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The Mind and Heart
The Mind and Heart of the Negotiator

The Mind and Heart of the Negotiator integrates theory, scientific research, and
of the Negotiator
real-world application to provide an in-depth study of advanced bargaining
skills. To help students better navigate the material, the text has been
divided into three sections. The first lays down the groundwork for effective
negotiation and highlights its key principles. The second section focuses on
specific negotiation skills such as establishing trust, building relationships, and Seventh Edition
making ethical decisions. And finally, the third section deals with complex yet
common situations, such as multiparty, cross-cultural, and virtual negotiations.
Integrated examples, quizzes, and self-assessments in select chapters help
students examine their own negotiation styles as they learn and apply the
concepts within.
In addition, the seventh edition includes

• two new chapters, one on understanding the personality and motivational
orientation of the negotiator and the other on managing emotions at both
ends of the negotiation table.
• all-new chapter-opening case studies depicting real-life examples
SEVENTH
EDITION
drawn from business, politics, and world affairs to illustrate effective, as
well as ineffective, negotiation approaches.
• updated coverage based on groundbreaking findings drawn from more
than 175 new scientific articles, including ones on distributive negotiation,
opening offers, and management of emotions.
Thompson
Leigh L.Thompson
CVR_THOM9461_07_GE_CVR_Vivar.indd 1 18/02/21 10:49 AM

SEVENTH EDITION
GLOBAL EDITION
THE MIND AND HEART

OF THE NEGOTIATOR
LEIGH L. THOMPSON
Kellogg School of Management
Northwestern University
Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong Kong
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To the loves of my life:
Bob, Sam, Ray, and Anna

BRIEF CONTENTS
PART I Negotiation Essentials 21
Chapter 1 Negotiation: The Mind and The Heart 21
Chapter 2 Preparation: What to Do before Negotiation 32
Chapter 3 Distributive Negotiation: Claiming Value 5 4
Chapter 4 Integrative Negotiation: Expanding the Pie 82
PART II Negotiation Skills 105

Chapter 5 Understanding Personality and Motivation 105
Chapter 6 Managing Emotions and Contentious Negotiations 123
Chapter 7 Establishing Trust and Building Relationships 154
Chapter 8 Power, Ethics, and Reputation 181
Chapter 9 Creativity, Problem Solving, and Learning in
Negotiation 202
PART III Complex Negotiations 227

Chapter 10 Multiple Parties, Coalitions, and Teams 227
Chapter 11 Cross-Cultural Negotiation 260
Chapter 12 Negotiating in a Virtual World 293
APPENDICES
Appendix 1 Negotiating a Job Offer 315
Appendix 2 Third-Party Intervention 326

CONTENTS
Preface 17
About the Author 20
Part I Negotiation Essentials 21
Chapter 1 NEGOTIATION: THE MIND AND THE HEART 21

The Mind and Heart 22
Relationships versus Economics 22
Satisficing versus Optimizing 22
Short- versus Long-Term Relationships 23
Intra- versus Inter-organizational Negotiation 23
Low- versus High-Stakes Negotiation 23
Win–Win, Win–Lose, and Lose–Lose Negotiation 24
Negotiation as a Core Management Competency 24
Knowledge Economy 24
Specialized Expertise 25
Information Technology 25
Globalization 26
Negotiation Traps 26
Becoming an Effective Negotiator 27
Feedback 28
Strategy 29
Focused Practice 29
Debunking Negotiation Myths 29
Myth 1: Negotiations Are Fixed-Sum 29
Myth 2: You Need to Be Either Tough or Soft 30
Myth 3: Good Negotiators Are Born 30
Myth 4: Good Negotiators Rely on Intuition 30
Chapter Capstone 31
Chapter 2 PREPARATION: WHAT TO DO BEFORE

NEGOTIATION 32
Self-Assessment 33
Targets and Aspirations 33
BATNA 35
Reservation Point 36
Focal Points 36
5

6 Contents
Sunk Costs 39
Target Point versus Reservation Point 39
Negotiation Issues 39
Issue Alternatives 39
Multi-issue Proposals 40
Risk and Uncertainty 40
Endowment Effects 43
Buyer’s Remorse and Seller’s Regret 43
Negotiator Confidence 44
Perspective-Taking 45
Counterparty 45
Are the Parties Monolithic? 45
Counterparties’ Interests and Positions 46
Counterparties’ BATNAs 46
Situational Awareness 46
One-Shot versus Long-Term 46
Transactions versus Disputes 47
Linkage Effects 47
False versus Sincere Negotiations 48
Is It Legal to Negotiate? 48
Ratification 49
Time Constraints 49
Formal versus Handshake Agreement 51
Onsite versus Offsite Meetings 51
Public versus Private 51
Scripted versus Unscripted 52
Single versus Multiple Offers 52
Chapter Capstone 52
Chapter 3 DISTRIBUTIVE NEGOTIATION: CLAIMING VALUE 54

The Bargaining Zone 55
Bargaining Surplus 57
Negotiator’s Surplus 57
Value-Claiming Strategies 58
Accurately Assess Your BATNA 59
Unpack Alternatives 59
Improve Your BATNA 59
Determine Your Reservation Point, but Do Not Reveal It 59

Contents 7
Research the Other Party’s BATNA and Estimate Their

Reservation Point 61
Set High Aspirations (Be Realistic but Optimistic) 61
First Offers 63
Anchoring Information Model 64
Anchoring Effect 65
Range Offers 66
Precise versus Round Numbers 66
Early versus Late First Offers 67
Re-anchoring 67
Concessions 68
Reciprocity versus Aversion 68
Concession Pattern 68
Magnitude of Concessions 69
Timing of Concessions 70
Substantiation 70
Power Conversation Tactics 70
Constraints versus Disparagement 71
“Agreement” versus “Option” 71
Fairness Arguments 71
Social Comparison 76
Equity Principle 77
Final Offers 80
Face-Saving 80
Chapter Capstone 81
Chapter 4 INTEGRATIVE NEGOTIATION: EXPANDING

THE PIE 82
Fixed-Sum versus Variable-Sum Negotiation 82
False Conflict 83
Fixed-Pie Perception 83
Integrative Negotiation 84
Compromise versus Integrative Negotiation 84
Pareto Optimal Agreements 85
Assessing the Likelihood of Win–Win Agreement 86
Multiple Issues 86
Add Issues 86
Side Deals 86
Differing Strengths of Preference 87

