them in the past.

In a second experiment, the researchers surveyed high-earning U.S. residents who had been rejected for a job in the past three years. The participants were asked to describe the rejection in detail and then to imagine that the same firm approached them about applying for another job appropriate for their career level. Women were more likely than men to report that the firm had treated them unfairly and were less willing than men to apply for a job with the same firm.

In a third experiment, the researchers asked executives to read a scenario describing someone of their gender being rejected for an executive position. Female participants were more likely to believe that the person they read about had been treated unfairly and would feel a lack of belonging in the executive community; women, relative to men, also said they’d be less likely to apply for a job with the same firm in the future.

If, at first, you don’t succeed…

For women, the findings can be taken as a challenge to “try, try again” with a firm after a rejection, as the firm’s decision making may be less biased than they perceive it to be.

At the same time, research shows that when job applicants receive feedback on their rejection, women are more likely than men to be critiqued based on their personality and style rather than their abilities and skills. Organizations may be able to attract more female candidates to leadership roles by providing all rejected applicants with more formalized, standardized feedback that focuses on qualities most pertinent to the job.

Source: “Leaning Out: How Negative Recruitment Experiences Shape Women’s Decisions to Compete for Executive Roles,” by Raina A. Brands and Isabel Fernandez-Mateo. Administrative Science Quarterly, 2017.

Women are underrepresented in leadership roles in the workplace, holding only about 16% of executive positions in Fortune 500 companies. Facebook COO Sheryl Sandberg and others have urged women to “lean in” by competing for high-level managerial jobs and negotiating for better pay and greater responsibility. Yet substantial evidence shows that many women who try to lean in face biased hiring and promotion processes that favor men. In new research, London Business School professors Raina A. Brands and Isabel Fernandez-Mateo show that women’s perceptions of being unfairly rejected create a vicious cycle that perpetuates their underrepresentation in top management.

Perceptions of unfair treatment

Brands and Fernandez-Mateo theorized that men and women may respond differently to being rejected for a leadership position with a firm. Women may be more likely than men to perceive that they were rejected unjustly due to a prevailing sense that they do not belong in the ranks of upper management. Consequently, women may be less likely than men to apply for other jobs with firms that reject them. This trend could perpetuate the underrepresentation of women in leadership roles.

The researchers confirmed their theory in three experiments. First, in a field study using hiring data from a U.K.-based executive search firm, they found evidence that women are less willing than men to consider a job opportunity with a firm that rejected them in the past.

In a second experiment, the researchers surveyed high-earning U.S. residents who had been rejected for a job in the past three years. The participants were asked to describe the rejection in detail and then to imagine that the same firm approached them about applying for another job appropriate for their career level. Women were more likely than men to report that the firm had treated them unfairly and were less willing than men to apply for a job with the same firm.

In a third experiment, the researchers asked executives to read a scenario describing someone of their gender being rejected for an executive position. Female participants were more likely to believe that the person they read about had been treated unfairly and would feel a lack of belonging in the executive community; women, relative to men, also said they’d be less likely to apply for a job with the same firm in the future.

If, at first, you don’t succeed…

For women, the findings can be taken as a challenge to “try, try again” with a firm after a rejection, as the firm’s decision making may be less biased than they perceive it to be.

At the same time, research shows that when job applicants receive feedback on their rejection, women are more likely than men to be critiqued based on their personality and style rather than their abilities and skills. Organizations may be able to attract more female candidates to leadership roles by providing all rejected applicants with more formalized, standardized feedback that focuses on qualities most pertinent to the job.

Source: “Leaning Out: How Negative Recruitment Experiences Shape Women’s Decisions to Compete for Executive Roles,” by Raina A. Brands and Isabel Fernandez-Mateo. Administrative Science Quarterly, 2017.

This past July, the News Media Alliance (NMA), a trade association of approximately 2,000 U.S. and Canadian news organizations, announced that it was planning to ask Congress for a limited antitrust exemption to allow its members to negotiate collectively with Google and Facebook regarding digital advertising. With consumers increasingly accessing their news through web platforms, print and online newspapers have seen their ad revenues plummet, while Google’s and Facebook’s have soared.

As more and more papers go out of business, publishers are desperate to stanch the bleeding. But the fact that the NMA felt the need to seek permission to negotiate collectively points to the legal hazards of doing so in the private sector.

