The Psychology of Negotiating

How to avoid psyching yourself out in negotiation

Many people lose the negotiation before even starting to prepare for it:
“What if I ask for more and they withdraw their offer? They wouldn’t do that--I don’t think. Am I really worth
more? Sure I am. Am I really? What if there’s another candidate? Even if there isn’t, they could think, “He’s
only doing it for the money, Let’s find someone who’d be grateful for our offer. Damn!”
Many of us are up against more experienced negotiators and the cards are stacked against us both in savvy and
in our psychology. How can we give ourselves a better chance?

Other options. The most potent way to boost your confidence is to have at least one other option. Let’s say
you’re a job seeker and, at long last, received a job offer. You’re at risk of accepting a lowball deal.
As soon as you know an offer is coming, instead of the usual tendency to stop looking for another, look twice as
hard. With an offer in the offing, you’ll appeal more to other employers. Imagine you were an employer
considering two candidates: one unemployed and one with an offer but before accepting it, wanted to know if
you were interested. Wouldn’t the latter intrigue you more? Your redoubled last-minute efforts could yield a
better offer or at least more confidence in negotiating the first one.

Face the worst. Worst case, they withdraw the offer. If they did that in response to your fair-minded
negotiation, chances are they’d treat you even worse once they’ve got you. You'll probably find a better
prospect elsewhere.

Negotiate gently, even with a shark. Gentle people are intimidated in negotiation because they fear they’re
unalterably less shark like than their opponent. That could well be true. An antidote: negotiate gently. Even
sharks get calmer amid calm.

Think of the person as your negotiating partner rather than opponent—You’re a statesperson trying to come to
a solution that both parties feel good about. Yes, some sharks take advantage of that but if they do, perhaps
you can muster the courage to realize, as I just mentioned, that’s not who you want to work for and that you
should walk away. Usually, there are better opportunities than one from someone who’s already treating you
unfairly.

Think cosmically. Especially if you're feeling oppositional to your negotiating partner, it may help to put
yourself in his or her shoes: Might s/he lack the power to offer you more or be under real pressure to control
costs? Of course, you'd prefer s/he control costs other than by minimizing your pay but it may at least be worth
considering that.  

It may also help to think of what's cosmically fair: What would a judge deem fair to both sides? The goal is not
to get the best deal you can. It's to get a deal both parties can feel okay about and which seems just.

Be soft on the people, hard on the numbers.  If you attack your negotiating partner’s motives or behavior,
you risk their withdrawing the offer. Keep focus on the offer and on what’s fair. The magic word in negotiation
is fairness: Using it throughout the negotiation may well yield a better offer even from a more powerful
negotiating partner.

Negotiate for what’s easy to get. Sometimes, your negotiation partner has more flexibility on the negotiation's
non-cash items. For example, if you’re negotiating employment terms, the employer may more easily be able
to grant your request on job description, job title, whom to report to, date of salary review, flex-time,
telecommute, training budget, administrative support, car allowance, etc. Don't assume the employer is simply
trying to say no to everything. See if you can find things s/he can easily agree to.
 Ask for their offer. If they insist you make the offer, give a range. Try to preempt their asking you how much
you want. If you ask too little, you’ve given away money. If you ask too much, you may scare them away.
Instead, at the first point in the conversation when the vibes are good, ask something like, “What’s the most
the organization (not ‘you’) feels comfortable paying? If they insist on your making the offer, provide a range.
In advance, do your homework and then offer a fairly wide range that’s on the high side of fair, explaining how
you arrived at that range. For example, “Depending on the nature of the position, having reviewed comparable
salaries, $95,000 to $115,000 is fair. Does that seem reasonable to you?”

The pained pause.  This technique could earn you the highest hourly rate you’ll ever earn. When your
negotiating partner makes a too-low offer, look him or her in the eye without emotion and say nothing. That
can make the person feel guilty and perhaps increase the offer. I’ve had a number of clients make thousands of
dollars with just that few seconds of silence.

