Negotiation Games

Negotiation is serious business. The term comes from the Latin phrase denoting the negation (neg) of leisure (otium). Negotiation is hard work and must be taken seriously. The contemporary culture surrounding the study and practice of negotiation is rich and diverse, with coaches, gurus, and “specialists” crowding the field. Some of the most successful negotiators have become stars in the eyes of deep-pocketed businesses and an adoring public. To negotiate well is to get what you want while perhaps also benefiting others or society at large. Good negotiation stories are retold; failures are forgotten.The public is spellbound because tales of negotiation are relatable. Brother Sasha is on to something when he claims that human communication is essentially a matter of negotiation (see epigraph), perhaps not all the time but often enough to intrigue us. In a culture that rewards heroes, most academic negotiation researchers toil in anonymity. However, some manage to do it all: conduct basic and applied research, teach negotiators in the making, and coach captains of industry. Max Bazerman of the Harvard Business School is one of the deans—not to say godfathers—in this world. His is a household name, and yet, in Negotiation: The Game Has Changed, he begins in good Aristotelian manner by establishing his ethos, describing his credentials to entice us to be receptive to his message. Here, Bazerman engages in a one-sided negotiation so that we may read, understand, and recommend his work.The book's subtitle, The Game Has Changed, is smart; it does three things. By using the word “game,” it refers to both formal game theory and the ordinary, playful side of the serious business of negotiation. By using the predicate “has changed,” it invites the reader to expect a transformative text. After reading this book—we are encouraged to think—we will understand the new rules, have the tools to master them, and enjoy improved prospects in life and work.For the most part, Negotiation delivers on the promise. The key change we need to understand, Bazerman suggests, is that the game has become more complex and complicated. One reason for this is the increased globalization of the last few decades, which requires negotiators to acquire cross-cultural competences. Another reason is the ongoing technological revolution, which continues to create new opportunities to communicate while also placing new constraints on channel richness. The face-to-face encounters that dominated and shaped human communication from the Pleistocene to the 20th century are now just one format among many. To illustrate the point, enjoy the scene from The Sopranos, season 1, episode 6, where Uncle Junior and Hesh do a split-pie negotiation over the “back taxes” Hesh owes Junior, the boss. They end up splitting the difference, but the nonverbals as well as the mediation attempts by Tony and Johnny Sack reveal that a richer context, fed by their relationship history, is in play. At the end, Junior appears to concede with a funny racial remark while saving face (TonySopranoYT, n.d. 1:25).The current that rushes the game of negotiation toward greater complexity challenges not only the practitioner but also the theoretician and researcher. Science by necessity abstracts in order to generalize. Inductive power, that is, successful learning and prediction, requires cases to be lumped into reasonable categories. The cliché that everyone (i.e., each case of negotiation) is different is nihilistic because it suggests that the past, however rich it seems to be in memory, is useless in our quest to learn from it and do better moving forward.Empirical sciences, such as psychology, seek to cope with the proliferation of complexity by admitting moderator variables. Adding just one more moderator, such as the popular distinction between individualist and collectivist cultures, may improve the predictability of events within each subcategory, but it gradually washes away the big story, if there is one (Krueger et al., 2024). If the growth of moderators continues unchecked, complexity is modeled with complexity until the map of the world is as large as the world itself. To use an example from the negotiation literature, suppose that starting off with a high demand in order to anchor the process of agreement-seeking works well among strangers, but it can backfire with friends, who will be insulted. The recognition of this contingency seems innocent enough, until we worry that we need to make further distinctions to recognize the channel of communication (face-to-face vs. audio only), the political climate, the likelihood of future interaction, the presence versus absence of affected third parties, information (a)symmetries, individual negotiators versus teams, alternatives to fall back on, and what have you. It is Ptolemy's revenge on Galileo.Whereas the lab scientist can hold all but one factor