Legal roadblocks to coalition building

In negotiation, there can be strength in numbers. Parties that might not even be able to get a meeting with a monolithic counterpart often can get its attention by joining forces with other weak parties and attempting to negotiate collectively. For example, individual employees join labor unions to gain leverage in contract talks with management, and community groups often band together to negotiate environmental and zoning issues with manufacturers building in their towns.

When for-profit businesses try to negotiate collectively with key partners, however, things get more complicated. In the United States, the Sherman Antitrust Act prohibits any contract that would constrain interstate or international trade or commerce. Price fixing among industry competitors, including colluding with competitors to drive down bidding in auctions, is against the law, for example.

Business people typically assume that means they are not allowed to even talk to their competitors when participating in an auction or negotiation-auction (“negotiauction”) hybrid, writes Harvard Law School and Harvard Business School professor Guhan Subramanian in his book Dealmaking: The New Strategy of Negotiauctions (Norton, 2011). But explicit agreements among bidders generally are not forbidden if they would promote competition or marketplace efficiency. For example, private-equity firms sometimes team up to make bids for public companies, a practice that is generally tolerated by the U.S. Department of Justice.

David versus Goliath?

Today, newspapers and other media outlets are portraying themselves as modern-day Davids facing off against the two-headed Goliath of Facebook and Google. As consumers increasingly turn to online platforms for their news, the platforms are attracting ad revenue that used to go to media companies.

Forced to negotiate one on one, newspapers have been unhappy with the returns they’ve received.

Increasingly, news outlets have had to rely on Google and Facebook to make their articles visible to consumers. Forced to negotiate one-on-one with the big online platforms, the papers have been unhappy with the returns they’ve received, reports Jim Rutenberg in the New York Times. For example, the Times, Forbes, and other outlets backed out of Facebook’s “Instant Articles” feature—which shows Facebook users fast-loading articles in an effort to keep users on the site longer—after revenues proved disappointing, reports Digiday.

In an editorial in the Wall Street Journal, David Chavern, president and CEO of the NMA, writes that the web platforms rely on high-quality news and analysis for ad revenue, but the quality of that news is threatened by the news industry’s financial woes. To rectify the situation, he argues, publishers need the ability to negotiate collectively for “stronger intellectual-property protections, better support for subscription models, and a fair share of revenue and data.”

Asking permission

The fact that the NMA decided to ask Congress to pass a law allowing publishers to negotiate collectively reflects the alliance’s keen awareness of the perils of running afoul of antitrust law.

Back in 2007, five major U.S. publishers banded together to negotiate a new business model for e-book pricing with Apple, which was preparing to launch the iPad at the time. Unhappy with the prevailing wholesale model, which allowed retailers such as Amazon to set whatever prices they liked for the e-books they bought from publishers, the publishers successfully lobbied Apple to switch to an “agency model” in which publishers set their own e-book prices and gave a 30% sales commission to Apple. Amazon reluctantly agreed to adhere to the new model as well.

But then the U.S. Department of Justice stepped in to accuse the parties of colluding to artificially raise e-book
prices. The five publishers reached a settlement with the government, while Apple went to court and was found guilty of price fixing and ordered to pay $450 million in damages.

Clearly, with its appeal to Congress, the NMA is eager to help its members skirt that kind of legal trouble. The NMA’s request is expected to be a long shot, given the current adversarial climate between the press and Washington politicians. However, lobbying from News Corporation founder and executive chairman Rupert Murdoch, who holds sway with Congressional Republicans and President Donald Trump, may help, according to the Times.

3 guidelines for coalition building

When you’re trying to get the attention of a powerful party, the following advice may be useful:

1. Look for potential partners.

Before negotiating from a position of weakness, look around to see whom you might be able to team up with to strengthen your hand. That doesn’t necessarily mean banding together with competitors, as you may be able to find partners outside your field whose offerings complement yours and allow you to make a stronger bid.

2. Take a broad view of the landscape.

When antitrust regulators object to agreements, typically it is because the deal leaves consumers worse off. So, when thinking about teaming up with others for a negotiation with a powerful counterpart, don’t forget to consider the potential impact of whatever deal you might reach on outsiders, including customers, clients, and society at large. In creating benefits for those at the table, might your deal impose hardship on other parties? If your agreement would harm outsiders, you could end up breaking your own ethical code and possibly the law.

3. Ask your lawyers.

When thinking about teaming up with one or more competitors in a negotiation, consult in advance with lawyers who are thoroughly versed in antitrust laws and regulations. If your plans would violate industry standards or the law, abandon them or seek permission through official channels, being up front about your intentions.