Get ready for ploys. Negotiation training usually teaches ploys. A common one is to feign indifference: The
negotiator pretends s/he has all the time in the world and doesn’t really care whether the deal is made.
Remember, that’s usually a game. Be equally relaxed. You might even play their game—ask for a bit of delay.
Another common tactic is the higher-authority ploy. After your negotiation partner has extracted the best deal
s/he can from you, s/he says, “Sounds great, I just have to get it approved by the boss.” S/he then comes back
and says, “I’m shocked but my boss said it has to be 20 percent less. Non-negotiable.” A possible preemption
is, before negotiating, to ask, “Do you have full authority to negotiate this?” If not, say, “To avoid unnecessary
back and forth, may I negotiate with that person?” That won’t always work but few things are musts—Do the
best you can and then, when it’s immutable, let it go.

Be amused rather than angered by the ploys. They’re all part of the game. If you take offense, you’ll likely
pay too big a price.
Reject the first offer; accept the second.  If their second offer seems even borderline fair, it's typically wise to
take it. Usually, any more you get after that isn't, after taxes, worth it. Why? Because it's unlikely to change
your lifestyle yet your negotiating partner may then expect too much of you, deem you expensive and thus look
to terminate the relationship at the earliest opportunity, or even retract the offer. But don't jump at an offer
lest your negotiation partner feel s/he could have gotten you for less. Just calmly say something like, 'Well, I
guess I can accept that." 

Feeling good about losing.  Let's say the best deal you can get is a lousy one. Yes, sometimes, it's wise to walk
away but other times, even a lousy deal may be worth taking. For example, if you really want to do that work
or feel you’re unlikely to find a better offer soon enough, it may be worth swallowing your pride. Again, think
cosmically, in terms of the largest scheme of things. That may seem a strange way to make decisions but after
you start thinking that way, you may always want to think that way.

Dr. Nemko coaches people on their high-stakes negotiation. You can reach him at [email protected].

The Personality Traits of Good Negotiators

 Tomas Chamorro-Premuzic
AUGUST 07, 2017
Although there are hundreds of books about how to negotiate more effectively, the advice they offer is often
difficult to apply, for three reasons. First, there are just too many contextual specificities underpinning each
negotiation, such that one size does not fit all. Second, the effectiveness of each strategy is partly dependent
on the personal background of the negotiators — who they are, what they want, and how they connect. Third,
many of the factors determining the outcome of negotiations are more emotional than rational, which requires
a deep psychological understanding of the people involved.

Luckily, personality research provides valuable lessons in predicting an individual’s ability to negotiate
effectively. Some traits are clearly indicative of good negotiation potential, while others are more of a
handicap. That isn’t to say people can’t get better at it, but their success will depend on their ability to
understand their own and the other party’s personality.

Among the traits that improve individuals’ negotiation abilities, emotional intelligence (EQ) is in a league of its
own. Despite EQ’s relatively recent appearance in the realm of personality traits, a Google Scholar search
produces an astonishing 131,000 hits on EQ and negotiation. Most of these articles highlight the beneficial
aspects of EQ vis-à-vis negotiation. For instance, a study by Wharton and MIT professors shows that people with
higher EQ are more likely to induce positive mood states in their negotiation counterparts and leave them more
satisfied with the outcome of the negotiation. EQ also translates into higher levels of satisfaction with one’s
own negotiation outcome, regardless of the objective result. Even more important, EQ is linked to higher levels
of self-control and likability, no doubt a powerful combination when it comes to engaging with others in
emotionally taxing situations. As if all of this weren’t enough, people with higher EQ also tend to be more self-
aware, so they are better able to understand how other people see them, a critical advantage not just during
negotiations.