constant to cleanly study individual effects, practitioners play a different game. They need not worry about the elegance and inductive power of theory and evidence-based formal models. They want help with the challenges they face on their job. All of the researched factors potentially matter, but when there are many such factors, the theoretician–researcher cannot say whether the findings of all the individual one-factor studies can be added up because no one knows whether there might not be higher-order interactions too numerous and too intricate to be understood at once. Bazerman notes that his students and clients push back, asking him how his science applies to whatever specific negotiation challenge looms in their recent experience. Clients want to be coached, and students want to be given actionable skills. Bazerman deserves credit for his efforts to bring the science to the practitioners without surrendering to their demand (at least not in the classroom) to tailor each and every analysis to someone's specific case.In Negotiation, Bazerman harnesses the wild beast of consequential human interaction by highlighting two lessons that transcend the daunting diversity of real-world cases. At the structural level, he urges negotiators to search for ways to “enlarge the pie.” This phrase, he explains, is more apt than the popular term “win–win” because it highlights the process; it tells negotiators what they need to do in order to obtain favorable outcomes. At the psychological level, Bazerman warns that hard work lies ahead. Negotiators must abstain from snap judgments and do their due diligence to prepare; they must seek to understand the other party's perspective, including their experience, preferences, and information; and they must—and this might seem surprising—understand their own experience (or lack thereof), preferences, and information.This is a tall order. Those who have followed Bazerman's work know that his ideas are in close alignment with the dual-system framework of cognitive science. In that framework, the intuitive System 1 receives an appreciative nod for its efficiency and evolutionary adaptiveness, but the judgmental heuristics it uses are faulted for any errors and irrationalities that creep in. The deliberative System 2 receives the credit for settings things right—if it manages to do so. When System 2 does not succeed in its reparative work, advocates of the dual-systems framework demand more cognitive work. If there is still failure at the end of the road, we know whom to blame.The first order of business for the negotiator is to know thyself. They must be clear on their preferences and interests, the alternatives they have should negotiation fail, and the limitations of their own rational and emotional minds (e.g., how liable they are to get angry when faced with an unreasonable or hostile counterpart and how they might cope with their own reactive impulses). Homework and self-reflection can help—to a point. Take, for example, the reservation price, a stock concept in negotiation. As a buyer, what is the most you would pay; as a seller, what is the least amount you would accept? In the formal literature, it is taken for granted that negotiators know their reservation prices, and given this assumption, quantitative modeling has a rock to stand on. The sobering psychological truth is that reservation prices are often elastic; they float with a changing context. Bazerman wonders what it must be like to bargain with a Moroccan carpet merchant when you don't know the true value of a rug or how much you might reasonably willing to spend on it.The absence of a rock-hard reservation price is not necessarily a bad thing; it gives the negotiator room to adapt to a fluid situation. Care must be taken to not be exploited by a ruthless opponent, of course. Sometimes, one's reservation price can be known, but often it is a matter of estimation and judgment under uncertainty. When negotiating with the carpet merchant in Fes, for example, I came to realize how little I knew about a rug's value to me or to anyone, but I understood that the seller was treating me to an education on rug trading in the land of the Berber. In the end, I found satisfaction in the thought that I had paid not only for the physical rug but also for an enjoyable if intangible experience (Krueger, 2012).When crucial elements of self-knowledge are uncertain or in flux, judgmental heuristics can be valuable. They succeed where spreadsheets fail (Gigerenzer et al., 2022; Krueger et al., 2020). Practitioners should be encouraged to build a toolbox of heuristics they can tap into when the due diligence approach fails to yield serviceable insights, when there is reason to suspect that other, hard-to-quantify, considerations are in play, or when a case of negotiation becomes so complex that aggregating relevant evidence raises the specter of overfitting the