WHAT WE KNOW

TIT for TAT

The most effective negotiation

strategy is very simple

“Dancing” is inevitable

Some rules of thumb

Who should blink first?

The anchoring effect

• Is the population of Iraq more or less than 5M?

• What is the population of Iraq?

Who should blink first?

The anchoring effect

• Is the population of Iraq more or less than 100M?

• What is the population of Iraq?

What level of offer to make?

ZOPA

INSULT

ZONE

CREDIBLE ZONE

ZOPA CREDIBLE ZONE

INSULT ZONE

0K

Party A

100K

Party B

What level of offer to make?

The Insult Zone First Offer

INSULT

ZONE

*5K

CREDIBLE ZONE

ZOPA CREDIBLE ZONE

INSULT ZONE

0K

Party A

100K

Party B

What level of offer to make?

Credible Zone First Offer

INSULT

ZONE

CREDIBLE ZONE

*15K

*25K

ZOPA

*32K

*32K

CREDIBLE ZONE

*59K

*41K

INSULT ZONE

0K

Party A

100K

Party B

Making more than 1 offer

Cons:

• Decision deferral

• Avoidance

• Option devaluation

• Non-compensatory decision making

• Dissatisfaction/regret

Making more than 1 offer

Pros:

• Contrasts – allows comparisons to be made

• Extreme aversion – people avoid the extremes

Aspiration level

• The higher the better

• Women do worse

Flexibility with numbers

• Global – specific

• %

• Ranges

• Beginning with a particular digit

• As a measure of progress

• Splitting the difference

Flexibility with numbers

Defendant Plaintiff

Court docs

Pre-conference

1st offer at conference

Deadlock

0

20K

30K

30K (says won’t bid against himself)

200K

175K

150K

150K (says won’t budge)

Creating vs Claiming Value

Creating value:

• Similarities and differences

• Co-operative/interest based approaches

• Power of empathy - demonstrating understanding without agreeing

Creating vs Claiming Value

Claiming value:

• Positional approaches

• Power of assertiveness - being robust when appropriate to challenge or encourage reflection

Loss Aversion

• Losses loom larger in people’s minds than do gains

• If a party considers that they are losing something, more is required to compensate them/persuade them

• Change a party’s reference point - demonstrate gains that will be made from the proposal

Loss Aversion

Which proposal do you prefer?

• Plan (1) will lead to a loss of 2 out of 3 jobs at the plant

• Plan (2) will have a 70% chance that 1 of the 3 jobs at the plant will be saved

Reasons for impasse

• Information

• Relationships

• Values

• Structural inequality

• Rights

Creating the right “emotional environment”

• Express appreciation

• Build affiliation

• Respect autonomy

• Acknowledge status

• Identify fulfilling roles

BATNA and WATNA

• Assess offers on the table

• Be open to reason – closed to pressure

Be creative!

• Analogy - concepts/ideas from other fields

• “Role reversal” (put yourself in their shoes)

• Challenging assumptions

• Brainstorming alternatives

• Reframing the problem

• Taking the perspective of the wholly unconstrained actor

• De Bono’s “six hats” technique

Beware of “Negotiation Bias”

• Over-confidence– test openness to disconfirming info

• Over-commitment– avoid extreme opening positions– ignore “sunk costs”

• Narrow/short-term focus– consider long-term implications

• Reactive devaluation– test reactions before offers are placed on table

Old DilemmaDealing with tactics

• Don't panic!• Recognise the tactic• Name the strategy being used• Pre-empt tactics e.g. check authority before

negotiation starts • Identifying common goals in an attempt to

engage in problem solving• Reality test to identify weaknesses• Ask for reasoning - “why..?”

How do QLD lawyers negotiate?

The Legal Negotiation Project:

• Launch February/March 2008

• Negotiation simulations late March-May 2008

• Invitations to all QLD solicitors and barristers

• Work in teams of 2 - against another pair

• Interaction with clients, teamwork and preparation

How do QLD barristers negotiate?

The Legal Negotiation Project:

• An interactive IT component – lawyers can seek instructions, provide client with legal advice and seek settlement instructions

• Case study will include an ethical issue – Ian Hanger QC will settle

• Compare with “documents only” arbitrated decision – Ian Callinan QC will give

How do QLD barristers negotiate?

The Legal Negotiation Project:

• Each simulated negotiation will be followed by a personal debrief - 3 hours

• Anonymised results will be published

• Awards will be given

• CLE points applied for!

WHAT WILL WE KNOW?