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The Simplest Way to Negotiate

by Phyllis Pollack
May 2015

PGP Mediation Blog by Phyllis G. Pollack

Phyllis  Pollack

I have mediated over 1,400 matters. Thus, I have seen parties approach negotiation in a myriad of ways; some appear to be “winging it” while others appear to have some sort of strategy in mind. The common thread appears to be “self-interest” or how can each party get the best deal possible. Yet, pursuing one’s own self-interest at the expense of the other party often leads to poor results for both parties. Very few of these negotiating parties realize that the simplest and best strategy of all is Tit for Tat. This theory of cooperation will actually get each side the best result possible. Robert Axelrod in his book, The Evolution of Cooperation (Basic Books, Inc., New York, 1984) (Axelrod(81)_the_evolution_of_cooperation ) explains this notion by using the famous example of the “Prisoner’s Dilemma”:

In the Prisoner’s Dilemma game, there are two players. Each has two choices, namely to cooperate or defect. Each must make the choice without knowing what the other will do. No matter what the other does, defection yields a higher payoff than cooperation. The dilemma is that if both defect, both do worse than if both had cooperated. (Id. at 8.)

As explained in Wikipedia, the factual scenario given to this example is typically:

Two members of a criminal gang are arrested and imprisoned. Each prisoner is in solitary confinement with no means of speaking to or exchanging messages with the other. The prosecutors do not have enough evidence to convict the pair on the principal charge. They hope to get both sentenced to a year in prison on a lesser charge. Simultaneously, the prosecutors offer each prisoner a bargain. Each prisoner is given the opportunity either to: betray the other by testifying that the other committed the crime, or to cooperate with the other by remaining silent. Here is the offer:

• If A and B each betray the other, each of them serves 2 years in prison • If A betrays B but B remains silent, A will be set free and B will serve 3 years in prison (and vice versa) • If A and B both remain silent, both of them will only serve 1 year in prison (on the lesser charge)

It is implied that the prisoners will have no opportunity to reward or punish their partner other than the prison sentences they get, and that their decision will not affect their reputation in the future. Because betraying a partner offers a greater reward than cooperating with him, all purely rational self-interested prisoners would betray the other, and so the only possible outcome for two purely rational prisoners is for them to betray each other. (http://en.wikipedia.org/wiki/Prisoner’s_dilemma)

Yet, if both pursue their own self-interest by betraying the other, they each will serve two years in prison. In contrast, if each cooperates by remaining silent, they each will serve only one year in prison on the lesser charge. And, if one betrays while the other remains silent, one goes free and the other serves 3 years in prison! This example shows that a party’s bias towards putting her own self-interest first will typically lead to a poor result. If the parties cooperate with each other, the best possible result for both will be obtained. As Axelrod explains:

In fact, in the Prisoner’s Dilemma, the strategy that works best depends directly on what strategy the other player is using and, in particular, on whether this strategy leaves room for the development of mutual cooperation.” (Axelrod, supra, at 15.)

In essence, Tit for Tat is a strategy in which the second player cooperates with the first player on the first move and then does whatever the first player does on the succeeding moves. For example, if during the second round, the first player “defects”, then so does the second player. And as long as the first player continues to “defect” with each successive move, so does the second player. It is only when the first player “cooperates” again, does the second player change her strategy, or responds with “forgiveness after responding to a provocation” by following suit and making a “cooperative” move. (Id. at 20.) Axelrod cautions that this game of Tit for Tat will typically be most effective where the players have a high probability of meeting again, that is, are repeat players. (Id.) Where chances are that the parties will never meet again or one or the other does not care about the future consequences, then Tit for Tat may not be the optimal strategy. (Id. at 15.)

In employing this strategy, Axelrod provides four rules:

(1) Do not be Envious. Do not strive to be more successful than the other party. Do not compare your success to that of the other party and then proceed to improve your position out of envy;

(2) Be Nice or Optimistic. That is, do not be the first to defect. Cooperate with the other player as long as she does.

(3) Reciprocate. If the other person defects, then retaliate and defect. Do not always cooperate as this will probably lead to your own exploitation by the other player.

(4) Be Forgiving. Once the other player stops playing “nice”, your instinct may be to continue to be “nasty” even after the other player returns to playing ”nice”. Don’t! Rather, be forgiving and return to playing “nice”, as well. (Axelrod, supra, at 110-114, 118-122 and http://en.wikipedia.org/wiki/Prisoner’s_dilemma)

Very succinctly, this strategy will be successful,

… due to being nice, provocable, forgiving, and clear. Its niceness means that it is never the first to defect, and this property prevents it from getting into unnecessary trouble. Its retaliation discourages the other side from persisting whenever defection is tried. Its forgiveness helps restore mutual cooperation. And its clarity makes it behavioral pattern easy to recognize; and once recognized, it is easy to perceive that the best way of dealing with TIT FOR TAT is to cooperate with it.” (Axelrod, supra, at 176.)

The next time you negotiate, try a game of Tit for Tat. Not only may you like it, it just may help you obtain the best result.

….Just something to think about.

Biography


Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as well as their own needs better than any mediator or arbitrator. She does not impose her views or make decisions for the parties. Rather, Phyllis assists the parties in creating options that meet the needs and desires of both sides.  When appropriate, visual aids are used in preparing discussions and illustrating possible solutions. On the other hand, she is not averse to being proactive and offering a generous dose of reality, particularly when the process may have stalled due to unrealistic expectations of attorney or client, a failure to focus on needs rather than demands, or when one or more parties need to be reminded of the potential consequences of their failure to reach an agreement.



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