8 Contents
Strategies for Expanding the Pie 87

Separate Positions from Interests 87
Perspective Taking 88
Ask Questions about Interests and Priorities 89
Reveal Information about Interests and Priorities 90
Unbundle the Issues 94
Value-Added Trade-offs (Logrolling) 94
Multi-issue Offers versus Single-Issue Offers 95
MESOs: Multiple Equivalent Simultaneous Offers 95
Contingent Contracts 98
Pre-settlement Settlements (PreSS) 100
Post-settlement Settlements 100
Focal Points and Turning Points 101
Decision-Making Model of Integrative Agreements 102
Resource Assessment 102
Assessment of Differences 103
Offers and Trade-offs 103
Acceptance/Rejection Decision 103
Prolonging Negotiation and Renegotiation 103
Chapter Capstone 104
Part II Negotiation Skills 105
Chapter 5 UNDERSTANDING PERSONALITY AND MOTIVATION 105

Individual Differences 105
Implicit Theories 106
Acoustic and Visual Cues 106
“Big 5” Personality Traits 106
Psychopathic Personality Traits 107
Dyadic Interaction 107
Attachment Style 107
Motivational Orientation 108
Cooperative Negotiator 108
Competitive Negotiator 111
Individualistic Negotiator 111
Strategic Issues concerning Motivational Style 112
Gender and Negotiation 114
Economic Outcomes 114

Contents 9
Opening Offers 115

Initiating Negotiations 116
The Backlash Effect 117
The Costs of “Leaning In” 117
Lying and Misrepresentation 118
Discrimination 118
Gender and Third-Party Dispute Resolution 119
Leveling the Playing Field 119
Chapter 6 MANAGING EMOTIONS AND CONTENTIOUS

NEGOTIATIONS 123
Emotions 123
Genuine versus Strategic Emotion 124
Anger 127
Disappointment 129
Sadness 129
Ambivalence 130
Positive Emotion 130
Happiness 132
Emotional Consistency 132
Emotional Intelligence 132
Managing Emotions at the Table 134
Disputes 136
Interests, Rights, and Power Model 137
Time Course of Interests, Rights, and Power 139
Strategic Issues concerning Interests, Rights, and Power 140
Refocusing 141
High Costs Associated with Power and Rights 144
When to Use Rights and Power 144
How to Use Rights and Power 145
Social Dilemmas 146
Social Dilemmas in Business 146
Prisoner’s Dilemma 146
Actual Behavior in Dilemmas 148
Tit-for-Tat 148
Inducing Trust and Cooperation in Social Dilemmas 148
Restoring Broken Trust 151

10 Contents
How to Encourage Cooperation in Social Dilemmas When Parties

Should Not Collude 152
Chapter 7 ESTABLISHING TRUST AND BUILDING

RELATIONSHIPS 154
Money versus Relationships 154
Subjective Value 155
Rapport 155
Sequential Negotiations and Bargaining History 157
Trust and Temptation 157
Trust Propensity 158
Three Types of Trust in Relationships 158
Building Trust: Rational and Deliberate Mechanisms 161
Building Trust: Psychological Strategies 164
Distrust and Suspicion 168
Repairing Broken Trust 169
Relationships in Negotiation 170
Negotiating with Friends 173
Negotiating in Exchange Relationships 176
Multiplex Relationships 178
Chapter 8 POWER, ETHICS, AND REPUTATION 181

Power 182
Sources of Power 182
BATNAs as Power 182
Symmetric versus Asymmetric Power 184
Perspective-Taking 184
Powerlessness 184
Status 185
Status and Negotiation Performance 185
Primary Status Characteristics 186
Secondary Status Characteristics 186
Negotiation Ethics 186
Seven-Factor Model of Ethically Questionable Behavior 187
Lying 190
Bad-Faith Bargaining 194
Good-Faith Bargaining 194

Contents 11
Sins of Omission and Commission 194

Bidding Wars 195
Detecting Deception in Negotiation 196
Making Ethical Decisions 196
Responding to Unethical Behavior 198
Reputation 199
Halos and Forked-Tails 199
Reputations in Negotiation Communities 200
Distributive versus Integrative Reputation 201
BATNAs and Reputations 201
Reputations and Self-Serving Views 201
Chapter 9 CREATIVITY, PROBLEM SOLVING, AND LEARNING IN

NEGOTIATION 202
Creativity in Negotiation 202
Test Your Own Creativity 203
Mental Models of Negotiation 207
Haggling 207
Cost-Benefit Analysis 207
Game Playing 208
Partnership 208
Problem Solving 208
Creative Negotiation Agreements 209
Fractionating Single-Issue Negotiations into Multiple Issues 209
Pattern-Finding 209
Expanding the Pie 210
Bridging 210
Cost Cutting 210
Nonspecific Compensation 211
Structuring Contingencies 211
Improving Negotiation Skills 215
Relationships, Contracts, and Learning 215
Negotiation Skills Training 215
Bilateral versus Unilateral Training 216
Feedback 216
Learning versus Performance Goals 217
Prevention versus Promotion Goals 218

12 Contents
Easy versus Difficult to Learn 219

Analogical Training 219
Counterfactual Reflection 220
Incubation 220
Rational Problem-Solving Model 221
Brainstorming 222
Negotiation Engineering 222
Part III Complex Negotiations 227
Chapter 10 MULTIPLE PARTIES, COALITIONS, AND TEAMS 227

Multiparty Negotiations 228
Key Challenges of Multiparty Negotiations 229
Strategies for Successful Multiparty Negotiations 233
Coalitions 235
Challenges of Coalitions 235
Maximizing Coalitional Effectiveness 240
Principal–Agent Negotiations 241
Disadvantages of Agents 242
Working Effectively with Agents 244
Constituent Relationships 245
Challenges for Constituent Relationships 246
Improving Constituent Relationships 249
Team Negotiation 249
Challenges that Face Negotiating Teams 251
Improving Team Negotiation 252
Intergroup Negotiation 254
Challenges of Intergroup Negotiations 254
Optimizing Intergroup Negotiations 256
Chapter 11 CROSS-CULTURAL NEGOTIATION 260

Learning about Culture 261
Defining Culture 261
Prototypes versus Stereotypes 261
Iceberg Model 262