model.Bazerman briefly acknowledges the salutary role of heuristics, as when he references Messick's (1993) observation that splitting the difference (in contrast to Voss's, 2016, famous refusal) is, under the right circumstances, a sign of social intelligence. If, God forbid, you overpay once, the norm of reciprocity will make it likely that the other party will later return the favor. Twenty-four centuries ago, Xenophon was hip to the power of engineered indebtedness. In his essay on the education of Cyrus the Great, he notes, “You can create huge benefits by creating debts of gratitude” (as rendered by Hedrick, 2006, p. 117). If the norm of reciprocity fails, one can still walk away—or send in the hoplites to set the opponent straight.When it comes to reading one's counterpart's mind, perspective taking reveals itself as an archetypal challenge under social uncertainty. Lacking direct access to the other's mind, and worrying their talk may be cheap, simulating their mind by using one's own mind as an anchor is a heuristic place to start (Krueger, 2000). Ask yourself what you would do if you were negotiating with yourself. Social projection may not deliver 20/20 vision, but it does reduce social perceptual myopia.Negotiation shines most brightly when Bazerman deconstructs received game-theoretic wisdom, which is blind to social heuristics and dynamics, and the willingness of reasonable people to find ways to cooperate to mutual benefit. The main lesson taught by the famous ultimatum game, for example, is that sane people reject lousy deals. Although this delivers a lose–lose outcome in the short run, it sets the stage for mutually profitable exchanges in the long run. A little moral outrage can turn short-term irrationality into long-term reasonableness (Avrahami et al., 2013).Bazerman's finest example of reasonable information sharing outperforming the blind application of dominating strategies comes from his early collaborative work. Game theory claims that the ready acceptance of an offer signals overpayment. However, Valley et al. (1998) showed theoretically and empirically that cooperative negotiators find a positive bargaining zone where both buyer and seller benefit. Other examples of changes in the negotiation game involve multiple offers and contingent contracts, all of which increase flexibility, encourage the flow of information, and make Pareto-efficient solutions more probable.Bazerman strives to make everyone happy, and he brooks no unethical business practices. Yet in Negotiation, he leaves us with a sense of unease regarding the practitioner's obligations. Students have pressed him on how to deal with opponents who are hostile, who refuse to engage with an improved game, or who are just too dumb to see the benefits. In response, Bazerman prizes “wisdom,” a term that, alas, has lost little of its vagueness since the times of Socrates.The final sections of Negotiation are conventional, reviewing the influence techniques cataloged by Robert Cialdini and some of the nudges popularized by Thaler and Sunstein. As to Cialdini (2008), he has struggled with the question of how to use influence techniques ethically when they are, arguably, tools of manipulation. Thaler and Sunstein (2021) are less troubled by such qualms, cheerfully overlooking the patent contradiction between the “paternalist” and the “libertarian.” Bazerman seems to share their optimism when endorsing nudging. Critically, however, there are alternatives. With “boosting,” humans are taught to think like grown-ups and reach their own considered conclusions (Herzog & Hertwig, 2025). Nudging is oversold. Like its promoters, Bazerman notes how opt-in defaults yield longer lists of organ donors than do opt-out defaults. The question, though, is how many lives these defaults save. Not so many, as it turns out (Dallacker et al., 2024).Despite some limitations, Negotiation is a timely and useful book. The game has changed, though perhaps not as much as readers are invited to think. The second half of the book reads rather like a review of the known. As Bazerman is fond of appealing to wisdom, we should not be surprised that some of its pearls were found years ago, as, for example, by Xenophon. Failing to negotiate well is costly. Consider the Iliad (Mitchell, 2011). Why was Achilles so enraged (as in the epigraph: “Tell me, Goddess, of the wrath of Achilles, the son of Peleus”)? Agamemnon, the Greek overlord, had pulled rank and claimed the sexy slave girl Achilles had captured and wanted to keep for himself. The two men argue, but they do not negotiate. Could they not have enlarged the pie, pushing toward the Pareto-efficient frontier? In Bazerman's world, Agamemnon might have left pretty Briseis in Achilles’ hands, in return for Achilles’ willingness to lead the charge against Troy. Much bloodshed could have been avoided, but we would have missed out on some great poetry. So who won?