YOU AND YOUR TEAM SERIES

Negotiating

Another trait that has shown a strong association with negotiation potential is cognitive ability (IQ). In a
comprehensive meta-analytic review examining almost 5,000 studies, higher IQ and the related construct of
cognitive complexity were found to predict better performance during lab experiments on negotiation, such as
the prisoner’s dilemma. While one would obviously expect IQ to boost negotiation performance, the research
also revealed a more surprising finding: People with higher IQs tend to approach negotiations in a more
cooperative or collaborative way, treating their negotiation counterpart as a partner and embracing win-win
strategies that tend to leave both sides satisfied.

The same meta-analysis revealed that one of the strongest personality drivers of negotiation potential is self-
monitoring, defined as the tendency to examine one’s behaviors and the impressions we make on others. This
makes sense: We all have mental models to interpret other people’s behaviors, and awareness of these models
is key to influencing how people think of us. Self-centered, narcissistic individuals who believe they can “just
be themselves” and disregard other people’s views of them are often celebrated in the Western world for their
confidence and self-belief. However, the reality is that those individuals will miss out on important social
clues, negative feedback, and the ability to connect with others. All of this will handicap them during
negotiations.
What traits are especially problematic when it comes to negotiating? Neuroticism, which concerns lower
emotional stability and a propensity to experience negative affect, is linked to several ineffective negotiation
strategies, such as an excessive tendency to bargain, complain, and antagonize counterparts. In addition,
neuroticism decreases one’s own satisfaction with the outcome of negotiations, even when such outcomes are
actually positive. On the other hand, Machiavellianism, a dark-side personality trait associated with a tendency
to manipulate and exploit others and behave in risky and antisocial ways, motivates individuals to initiate
negotiations and predicts assertive negotiation tactics. However, some evidence suggests that Machiavellians
actually do worse in negotiations, perhaps for being overly competitive and aggressive or pushing things too
far. It should also be noted that not all Machiavellians have sophisticated social skills, and many are overly
impulsive.

Importantly, although our personalities certainly affect how we typically behave during negotiations, we are
still free to choose how we act, so this is not a deterministic model. That said, in order to control our
personality, we need to be aware of it, so it is pivotal to understand what our default tendencies and
predispositions are if we are interested in changing them, or at least inhibiting them during negotiations. As
the great Jean-Jacques Rousseau said: “There are times when I am so unlike myself that I might be taken for
someone else of an entirely opposite character.” By the same token, being aware of your personality will
enable you to leverage your natural style in situations that are a good fit for it, for talent is largely personality
in the right place.

Tomas Chamorro-Premuzic is the Chief Talent Scientist at ManpowerGroup, a professor of business psychology
at University College London and at Columbia University, and an associate at Harvard’s Entrepreneurial Finance
Lab. He’s the author of Why Do So Many Incompetent Men Become Leaders? (And How to Fix It). Find him on
Twitter: @drtcp or at www.drtomas.com. 

Psychological Tools for Negotiation Success

This checklist of psychological tools you can use during future negotiations is explained (with many examples)
in Chapter 7, “Use Psychological Tools—and Avoid Psychological Traps,” in Negotiating for Success:

Remember that these tools can become traps when the other side uses them.

1. Don’t assume that you are negotiating over a fixed pie (and avoid reactive devaluation).
2. Use anchoring in developing a first offer strategy.
3. Avoid overconfidence when making negotiation decisions.
4. Frame the other side’s choices to your advantage.
5. Look beyond easily available information.
6. Look at negotiations from the other side’s perspective.
7. Encourage reciprocity from the other side.
8. Use the contrast principle.
9. Don’t lose sight of the big picture—the gorilla in the room.