Contents 13
Cultural Frameworks 262

Hofstede Model 262
Implications for Negotiation 269
Tripartite Model of Culture 270
Tight versus Loose Cultures 276
Challenges of Intercultural Negotiation 277
Creating Value 277
Claiming Value 277
Sacred Values and Taboo Trade-offs 277
Biased Punctuation of Conflict 280
Ethnocentrism 281
Affiliation Bias 281
Faulty Perceptions of Conciliation and Coercion 281
Naïve Realism 282
Cultural Intelligence 283
CQ Model 283
Advice for Cross-Cultural Negotiations 284
Anticipate Differences in Strategy and Tactics 285
Perspective Taking 285
Perceptions of Power 286
Attribution Errors 286
Respect 288
Emotion 289
Perceptions of Time 290
Acculturation Framework 290
Chapter 12 NEGOTIATING IN A VIRTUAL WORLD 293

Place-Time Model of Social Interaction 293
Face-to-Face Communication 294
Same Time, Different Place 296
Different Time, Same Place 299
Different Place, Different Time 299
Information Technology and Effects on Social Behavior 303
Trust 303
Deception 303

14 Contents
Status and Power: The “Weak Get Strong” Effect 304

Social Networks 305
Risk Taking 306
Relationships and Rapport 307
Mentalizing 308
Intergenerational Negotiation 308
Enhancing Technology-Mediated Negotiations 311
Initial Face-to-Face Experience 311
One-Day Videoconference/Teleconference 312
Schmoozing 312
Proactive Medium Management 313
Humor 313
Appendix 1 NEGOTIATING A JOB OFFER 315

Preparation 315
Focus on Your Interests 316
Research the Company and the Industry 317
Determine Your BATNA and Your Reservation Point 317
Research the Employer’s BATNA 317
Determine Your Target Point and Plan Your Opening Offer 318
Prepare Several Scenarios 318
Consider Getting a “Coach” 319
Rehearse and Practice 319
In Vivo: During the Negotiation 319
Think about the Best Way to Position and Present Your
Opening Offer 319
Assume Their Offer Is Negotiable 320
Put the Focus on How You Can Solve Their Problems versus
Making Demands 321
Don’t Reveal Your BATNA or Your Reservation Point 322
Imagine Negotiating on Behalf of Someone Else
(Not Just Yourself) 322
Post-Offer: You Have the Offer, Now What? 322
Think before Posting Anything on Social Media 322
Do Not Immediately Agree to the Offer 323
Get the Offer in Writing 323
Be Enthusiastic and Gracious 323

Contents 15
Assess the Interviewer’s Power to Negotiate with You 323

Do Not Negotiate if You Are Not or Could Not Be Interested 323
Exploding Offers 324
Do Not Try to Create a Bidding War 324
Know When to Stop Pushing 324
Use a Rational Strategy for Choosing among Job Offers 324
State Exactly What Needs to Be Done for You to Agree 325
Appendix 2 THIRD-PARTY INTERVENTION 326

Third-Party Dispute Resolution 326
Mediation 326
Arbitration 327
Mediation–Arbitration 328
Arbitration–Mediation 329
Choices in Third-Party Intervention 329
Outcome versus Process Control 330
Formal versus Informal 330
Invited versus Uninvited 330
Identifiable versus Anonymous 330
Interpersonal versus Intergroup 330
Content versus Process Orientation 331
Facilitation, Formulation, or Manipulation 331
Third-Party Effectiveness 331
Hostile Mediators 331
Mediation and Gender 332
Mediation and Culture 332
Mediation and Mimicry 332
Challenges Facing Third Parties 332
Meeting Disputants’ Expectations 332
Reaching Settlement (if a Positive Bargaining Zone Exists) 333
Promoting a Pareto-Efficient Outcome 333
Promoting Outcomes Perceived as Fair (in the Eyes
of Disputants) 333
Consistency 334
Simplicity 334
Justifiability 334
Generalizability 334
Satisfaction 334

16 Contents
Empowering Parties in the Negotiation Process 334

Debiasing Negotiators 335
Maintaining Neutrality 336
Enhancing the Effectiveness of Third-Party Intervention 337
Accept Your Share of Responsibility 337
Test Your Own Position 337
Role-Play a Third Party in Your Own Dispute 337
Training in Win–Win Negotiation 337
Name Index 338
Subject Index 355

PREFACE
This book is dedicated to students and managers who want to improve their ability to n egotiate—
whether in multimillion dollar business deals or personal interactions. Yes, it is possible to dra-
matically improve your ability to negotiate. You can improve your economic outcomes and also
your relational outcomes, so that you make more money and feel better about yourself and the
people with whom you deal. The book integrates theory, scientific research, and practical ex-
amples. This edition contains three key sections: (1) negotiation essentials; (2) negotiation skills;
and (3) complex negotiations. New to this edition is a chapter on negotiator personality and
motivation; and a chapter on managing emotions in contentious negotiations. The book contains
hundreds of real examples from business, politics, and personal life spanning the globe to illus-
trate effective, as well as ineffective, negotiation skills.
Here is what you can expect when you read this book:
• Illustrative case studies. Each chapter opens with a case study of an actual negotiation,
drawn from business, government, world affairs, community, and personal life. New to this
edition are more than 125 examples from the business world, many involving international
issues.
• Skills-based approach. Each chapter provides practical takeaway points for the man-
ager and the executive. A good example is Chapter 4 on integrative negotiation. A series
of hands-on principles are described that have been proven to increase the value of negoti-
ated deals.
• Self-insight. Many chapters contain several self-assessments, quizzes, and examples
that readers can use to examine their negotiation attitudes and behaviors. For example,
Chapter 5 gives negotiators an opportunity to assess their “motivational” bargaining
style and provides suggestions for how to respond to different personalities and styles.
In Chapter 8, negotiators can examine their ethical principles in negotiation. Moreover,
Chapter 11 provides a deep look at cultural differences in negotiation so that the negotiator
can better understand his or her own cultural style and that of others.
• Advanced bargaining skills. The third section of the book focuses on complex, yet com-
monly occurring negotiation situations, such as multiparty negotiation, cross-cultural nego-
tiation, and non–face-to-face (virtual) negotiations. These sections have been revised in this
edition.
• Scientific research. New to this edition are the groundbreaking results of more than 175
new scientific articles on negotiation.
I benefit greatly from the advice, comments, and critiques given to me by my students
and colleagues, and I hope their advice keeps coming so that I am able to improve upon the
book even further. The research and ideas in this book come from an invaluable set of scholars
in the fields of social psychology, organizational behavior, sociology, negotiation, and cognitive
Note: Every effort has been made to provide accurate and current Internet information in this book. However, the
Internet and information posted on it are constantly changing, so it is inevitable that some of the Internet addresses
listed in this textbook will change.
17

