324 ENTREPRENEURSHIP
Negotiator-Opponent Interactions. The area of negotiator-opponent interaction has
been more fruitful for researchers. Addressing the question “How should I bargain with
my opponent?” they have tested three models of negotiator behavior: exchange theory,
behavior modification, and game theory. Exchange theory predicts that norms of reci-
procity emerge over the course of a negotiation. In other words, the behavior of one
negotiator is reciprocated by similar behavior from the opponent. Behavior modification
theory predicts that behavior that is rewarded is repeated and behavior that is punished
becomes extinct. This model suggests that a negotiator can shape his opponent’s behav-
ior through rewards and punishments. According to game theory, negotiators attempt
to figure out the nature of the game—Is it fixed or variable sum?—and then determine
the payoffs for each behavior. Using this information, they can either cooperate to
achieve the highest joint payoff or defect and try to maximize their own outcome at the
opponent’s expense.
The evidence seems to indicate that reciprocity is important in negotiation.
Negotiators who make high demands and low concessions are most often met by oppo-
nents who do the same. Research shows that verbal threats are harmful unless they are
delivered subtly and are seen as legitimate. Verbal persuasion, however, is very useful and
is often reciprocated, especially when begun as a cooperative behavior,
The use of power is situational, but under the right circumstances it is useful if it is
noncoercive. The full use of power in negotiation is problematic. Because of bounded
rationality, the user seldom has full information, complete knowledge of cause and
effect, or perfect foresight. Therefore the unbridled use of power is likely to have seri-
ous negative and unintended consequences.^33
Last, the evidence shows that precedents are powerful molders of negotiation out-
comes, especially if the precedents are seen as fair and reasonable. Therefore, it is diffi-
cult to negotiate a unique and creative solution to a problem if there are already known
and accepted solutions to it.
Researchers at the Harvard Negotiation Project have made an important contribution
to studies of negotiations and have published normative guidelines for negotiating
agreements without giving in to the opponent. These guidelines are based on the con-
cept of the principled negotiationand the best alternative to a negotiated agreement
(BATNA).^34 A principled negotiation is neither hard-sell distributive and position-ori-
ented nor soft-sell compromise and concessionary.
Principled negotiations offer four elemental guidelines for negotiators. First, negotia-
tors must always separate the people from the problem. They need to find ways to pre-
vent a (perceived) negative personal style from interfering with the dialogue and commu-
nication process. Second, negotiators must focus on interests, not positions. In position
bargaining, each party stakes out claims for what it will or will not do. In interest-orient-
ed bargaining, negotiators communicate what is in their best interests and look for ways
to address those interests in a productive manner. Third, the parties should generate many
options for settlement, as many as possible directed at mutual gain. And fourth, the par-
ties should develop objective criteria and standards by which the result will be measured.
This last point is especially important because it avoids the problems caused by the
naked use of power and will. It is imperative that these standards be agreed upon to pre-
vent one side from demanding a concession for arbitrary and capricious reasons. Among
the many types of objective standards that can be employed, depending on the situation,