Negotiating Rationally

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On the basis of their studies of the negotiation behavior of more than 10,000 executives and students over the past five years, Bazerman and Neale conclude that most managers tend to behave irrationally in negotiations. In this book they explore many of the common mistakes that negotiators often make, explaining how such irrational errors can be avoided. The authors use simulations and exercises to demonstrate how to avoid these pitfalls, primarily by focusing the negotiator’s attention on his or her opponent’s behavior and stressing that negotiators develop the ability to recognize individual limitations and biases.

The book is structured around the premise that negotiating rationally means making the best decisions to maximize one’s own interests. This includes knowing when it’s smart to reach an agreement and when it’s not, as well as knowing how to reach the best agreement possible in a given situation. The authors provide analysis of many common mistakes found in negotiations including escalation of commitment, anchoring and adjustment effects, framing, the availability of information, and the effects of overconfidence and negotiator behavior. For each chapter, the authors offer a set of guiding principles to guard against one’s own irrationality and to detect it in other parties. Employing a multiple of scenarios as a backdrop, the authors endeavor to emphasize that negotiation is a rational process.

In the first chapter of this book, the authors describe their overall perspective. They specify what negotiating rationally is and why one needs this skill. The rest of the book is organized in three sections:

In the first section, they answer the question: if a negotiator and his opponent don’t negotiate rationally, what errors can be expected? What can one do to eliminate them? The authors provide examples that provide the opportunity to audit one’s own decision processes in two-party negotiation.

In the second section, they outline general frameworks for thinking more rationally about negotiation. They focus on a particular negotiation to guide one through the necessary steps to evaluate when and how to reach an agreement, and when to walk away—in both cases, producing outcomes that are in one’s own best interest.

In the third section, the authors go beyond the standard two-party negotiation and look at the variety of settings and contexts in which executives must rationally negotiate with multiple opponents, issues, and constraints. Some factors they consider are expertise, emotion and fairness, multiple parties, negotiating through third parties, competitive bidding, and negotiating through action.

Finally, they close with advice on how to negotiate with irrational opponents and how to make all that has been presented about rational negotiation an integral part of one’s behavior.

Negotiating Rationally Attributes

Author: Max H. Bazerman and Margaret A. Neale.
Publisher: New York, NY: Free Press, 1992