18 Preface
psychology. My research, thinking, and writing have been inspired in important ways by the
following people: Wendi Adair, Cameron Anderson, Evan Apfelbaum, Linda Babcock, Chris
Bauman, Max Bazerman, Kristin Behfar, Terry Boles, Jeanne Brett, Susan Brodt, Karen Cates,
Hoon-Seok Choi, Taya Cohen, Susan Crotty, Jeanne Egmon, Hal Ersner-Hershfield, Gary
Fine, Craig Fox, Adam Galinsky, Wendi Gardner, Dedre Gentner, Robert Gibbons, Kevin
Gibson, James Gillespie, Rich Gonzalez, Deborah Gruenfeld, Erika Hall, Reid Hastie, Andy
Hoffman, Elizabeth Howard, Peter Kim, Shirli Kopelman, Rod Kramer, Laura Kray, Nour
Kteily, Terri Kurtzburg, Geoffrey Leonardelli, John Levine, Allan Lind, George Loewenstein,
Jeff Loewenstein, Brian Lucas, Deepak Malhotra, Beta Mannix, Kathleen McGinn, Vicki
Medvec, Tanya Menon, Dave Messick, Terry Mitchell, Don Moore, Michael Morris, Keith
Murnighan, Janice Nadler, Maggie Neale, Kathy Phillips, Robin Pinkley, Ashleigh Rosette,
Nancy Rothbard, Catherine Shea, Ned Smith, Marwan Sinaceur, Harris Sondak, Roderick
Swaab, Tom Tyler, Leaf Van Boven, Kimberly Wade-Benzoni, Laurie Weingart, Judith White,
and Elizabeth Ruth Wilson. Throughout the text of The Mind and Heart of the Negotiator, I use
the pronoun “we” because so much of my thinking has been influenced and shaped by this set
of eminent scholars.
The revision of this book would not have been possible without the dedication, organiza-
tion, and editorial skills of Larissa Tripp and Ellen Hampton, who created the layout, organized
hundreds of drafts, mastered the figures, and researched many case studies for this book.
In this book, I talk about the “power of the situation,” and how strongly the environment
shapes our behavior. The Kellogg School of Management is one of the most supportive, dynamic
environments I have ever had the pleasure to be a part of. I am particularly indebted to Jeanne
Brett, who created the Dispute Resolution Research Center (DRRC) at Kellogg in 1986.
This book is very much a team effort of the people I have mentioned here, whose talents
are diverse, broad, and extraordinarily impressive. I am deeply indebted to my colleagues and
my students, and I feel grateful that they have touched my life and this book.
GLOBAL EDITION ACKNOWLEDGMENTS

Pearson would like to thank the following people for their work on the Global Edition:
Contributors
Jon and Diane Sutherland
Reviewers
Wen-Dong Li, Chinese University of Hong Kong
Sununta Siengthai, Asian Institute of Technology
Kim Maya Sutton, Jade University of Applied Sciences
OVERVIEW
This book is divided into three major sections. The first section deals with the essentials of
negotiation—the key principles and groundwork for effective negotiation. Chapter 2 leads the
manager through effective preparation strategies for negotiation. Chapter 3 discusses distribu-
tive negotiation skills, or how to optimally allocate resources in ways that are favorable to one’s
self—a process called “slicing the pie.” Chapter 4 is the integral chapter of the book; it focuses

Preface 19
on “win–win” negotiation or, more formally, integrative negotiation. This creative part of nego-
tiation involves expanding the pie of resources in ways that provide more gains to go around.
The second section of the book deals with specific negotiation skills. Chapter 5 focuses
on negotiator personality and motivation. Chapter 6 focuses on managing emotions and conten-
tious negotiation situations. Chapter 7 focuses on establishing trust and building relationships.
This chapter examines business and personal relationships, and how trust is developed, broken,
and repaired. Chapter 8 discusses power, ethics, and reputations in negotiation. In Chapter 9, the
focus is on problem solving and creativity. This chapter provides strategies for learning how to
think out-of-the-box and provides techniques for using creativity and imagination in negotiation.
The third section deals with complex negotiations. Chapter 10 examines the complexi-
ties of negotiating with multiple parties, such as conflicting incentives, coalitions, voting rules,
and how to leverage one’s own bargaining position when negotiating with multiple parties.
Chapter 11 focuses on cross-cultural negotiation, which addresses the key cultural values and
negotiation norms across a variety of global cultures, along with some advice for cross-cultural
negotiations. Chapter 12 focuses on information technology and its impact on negotiation and
uses a place-time model of social interaction to examine the challenges and opportunities of
negotiation as it occurs in the digital era. It includes a section on inter-generational negotiation
and e-negotiations.
Two appendices provide a variety of additional material: Appendix 1 provides tips and a
checklist for negotiating a job offer. Appendix 2 examines third-party intervention.
FACULTY RESOURCES
Instructor Resource Center
At http://www.pearsonglobaleditions.com/, instructors can easily register to gain access to a
variety of instructor resources available with this text in downloadable format. If assistance is
needed, the dedicated technical support team is ready to help with the media supplements that
accompany this text. Visit https://support.pearson.com/getsupport/s/contactsupport for answers
to frequently asked questions and toll-free user support phone numbers.
The following supplements are available with this text:
• Instructor’s Resource Manual
• Test Bank
• TestGen® Computerized Test Bank
• PowerPoint Presentation

ABOUT THE AUTHOR
Leigh L. Thompson joined the Kellogg School of Management in 1995. She is the J. Jay Gerber
Distinguished Professor of Dispute Resolution and Organizations. She directs the Leading High
Impact Teams executive program and the Kellogg Team and Group Research Center and co-
directs the Negotiation Strategies for Managers program. An active scholar and researcher, she has
published over 130 research articles and chapters and has authored 11 books, including: Making
the Team (6th edition); Creativity and Innovation in Organizational Teams; Shared Knowledge in
Organizations; Negotiation: Theory and Research; Creative Conspiracy: The New Rules of Break-
through Collaboration; Stop Spending, Start Managing; The Social Psychology of Organizational
Behavior: Essential Reading; Organizational Behavior Today; The Truth about Negotiations (2nd
edition); and Conflict in Organizational Groups. Thompson has worked with private and public
organizations in the United States, Latin America, Canada, Europe, and the Middle East. Her
teaching style combines experiential learning with theory-driven best practices. For more informa-
tion about Leigh Thompson’s teaching and research, please visit leighthompson.com.
20

