Two of the negotiators stuck to their commitments, reducing their fishing by 50 percent. The third
operated like a giver: she reduced her fishing by 65 percent. The group was all set to keep the
resource intact, but Derek chose not to reduce his fishing at all. He took as much as he could, actually
increasing his fishing total and decimating the other three entrepreneurs. Before the group met, Derek
had the lowest profits of the four. After he took far more than his share of the harvest, his profits were
70 percent higher than the giver’s and 31 percent higher than those of the other two. When confronted
by his colleagues, Derek responded, “I wanted to win the negotiations and destroy my competitors.”
Just a few months later, Derek began a meteoric rise in his career. He was hired by a professional
sports team and established a reputation as a dominant negotiator, playing a key role in assembling a
team that went on to win a world championship. Derek was promoted in an unusually short period of
time and recognized as one of the one hundred most powerful people in his sport—while still in his
thirties.
When Derek first started working for his team as a professional negotiator, his job was to manage
the budget, identify top prospects, and negotiate contracts with agents to sign new players and keep
existing players. Since resources were tight, bargaining like a taker would work to his advantage.
Derek began to search for underrated talent, and stumbled upon a gem of a player in the minor
leagues. He sat down with the player’s agent to negotiate a contract. True to form, Derek made a
lowball offer. The agent was frustrated: several comparable players were earning higher salaries.
The agent accused Derek of pushing him around and demanded more money, but Derek ignored the
demands and didn’t budge. Eventually, the agent gave in and agreed to Derek’s terms. It was a win for
Derek, saving his team thousands of dollars.
But when Derek went home that night, he had an uneasy feeling. “I could just feel through the
conversation that he was pretty upset. He brought up a couple points on comparable players, and in
the heat of things, I probably wasn’t listening too much. He was going away with a bad taste in his
mouth.” Derek decided he didn’t want to end the exchange with the agent on a sour note. So he tore up
the contract and met the agent’s original request, giving him thousands of extra dollars for the player.
Was this a wise decision? Derek was costing his team money, and potentially creating a precedent
for doing so in other negotiations. Besides, the deal was settled. The agent had agreed to the lowball
offer and Derek had achieved his goal. Going back on it hardly seemed like a smart move.
Actually, it was much smarter than it first appeared. When Vanderbilt researchers Bruce Barry
and Ray Friedman studied negotiations, they had a hunch that sharper negotiators would get better
results, as they could gather and analyze more information, keep track of multiple issues, and generate
hidden solutions. In one study, Barry and Friedman obtained data on the intelligence of nearly a
hundred MBA students. They measured intelligence using each student’s score on the GMAT, a
rigorous test that is widely used in business school admissions to measure quantitative, verbal, and
analytical abilities. The participants negotiated in pairs, playing either the developer of a new mall or
the representative of a potential store to anchor the mall. After they finished negotiating, they
submitted their final agreements, and two experts assessed the value of the deal to each party.
As expected, the joint gains were highest when both parties were very intelligent. Barry and
Friedman broke down each party’s gains, expecting to find that the smarter negotiators got better
deals for themselves. But they didn’t. The brightest negotiators got better deals for their
counterparts.
“The smarter negotiator appears to be able to understand his or her opponents’ true interests and
michael s
(Michael S)
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