Developing Your Negotiating Power

Your Best Alternative to a Negotiated Agreement (BATNA) is your source of power during a negotiation. Your
BATNA gives you leverage to walk away if the other side doesn’t give you a better deal than your best
alternative. For additional information see Chapter 5, “Develop Your Relationships and Your Power,” in
Negotiating for Success:
To develop your power, answer the following questions:

1. What is my BATNA? (This should be the first question you ask yourself when preparing for negotiations.
If your BATNA is better than what the other side can offer, walk away from the negotiation.)
2. Should I disclose my BATNA to the other side during negotiations? (As a general rule, you will want to
disclose a strong BATNA because that signals your strength and you will want to hide a weak BATNA.)
3. If I have a weak BATNA, should I lie about my alternatives? (Lying is never recommended, and in this
situation it is especially dangerous because courts have held that lying about BATNAs can be considered
fraud. See Chapter 4, “Decide How to Answer Ethical Questions,” in Negotiating for Success.)
4. Do I know what the other side’s BATNA is? How can I find the other side’s BATNA? (This is the way that
you will determine the other side’s strength. Decide what questions to ask during the negotiation to
find the other side’s BATNA.)
5. How can I weaken the other side’s BATNA? (In other words, how can you weaken the other side’s
power? Before the negotiation, try to predict the other side’s BATNA and think about how you can
weaken it.)
6. How can I strengthen my BATNA? (In other words, how can you strengthen your power during the
negotiation?)

Life Goals Analysis

When you are preparing for a negotiation, try to take a big-picture perspective by using a life goals analysis. A
life goals analysis is especially recommended for dispute-resolution negotiations, but is also useful when
preparing for deal-making negotiations. For example, someone used the life goals analysis when successfully
negotiating for a lead role in his company--a negotiation over salary and title that took many rounds.
To complete this analysis, ask yourself: How does this dispute (or deal) relate to my goals in life? When
preparing your list of life goals, consider the following possibilities:

1. Family goals. Do you want to spend more time with your family? How will you spend that time?
2. Leisure goals. What do you enjoy doing when you aren’t at work?
3. Retirement goals. When do you plan to retire and what will you do during retirement?
4. Financial goals. What are your financial plans and how will you achieve them?
5. Business and career goals. Do you have any plans to start a business or move to a new job?
6. Relationship goals. Do you anticipate any changes in your personal relationships?
7. Service goals. Do you want to increase your community service?
8. Lifestyle goals. Do you have any health concerns? Do you want to change your lifestyle?

Contract Law Checklist

Negotiations take place within the “shadow of the law.” Even when you plan to hire an attorney to review your
final contract, you should use the following checklist during negotiations to ensure that your agreement will be
enforceable. For further information and examples, see Chapter 8, “Use Contract Law to Complete Your
Negotiation,” in Negotiating for Success:
 1. Are you using a preliminary document? (If you are using a preliminary document—often called a Letter
of Intent, Memorandum of Understanding or Agreement in Principle—state in the document that it is for
negotiating purposes only and not a final contract.)
2. Have you reached a final agreement? (After the other side makes an offer, be careful when adding
terms to your “acceptance.” A counteroffer can terminate an offer.)
3. Have both sides given up something? (This is the “consideration” requirement. Be especially careful to
meet this requirement when you are amending a contract.)
4. Is the agreement legal? (Remember that legality requirements extend beyond violation of criminal law
and can include violations of public policy.)
5. Is the agreement in writing? (Even when not required by law, it is sound practice to put all your
agreements—including contract modifications—in writing.)
6. Does your written contract include all the terms that you negotiated? (Although the law varies from
country to country, there is a risk that courts will not enforce agreements that are not part of the
written contract.)
7. Are there any implied terms that are not part of the written contract? (In addition to implied terms,
courts might also review your past dealings with the other side when interpreting the contract.)