1
Part I: Negotiation Essentials
NEGOTIATION: THE MIND

AND THE HEART
The negotiation did not begin with each party sizing up the other and presenting offers accompa-
nied by PowerPoint decks flanked by attorneys and senior executives. Quite the opposite. Disney
chief Bob Iger and 21st Century Fox chairman Rupert Murdoch were drinking wine at Murdoch’s
Moraga Estate winery in Bel Air, and discussing disruptive internet trends impacting their respective
television and film companies. In this meeting, they realized that they shared much in common. A
few weeks later, Iger called Murdoch to explore a merger. Given how well the two had connected
over wine, Murdoch was interested. The two chiefs met in secret, without PowerPoint presenta-
tions, and teams of senior executives at both companies were strategically left out of the loop. The
negotiations, like the wine get-together were smooth, cordial and informal. Two months later, Iger
and Murdoch stood arm-in-arm atop a London skyscraper to announce their intention to construct a
$52.4 billion acquisition deal.1
W hereas most of us are not involved in billion-dollar negotiation deals, one thing
that business scholars and businesspeople are in complete agreement on is that
everyone negotiates nearly every day. Getting to Yes begins by stating, “Like it
or not, you are a negotiator . . . everyone negotiates something every day.”2 Similarly, Lax
and Sebenius, in The Manager as Negotiator, state that “Negotiating is a way of life for
managers when managers deal with their superiors, boards of directors, even legislators.”3
G. Richard Shell, who wrote Bargaining for Advantage, asserts, “All of us negotiate many
times a day.”4 Herb Cohen, author of You Can Negotiate Anything, dramatically suggests
that “Your world is a giant negotiation table.” One business article on negotiation warns,
“However much you think negotiation is part of your life, you’re underestimating.”5
Anytime you cannot get what you want without the cooperation of others, you are
negotiating. Negotiation is an interpersonal decision-making process necessary whenever
we cannot achieve our objectives single-handedly. For this reason, negotiation is your key
communication and influence tool in most relationships.
1
Littleton, C. (2017, December 14). Disney-Fox deal: How secret, ‘smooth and cordial’ negotiations drove a
blockbuster acquisition. Variety. variety.com
2
Fisher, R., & Ury, W. (1981). Getting to yes (p. xviii). Boston: Houghton Mifflin.
3
Lax, D. A., & Sebenius, J. K. (1986). The manager as negotiator (p. 6). New York: Free Press.
4
Shell, G. R. (1999). Bargaining for advantage: Negotiation strategies for reasonable people (p. 76). New York:
Viking.
5
Walker, R. (2003, August). Take it or leave it: The only guide to negotiating you will ever need. Inc. inc.com
21
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22 Part I • Negotiation Essentials
Now, a depressing fact: over 80% of corporate executives and CEOs leave money on the
table. In this chapter, we explain why educated, smart, motivated people often do not realize
their negotiating potential. The good news is that you can do something about it.
The purpose of this book is to improve your ability to negotiate. We do this through an
integration of scientific studies on negotiation and real business cases. And in case you are
wondering, it is not all common sense. Science drives the best practices covered in this book.
We focus on business negotiations, but the principles in this book will no doubt help you in all
aspects of your negotiating life.6
THE MIND AND HEART

Across the sections of this book, we focus on the mind of the negotiator as it involves the
development of rational and thoughtful strategies for negotiation, designed to maximize

economic value. We also focus on the heart of the negotiator because ultimately we care about
relationships and trust. The opening example clearly indicates that the trust developed between
Bob Iger and Rupert Murdoch laid the foundation for a successful negotiation deal.
Relationships versus Economics

In virtually any negotiation, two things are at stake: economic value (i.e., money and scarce
resources) and people (relationships and trust). This book focuses on how negotiators can be
effective in terms of maximizing both economic value and enhancing relationships at the bar-
gaining table. We base our teachings and best practices on scientific research in the areas of
economics and psychology, reflecting the idea that both the bottom line and relationships are
important for successful negotiation.7
Many people believe they need to choose between getting what they want or being liked.
These negotiators often believe that by “taking one for the team,” they can later maximize their
economic gain.8 This strategy is not advisable because we negotiate in long-term relationships
with people who have short-term memories. The relational sacrifice we make today may not
be remembered or reciprocated by the receiving party tomorrow. When people make economic
sacrifices in hopes of securing or maintaining relationships, they are often disappointed. In this
book, we focus on how negotiators can achieve their economic objectives and enhance their
long-term relationships, without simply paying more or receiving less.
Satisficing versus Optimizing

In this book, we distinguish between satisficing and optimizing. According to Nobel Laureate
Herb Simon, satisficing is the opposite of optimizing.9 Satisficing refers to doing just enough to
reach one’s minimum goals. When negotiators satisfice, they take shortcuts and do not maximize
their potential gains. Conversely, when negotiators optimize, they capture all of the potential
gain in a situation.
6
Gentner, D., Loewenstein, J., & Thompson, L. (2003). Learning and transfer: A general role for analogical encoding.
Journal of Educational Psychology, 95(2), 393–408.
7
Bazerman, M. H., Curhan, J. R., Moore, D. A., & Valley, K. L. (2000). Negotiation. Annual Review of Psychology, 51,
279–314.
8
Thompson, L. L. (2017). Don’t take one for the team. Kellogg News and Events. kellogg.northwestern.edu/
news_articles
9
Simon, H. A. (1955). A behavioral model of rational choice. Quarterly Journal of Economics, 69, 99–118.
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Chapter 1 • Negotiation: The Mind and the Heart 23
In negotiation it is important to optimize one’s strategies by setting high aspirations and

attempting to achieve as much as possible. In contrast, when people satisfice, they settle for
something less than they could otherwise have. Over the long run, satisficing (or the acceptance
of mediocrity) can be detrimental to individuals and companies, especially when a variety of
effective negotiation strategies and skills can be effectively employed to dramatically increase
economic gains. We discuss these strategies in detail in the next three chapters.
Short- versus Long-Term Relationships

Another distinction people often struggle with concerns strategies they might use in short-
versus long-term relationships. The intuition is that if a person believed the negotiation was a
single-shot situation, they might behave differently—perhaps more aggressively—than if they
anticipated interacting with the counterparty in the future. In the networked, virtual world, this
distinction is nearly irrelevant because most of our interactions are recorded or known to others.
Even if a negotiator does not actually meet a given counterparty again, by virtue of social media,
a detailed account of their interaction would surely be visible for anyone to see. When the ex-
CEO of Uber Travis Kalnick got into a heated argument with an Uber driver, he did not realize
that Fawzi Kamel had a dashboard recording of the infamous conversation, nor that the record-
ing would be posted online.10 For these reasons, I encourage all of my students and executives
to assume that the details of their negotiation communication and behavior will be accessible for
anyone who might be interested, and consequently, to act as though all negotiations have long-
term implications.
Intra- versus Inter-organizational Negotiation

