Negotiation as Poker Game

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bargaining chipspoker face bluffplay cards "close to

the vest”read cuestellsholding/raisingfoldingcards on the table

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Negotiation, like poker, involves tactical decision-making based on incomplete information, in the face of uncertainty.Prof Steven Lubet, Northwestern University Law School

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Men initiate negotiations 4x more than women.

Negotiation Metaphors ◦ Men: "winning

ballgame”; "wrestling match"

◦ Women: "going to the dentist.”

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Men negotiate first salary 4 times more than women

Negotiating MBA starting salary = 7.4 % increase

Women who negotiate salaries earn $1 million more than those who don’t

Women own 40 % US biz but receive 2.3% of available equity capital

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Rules

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Folkways

Cognitive Biases

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What You Need to Know

Influential parties outside the dispute/deal

External MarketForces

“Relevant” Facts

BusinessPlans for AllParties

Business Realities for All Parties

Story and Emotion

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“The Most Important Factor in Negotiating International Diplomatic Agreements is Being Inside the Other Guy’s Decision Cycle”

General Colin PowellFormer US Secretary of State

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•make high initial demands• maintain them• make few (and small) concessions•adhere to a high level of aspiration•obtain as much information as possible•Give away little information•bluff •Mislead•threaten retaliation to gain compliance

Reciprocation Commitment &

consistency Social proof Liking Authority Scarcity

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The Heart and Mind of the Negotiator, Professor Leigh Thompson at the Kellogg School of Management , Northwestern University

In controlled experiments, only seven percent of negotiators sought information from their bargaining partner that would have revealed his/her true goals when it would have been dramatically helpful to do so.

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Changing the Other Guy’s Mind

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ANCHORINGANCHORING

The party making the first The party making the first reasonable offer reasonable offer should prevail over his should prevail over his bargaining partner who bargaining partner who must respond in the range must respond in the range set by that party.set by that party.

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FramingFraming Present Losses as GainsStrong tendency to prefer avoiding losses over acquiring gains

Use language that emphasizes your position & frames information in your favor fewer rather than greater

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Women’s economic performance in negotiations hinges on their ability to harness gender stereotypes in a self-serving direction.

Professor Leigh Thompson, Kellogg School of Management Northwestern University

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Widen bargaining range by sowing doubt

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Step One

•Ascertain own interests and reservation point (bottom line)   •Ascertain identity of people necessary to obtain best overall deal

Step Two •Ascertain Other’s interests and reservation point• belief about the other side's bottom line powerful effect •Know BATNA•Anchor•Plan # of bargaining moves •BE ALERT TO NEW DATA DURING NEGOTIATION  

Step Three :  Manipulate Zone of Possible Agreement

•Set high aspirations•Make the first offer•Frame your GAIN and their LOSS•Widen bargaining range by "sowing doubt”   •Put more interests on the table

RECAP