Five-Factor Test to Decide Whether You Should Negotiate Through an Agent

Answer the following five questions in deciding whether to negotiate through an agent. For further
information, see Chapter 6, “Understand the Role of Agents in Negotiation,” in Negotiating for Success:
Questions to Ask:

1. Who is the better negotiator—you or the agent? (If the agent has better negotiating skills than you,
decide whether the benefits of using the agent exceed the agent’s compensation.)
2. Does the agent have experience with the issues that will arise in your negotiation? (If you are
negotiating a professional sports contract, you probably don’t want a real estate agent to represent
you.)
3. Does the negotiation involve a technical matter that requires special expertise? (For example, if the
negotiation involves complex legal issues, you should probably negotiate through an attorney.)
4. How much time do you have for the negotiation and what are the opportunity costs if you handle it? (If
you own or manage a business, your time might be better spent developing products and services for
your customers.)
5. What is your relationship with the other side? (If you are negotiating the resolution of a dispute and the
relationship is hostile, it often makes sense to bring in agents who have no personal involvement and
can distance themselves from the dispute.)
Assess Your Negotiating Style*
To assess your negotiation style while preparing for negotiations, complete the following three steps

1. Complete the assessment to understand your negotiating style.

2. Use the assessment to analyze the style of the other side. This is especially important in cross-cultural
negotiations.
3. Do a gap analysis. Locate the major gaps between your style and the other side’s style. Focus on these
gaps when preparing for the negotiation.

Additional tip: After completing the gap analysis, try a role reversal exercise. Use the other side’s style as you
practice the negotiation with a friend who will use your style. This will enable you to better understand the
other side’s style.

Negotiating Style Assessment

Listed below are ten important traits of a person’s negotiating style and approach. Each trait demonstrates a
wide range of variations, which can be organized along a continuum, as has been done below. With respect to
each trait, indicate with an X where your own negotiating style and approach in business negotiation falls along
each continuum.

Goal: What is your goal in business negotiations: a

Contract |___|___|___|___|___| Relationship
binding contract or the creation of a relationship?

Attitudes: What is your attitude toward negotiation:

Win/Lose |___|___|___|___|___| Win/Win
win/lose or win/win?

Personal Styles: During negotiations, is your personal

Informal |___|___|___|___|___| Formal
style informal or formal?

Communications: Is your communication style in

negotiation direct (for instance, clear and definite
Direct |___|___|___|___|___| Indirect
proposals and answers) or indirect (for instance,
vague, evasive answers)?

Time Sensitivity: In the negotiation process, is your

sensitivity to time high (for instance, you want to High |___|___|___|___|___| Low
make a deal quickly) or low (you negotiate slowly)?

Emotionalism: During negotiations, is your

emotionalism high (that is, you have a tendency to High |___|___|___|___|___| Low
display your emotions) or low (you hide your feelings)?

Agreement Form: Do you prefer agreements that are Specific |___|___|___|___|___| General
specific (that is, detailed) or general?

Agreement Building: Do you view negotiation as

bottom up (reach agreement on details first) or top Bottom Up |___|___|___|___|___| Top Down
down (begin with agreement on general principle)?

Team Organization: As a member of a negotiating

team, do you prefer having one leader who has
One Leader |___|___|___|___|___| Consensus
authority to make a decision or decision making by
consensus?

Risk Taking: Is your tendency to take risks during

negotiations high (for instance, your opening offer to High |___|___|___|___|___| Low
sell is extremely high) or low?
 Two Kinds of People that you should never Negotiate with

The first thing negotiation experts teach is to “separate the people from the problem.” The vast majority of
the time, this is sound advice. But as a psychologist, I know that approximately 1% of the time, people are the
problem.  And in such cases, normal negotiation strategies just don’t work. Here’s how to recognize that rare
situation and what to do about it.

First, determine what sort of person or people you’re trying to negotiate with (i.e. your counterparty).
Here are two types of counterparties you should negotiate with, even when it seems difficult.

1. Emotional counterparties. Emotion in and of itself shouldn’t preclude you from reaching a successful
agreement – it’s natural for people to feel strong emotion in a conflict situation. Once the conflict is identified
and addressed, and parties are allowed to vent, emotion usually dissipates. Keep in mind that some people
(and cultures) simply express more feelings than others. Also, some negotiators use emotion strategically to
influence the other party. Recognize the emotion, but don’t let it stop you from negotiating.