Would you imagine that there might be different strategies for negotiating with internal people
(i.e., inside one’s own organization) versus external people (i.e., people not employed by one’s
own organization)? At first blush, it would seem that internal negotiations might go more
smoothly and collaboratively than external negotiations. However, that is not always the case.
Envy and internal competition may in fact loom larger when people negotiate internally versus
externally.11
Low- versus High-Stakes Negotiation

On countless occasions, managers and executives in my classroom have commented that
they are not concerned that they failed to reach a win–win outcome because the negotia-
tion was “lowstakes.” When I then ask them how many “low stakes” negotiations they are
involved in per week, they often say as few as 3 and as many as 15, with an average of about
8 or 9. If we then extrapolate for just 1 year, this totals over 400 negotiations; across a span
of 5 years, that is 2,000 negotiations! Even if each negotiation was only $100, we are now
starting to approach a non-trivial economic value. Given that there are no costs for attempt-
ing to optimize, I encourage managers and executives to treat each negotiation—however
small the stakes may be involved—as a significant opportunity to enhance economic and
relational outcomes.
10
Newcomer, E. (2017, March 3) Uber’s taxicab confessions. Businessweek. businessweek.com
11
Menon, T. & Thompson, L. (2010, April). Envy at work. Harvard Business Review. hbr.org
M01_THOM9461_07_GE_C01.indd 23 06/02/21 12:38 PM

WIN–WIN, WIN–LOSE, AND LOSE–LOSE NEGOTIATION

Win–win negotiations are situations in which both negotiators optimize the potential joint gains.
In this sense, they have captured all the possible value in the relationship. In this book, we will
refer to win–win agreements as integrative agreements because the outcome is one that cre-
atively combines parties’ interests in a way that maximizes the joint economic value. Win–win
agreements are typically variable-sum as opposed to fixed-sum situations. Win–lose negotiation
refers to situations in which one party prevails at the other party’s expense. This may be because
one party has threatened the other party or that one party has capitulated to the other party.
Whereas win–win agreements are those in which both parties have gained, win–lose negotia-
tions are ones in which one party has gained at another’s expense. Lose–lose negotiations are
situations in which both parties have made sacrifices that are ultimately unwise or unnecessary,
resulting in an outcome that both parties find less than satisfying.12
NEGOTIATION AS A CORE MANAGEMENT COMPETENCY

Negotiation skills are increasingly important for managers. There are several reasons for
this, including: the knowledge economy, specialized expertise, information technology, and
globalization.
Knowledge Economy
Most businesses and industries today were not in existence 10–20 years prior. According to
the Bureau of Labor Statistics, more than 70,000 businesses have developed since 2010.13 In
the last five years, more than 15 startup companies, including Compass, Instacart, Carbon3D,
OpenDoor, Avant, and Blue Apron grew from nothing, and are now worth billions.14 Many com-
panies have disrupted traditional business models, spurring managers to reinvent themselves as
knowledge brokers in the information economy. Because the nature of knowledge work changes
rapidly, managers of all ages are continuously negotiating their professional identity, acquiring
new skills, and moving into new jobs, industries, and markets. Most people do not stay in the
same job that they take upon graduating from college or receiving their MBA degree.
Millennials are the largest group of professionals in the workforce.15 A large-scale
LinkedIn study reported that millennials change jobs four times (churns) in their first decade
out of college, compared to two job changes by Gen Xers in that same time period.16 LinkedIn
examined its 500 million users, and looking back 20 years, found that churn is accelerating,
especially in certain industries.17 A long-term study of baby boomers by the Bureau of Labor
Statistics revealed that people held an average of 11.7 jobs between age 18 and 48; 27% were
12
Thompson, L., & Hrebec, D. (1996). Lose–lose agreements in interdependent decision making. Psychological
Bulletin, 122(3), 396–409.
13
Bureau of Labor Statistics. (2018). Entrepreneurship and the U.S. Economy. bls.gov/bdm/entrepreneurship/bdm_chart1.htm
14
Carson, B. (2016, December 26). These 15 startups didn’t exist 5 years ago—now they’re worth billions. Business
Insider. businessinsider.com
15
Landrum, S. (2017, November 10). Millennials aren’t afraid to change jobs and here’s why. Forbes. forbes.com
16
Young, J. (2017, July 20). How many times will people change jobs? The myth of the endlessly-job-hopping millennial.
EdSurge. edsurge.com
17
Guy Berger, G. (2016, April 12). Will this year’s college grads job-hop more than previous grads? LinkedIn. blog.
linkedin.com/
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prone to “hop,” defined as having 15 or more jobs over a career; and 10% held 0–4 jobs.18 What
is changing is the stigma associated with job-hopping. Many career coaches encourage millen-
nials to change jobs every 3–4 years. The job-hopper is not simply in pursuit of higher wages;
they are willing to take pay cuts for the right job in a positive work culture and career growth.
Millennials are getting married and having children later than previous generations, and thus,
relocation is doable and often desirable.19
Specialized Expertise
The advent of decentralized business structures and the absence of hierarchical decision making
provide opportunities for managers, but also pose some daunting challenges. People must con-
tinually create possibilities, integrate their interests with others, and recognize the inevitability
of competition both within and between companies. Managers must be in a near-constant mode
of negotiating opportunities. Negotiation comes into play when people participate in joint ven-
tures, partnerships, product launches, reorganizations, and project teams.
The increasing interdependence of people within organizations, both laterally and hier-
archically, implies that people need to know how to integrate their interests and work across
business units and functional areas.
For example, when Walmart realized that their hierarchical, lumbering internal culture did
not allow them to offer a responsive online retail presence, they recruited Jet.com founder Marc
Lore to run Walmart’s entire domestic e-commerce operation. Upon his arrival, a series of inter-
nal negotiations began surrounding how Walmart could shift its business model, yet still honor
the founding principle of value to their customers. Lore recognized the interdependence between
the brick and mortar marketplace and the online marketplace and integrated both sectors’ inter-
ests through creative internal negotiation.20
The increasing degree of specialization and expertise held by businesspeople indicates
that people are more and more dependent on others. However, other people do not always have
similar incentive structures, so managers must know how to promote their own interests while
simultaneously creating joint value for their organizations. This balance of cooperation and
competition requires negotiation. For example, Cheng Wei, founder and CEO of Didi Chuxing,
was in a cooperative relationship with legendary investor Masayoshi Son, when Son wanted to
invest in Wei’s company; but when Wei refused Son’s investment, thereby creating a competitive
situation in which Son threatened to instead invest in a rival company. Ultimately, Wei relented
and took the $5 billion investment for the tech startup.21
Information Technology
Information technology also provides special opportunities and challenges for negotiators.
Information technology has created a culture of 24/7 availability. With technology that makes it
possible to communicate with people anywhere in the world, managers are expected to negotiate
at a moment’s notice. Because customers expect companies to be accessible to them 24/7,
18
Bureau of Labor Statistics. (2018). National Longitudinal Surveys. United States Department of Labor. bls.gov/nls/
nlsfaqs.htm#anch43
19
Landrum, S. (2017, November 10). Millennials aren’t afraid to change jobs and here’s why. Forbes. forbes.com
20
Stine, B., & Boyle, M. (2017, May 4). Can Wal-Mart’s expensive new e-commerce operation compete with Amazon?
Bloomberg. bloomberg.com
21
Storm, P., Alpeyev, P., & Chen, L. (2018, January 8). Masayoshi Son has a deal you can’t refuse. Businessweek, p. 14.
M01_THOM9461_07_GE_C01.indd 25 06/02/21 12:38 PM

