Friend Diane Levin of the Online Guide to Mediation writes:
I think the question you raise here, requires a cognitive psychologist to answer. Having said that, I've seen this phenomenon [of the negotiation ending half way between the first two offers] myself. I suspect it's because the notion of "splitting the difference" or "meet me halfway" is so deeply ingrained in us.
Perhaps on some level this result "feels fair" to parties -- not surprising when even envious monkeys can spot a bum deal.
When the "Fair" Result Doesn't Result
However, I don't think it's fair to assume that this applies in all cases. I don't believe it holds true in mediations between an attorney and his/her client on one side and an unrepresented party on the other, when you're more likely to get out-of-the-ballpark initial demands from the unrepresented party (the "it's what my third cousin who's going to law school said I could get" phenomenon), or when either or both parties are unprepared to negotiate and have no objective criteria on which to base their dollar demands. Then the end result is wildly different from what you've described. And those are the cases that can break your heart.
For example, consider a not-so-untypical employment discrimination case between an unrepresented complainant and an employer with their lawyers. The complainant's first demand is $900,000 -- about $896,000 shy of what would have been a reasonable starting demand. The counteroffer is $500. The complainant's next move is to $50,000. The counteroffer is $750. In the next exchange of numbers, the complainant moves to $35,000, followed by a counteroffer of $900, which astonishingly settles the case.
Mathematical formulae are all very well, but they don't take into account all the variables that can come into play at the table. I've long stopped trying to predict what clients will do -- I just strap on my seatbelt and get ready for the ride.
I'm curious to hear what the experts on human behavior have to say on this. And I'm very much looking forward to the next installment in this series, Vickie.
THANKS DIANE!! You can see Diane's thoughts on all things mediation at the Online Guide to Mediation.