In her latest column on Negotiation Tips for the Los Angeles County Bar Association (Volume III, No. 9, June 2010), my colleague Linda Bulmash discusses the dangers of “Take it or Leave it Offers,” noting that more times than not, such offers backfire. Why? Because of “fairness” or at least how “fairness” is perceived by the opposing side. Research indicates that emotion rather than logic takes over; a party would rather say “no” to a deal that may offer some benefit to her if emotionally she believes the offer to be “unfair.”
This outcome has been confirmed several times over the years by social scientists researching this issue. Using the well known “Ultimatum Game”, social scientists studied how control groups would react in the following situation:
“…A has a sum of money ($10) and B has nothing. If A can convince B to accept a portion of that money of A’s choosing, both get their share. If A cannot, neither gets any money. For instance, if A offers B even $1, you would think B would accept it, because $1 is better than nothing. However, over 50% of people reject such an offer.”
“Why is that? While studying the brain activity of A and B as they play this game, neuroscientists made significant discoveries. A fair, mid-range offer triggered the logical parts of B’s brain and a very low offer lit up the emotional parts of B’s brain—the areas that handle conflict, disgust, and resentment.” (Id.)
As I have discussed in previous blogs, people act emotionally based on what they perceive to be fair. Their logic and rationality are heavily laden with emotion. Most people are unwilling to be “cornered” or to have a solution “shoved down their throats.” They would rather say “no” and leave with nothing but, at least, have their self-respect and dignity remain intact.
To insure that the other side both accepts your offer and leaves with her self-respect and dignity intact, Ms. Bulmash suggests two negotiation tools. First, probe the other side’s interests and needs. Try to determine what is really going on, or what is “beneath the line” as we mediators often say. Second, frame your offer so that it meets the other side’s underlying needs and interests. Alternatively, attach more “carrots” to the offer, such as creating a longer-term contract or offering other “soft money” benefits. You can guarantee certain benefits that cost you little but are highly valued by the other side. Or, you can simply offer more money, yet, still get a very good deal for yourself.
Many times, a successful negotiation comes down to simply doing what is “fair”, while allowing the other side to maintain her self-respect and dignity. It is as simple as that!
….. Just something to think about!