businesses have reimagined how to respond quickly. For example, in 2016, only 2 million busi-
nesses were on Instagram; in 2017, 25 million had accounts, and over 80% of Instagram users
voluntarily connect with these business accounts. Conversely, people who are not online feel the
pressure to perform when they finally do log back on. For example, Arianna Huffington, founder
of The Huffington Post, promised her daughter that during her college tour she would not check
her smartphone. Huffington kept her promise, not turning on her smartphone during the tour, but
while her daughter slept in the hotel room that night, she admitted to staying up all night answer-
ing e-mails and making sure she didn’t miss anything from the few hours she took off.22
Globalization
Most managers must effectively cross cultural boundaries to do their jobs. Setting aside obvious
language and currency issues, globalization presents challenges in terms of different norms of
communication. Chip Starnes, cofounder of Specialty Medical Supplies, learned a harrowing
lesson in cultural fit when he showed up at his factory near Beijing, China, to deliver severance
payments for 30 workers laid off when Starnes moved a company division to Mumbai, India.
The remaining 100 employees, convinced the entire factory would be closed, demanded sever-
ance and barricaded Starnes inside the plant for 6 days. Cases of managers being held captive
by dissatisfied workers, while police look the other way, is not a rare circumstance in China,
a cultural fact that Starnes certainly learned. After accepting the workers’ demands—giving
97 workers 2 months’ salary and compensation, and rehiring the previously laid-off workers on
new contracts—Starnes was released. Most notably, Starnes was able to learn from his leader-
ship failure and developed a new product to manufacture in Shenzhen. 23
Managers need to develop negotiation skills that can be successfully employed with
people of different nationalities, backgrounds, and personalities. Consequently, a negotiator who
has developed a bargaining style that works only within a narrow subset of the business world
will suffer, unless they broaden their negotiation skills to effectively work with different people
across functional units, industries, and cultures.24 It is a challenge to develop negotiation skills
general enough to be used across different contexts, groups, and continents, but specialized
enough to provide meaningful behavioral strategies in a given situation.
NEGOTIATION TRAPS
Judging from their performance in realistic business negotiation simulations, most people fall
short of their potential at the negotiation table.25 Numerous business executives describe their
negotiations as win–win only to discover that they left hundreds of thousands of dollars on
the table. Fewer than 4% of managers reach win–win outcomes when put to the test,26 and the
22
Huffington, A. (2013, March 14). Arianna Huffington on burning out at work. Businessweek. businessweek.com
23
MacLeod, C. (2013, June 27). U.S. exec Chip Starnes freed from China factory. USA Today. usatoday.com; American
boss hostage arrives back to U.S. (2013, June 28). Associated Press. ap.org.; Pounds, M. (2016, June 13). Coral Springs
business owner, taken hostage in China in 2013, is returning there with new company. Sun Sentinel. sun-sentinel.com
24
Bazerman, M. H., & Neale, M. A. (1992). Negotiating rationally. New York: Free Press.
25
Neale, M. A., & Bazerman, M. H. (1991). Cognition and rationality in negotiation. New York: Free Press; Thompson, L.,
& Hrebec, D. (1996). Lose–lose agreements in interdependent decision making. Psychological Bulletin, 120(3), 396–409;
Loewenstein, J., Thompson, L., & Gentner, D. (2003). Analogical learning in negotiation teams: Comparing cases promotes
learning and transfer. Academy of Management Learning and Education, 2(2), 119–127.
26
Nadler, J., Thompson, L., & van Boven, L. (2003). Learning negotiation skills: Four models of knowledge creation
and transfer. Management Science, 49(4), 529–540.
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incidence of outright lose–lose outcomes is 20%.27 Even on issues where negotiators are in per-
fect agreement, they fail to realize this 50% of the time.28
In our research and teaching, we have observed and documented four major shortcomings
in negotiation:
• Leaving money on the table (also known as “lose–lose” negotiation) occurs when nego-
tiators fail to recognize and capitalize on their win–win potential.
• Settling for too little (also known as “the winner’s curse”) occurs when negotiators make a
too-large concession, resulting in a too-small share of the bargaining pie.
• Walking away from the table occurs when negotiators reject terms offered by the other
party that are demonstrably better than any other option available to them. Sometimes this
shortcoming is traceable to hubris or pride; other times it results from gross miscalculation.
• Settling for terms that are worse than your best alternative (also known as the “agree-
ment bias”) occurs when negotiators feel obligated to reach agreement even when the
settlement terms are not as good as their other alternatives.
This book reveals how to avoid these errors, create value in negotiation, get your share of
the bargaining pie, reach agreement when it is profitable to do so, and quickly recognize when
agreement is not a viable option in a negotiation.
BECOMING AN EFFECTIVE NEGOTIATOR