2. Unreasonable counterparties. We often think people are being unreasonable when they don’t agree with
our logic and evidence. But more often, people who disagree with us are simply seeing different problems, and
even different sets of facts, than we are. Even if you think the other party is being unreasonable, it’s still
possible to bridge the gap and close a deal.

But here are two types of counterparties you should never negotiate with:

1. A counterparty who alternates between conciliation and provocation. People are usually more
provocative, or difficult to deal with, at the outset of a negotiation. Then they become more conciliatory as
the outlines of a settlement develop. Beware the person who is conciliatory at first, then becomes provocative
— and then when you’re about to walk away becomes conciliatory again, and then provocative again. This
behavior suggests that he will never be satisfied, nor finished, with the negotiation. What he wants is not a
negotiated settlement, but control — over the process and over you. The time and energy it will take to
continue will eventually outweigh any potential gains you could achieve through negotiation.

2. A counterparty who persists in seeing people in terms of absolute good and evil. Negotiation is a method
for resolving conflicts of interest, not for adjudicating who is at fault. Most people, once they understand this,
are willing to exchange concessions in order to satisfy their underlying interests. Watch out for someone who
describes people as absolutely good and blameless, or as absolutely evil and responsible. This behavior suggests
that he or she lacks the mindset necessary for negotiation. What this person wants is for evil people to be held
accountable and punished, and because you are in a conflict with her, you may fall into that category. Walking
away would deprive her of the opportunity to punish you. Therefore, if you negotiate, you can expect the
process to be painful. You can also expect not to receive meaningful concessions, because this type of person
does not believe you deserve them.

Even the best negotiators cannot reach a win-win outcome with people like this, as their underlying interests
can’t be addressed with a settlement. The best negotiation advice and practice will not help you in these rare
situations. Instead, here are four steps you should take:

Be realistic. This person is not going to change. There is no negotiation strategy you can use to make him or
her change. Your goal should be to extricate yourself with the most gains (or least losses) possible. Let’s say
you have a tenant behind on the rent. It’s worth negotiating with an emotional, even unreasonable tenant.
Deep down, her primary interest is to keep the apartment. She can ultimately be trusted to act in her own
interest. On the other hand, it’s not worth negotiating with an alternatively conciliatory, then provocative
tenant who blames his neighbors and the property manager for his situation. Deep down, his primary interest is
not the apartment; it’s his need to control the people around him.

Stop making concessions. The purpose of concessions is to reach an agreement, but since you’ll never do that
(no matter how much you’re willing to give up!), don’t waste your time. That doesn’t mean you won’t incur
significant losses. Your goal should be to minimize those losses. For example, if someone on your team fits the
description of a no-win negotiator, you may already have made many concessions and picked up her share of
the work, while she has yet to follow through on her promises to you. Enough! Do whatever is necessary to get
the project finished, but stop making offers to her.
Reduce your interdependence. Take whatever steps you can to reduce your interdependence with this
person. You don’t want to depend on him for anything, or owe him anything, going forward. This means, for
example, that a lump sum payment for services is better than a payment plan. Working independently on
separate pieces of a project is better than working together on the whole thing. If you must continue to work
with this person, remember that even very immature children can still play nicely side-by-side if each is given
his or her own set of toys.

Make it public, hold them accountable, and use a third party if you can. Avoid private discussions, if
possible. Get everything out in the open and put everything in writing. Try to bump accountability to the next
level, so someone higher up has to take action if the other party does not follow through on his or her
obligations. If you can utilize a third party, like a mediator, arbitrator, or judge, then do so.
Remember, 99 times out of 100, your counterpart has rational underlying interests that you will eventually
discover with patience and the right strategies. The secret to negotiating, after all, is to find out what the
other party wants and how much it’s worth to him. In those rare cases when your counterparty wants to use
the negotiation to control or punish you, however, it doesn’t matter how much it’s worth to him. It’s worth
more to you to be free of him and able to get on with your business. Isn’t it?

Judith White is Visiting Associate Professor of Management at the Tuck School of Business at Dartmouth.