In reviewing all of the ways that negotiators fail, it is important to be clear about what it means
to be an effective, successful negotiator. Successful negotiation strategies involve preparation,
strategy at the negotiation table, and then, post-negotiation behaviors. Exhibit 1-1 summarizes
the behaviors and measures that are important to consider when evaluating negotiation perfor-
mance. Prior to negotiation, a key skill is to initiate negotiations and then, prepare effectively.
During negotiation, the negotiator executes their planned strategy and should be ready to
evaluate the quality of negotiated settlements. Following the negotiation, there is always concern
about whether the agreed upon terms will be honored and how the negotiation will affect one’s
reputation. Indeed, investigations of contract negotiations consider four key objectives in assess-
ing the quality of contracts: (1) how to maximize the likelihood of reaching a good agreement;
(2) how to reach an agreement that fulfills the intended purpose; (3) how to reach an agreement
that will last; and (4) how to reach an agreement that will lead to subsequent negotiations.29
The dramatic instances of lose–lose outcomes, the winner’s curse, walking away from the
table, and the agreement bias raise the question of how people can become more effective at the
bargaining table. Fortunately, we’ve studied this question in depth and have developed a method
by which people can measurably improve their performance.
In this book, we focus on three major negotiation skills: creating value, claiming value,
and building trust. By the end of this book, you will have a mental model that will allow you to
prepare for virtually every negotiation situation. By preparing effectively for negotiations, you
can enjoy the peace of mind that comes from having a strategic plan. Things may not always go
27
Thompson & Hrebec, “Lose–lose agreements in interdependent decision making.”
28
Thompson & Hrebec, “Lose–lose agreements in interdependent decision making.”
29
Tomlinson, E.C., & Lewicki, R. J. (2015). The negotiation of contractual agreements. Journal of Strategic Contracting
and Negotiation, 1(1), 85–98.
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EXHIBIT 1-1
Evaluating the Success of Negotiation
Prior to Negotiation Negotiation Post-Negotiation

Initiate negotiation Strategy Post-deal implementation
Preparation • Opening Durability
• Planning worksheet • First offer(s)
• Counter-offers Reputation
• Assess BATNA
• Develop reservation • Substantiation and Willingness to negotiate
price persuasion again
• Develop target price • Concessions
Trust
(aspiration) Agreements
• Efficiency
• Economic value
• Individual gain
• Joint gain
Relational value
• Satisfaction
• Fairness
according to plan, but your mental model will allow you to perform effectively and, most impor-
tant, to learn from your experiences.
There are three key elements to improving your negotiation skills: feedback, strategy, and
focused practice.
Feedback
Experience, in the absence of feedback, is largely ineffective in improving negotiation skills.30
For example, can you imagine trying to learn mathematics without ever doing homework or tak-
ing tests? Without diagnostic feedback, it is very difficult to learn from experience.
People with more experience grow more confident, but the accuracy of their judgment and
the effectiveness of their behavior do not increase in a commensurate fashion.31 Overconfidence
can be detrimental because it may lead people to take unwise risks. In most real-world negotia-
tion siutations, managers do not receive feedback on how well they are doing. In our research,
we have found that people who are provided with feedback immediately following their nego-
tiation are more likely to adjust their strategies and perform better in subsequent negotiations.
Of the many types of feedback that are potentially available to negotiators, information about
30
Loewenstein, Thompson, & Gentner, “Analogical learning in negotiation teams”; Nadler, Thompson, & van Boven,
“Learning negotiation skills”; Thompson, L., & DeHarpport, T. (1994). Social judgment, feedback, and interpersonal
learning in negotiation. Organizational Behavior and Human Decision Processes, 58(3), 327–345; Thompson, L.,
Loewenstein, J., & Gentner, D. (2000). Avoiding missed opportunities in managerial life: Analogical training more pow-
erful than case-based training. Organizational Behavior and Human Decision Processes, 82(1), 60–75.
31
Fenton-O’Creevy, M., Nicholson, N., Soane, E., & Willman, P. (2003). Trading on illusions: Unrealistic perceptions of
control and trading performance. Journal of Occupational and Organizational Psychology, 76(1), 53–68.
M01_THOM9461_07_GE_C01.indd 28 06/02/21 12:38 PM

the counterparty’s interests and priorities are particularly important.32 For example, negotiators
who received feedback about the counterparty’s interests immediately following a negotiation
showed the greatest improvement in subsequent negotiations.33
Strategy
Once a negotiator has learned that they have not optimized in a given situation, the obvious ques-
tion becomes, “What should I have done differently?” The negotiation strategies we introduce in
this book are designed to be relevant across situations and therefore, are not context-dependent.
Stated another way: the strategies that lead to success in a pharmaceutical negotiation are also
those that lead to success in an oil products negotiation. In fact, our research suggests that it is
beneficial for students of negotiation to learn negotiation skills in an industry or domain that
they are unfamilar with.34 Why? Learning negotiation skills only in a context in which one has
depth of expertise may lead to context-dependence, such that the skills do not transfer.35
Focused Practice
A key step in learning to be an effective negotiator is behavioral practice. It is one thing to pas-
sively learn about negotiation skills, it is quite another to put them into practice via simulations.
In our research, we’ve found that experiential learning is dramatically more effective than didac-
tic learning (i.e., merely listening to a lecture).36
DEBUNKING NEGOTIATION MYTHS

When we delve into managers’ theories and beliefs about negotiation, we often find that they
operate with faulty beliefs. Before we begin our journey toward developing a more effective
negotiation strategy, we need to dispel several faulty assumptions and myths about negotiation.
Belief in these myths may hamper people’s ability to learn effective negotiation skills and in
some cases, reinforce poor negotiation skills. In this section, we expose four of the most preva-
lent myths about negotiation behavior.
Myth 1: Negotiations Are Fixed-Sum

Probably the most common myth is that most negotiations are fixed-sum, or fixed-pie, in
nature, such that whatever is good for one person must ipso facto be bad for the other party.
The truth is that most negotiations are not purely fixed-sum; in fact, most negotiations are
variable-sum, meaning that if parties work together, they can create more joint value than if they
are purely combative. However, effective negotiators also realize that they cannot be naively
32
Van Boven, L., & Thompson, L. (2003). A look into the mind of the negotiator: Mental models in negotiation. Group
Processes & Intergroup Relations, 6(4), 387–404.
33
Thompson, L. & Hastie, R. (1990). Judgment tasks and biases in negotiation. In B. H. Sheppard, M. H. Bazerman,
and R. J. Lewicki (Eds.), Research on negotiation in organizations: A series of analytical essays and critical reviews.
(pp. 31–54). Greenwich, CT: JAI Press.
34
Kim, J., Thompson, L., & Loewenstein, J. (2018). Open for learning: Low familiarity cases and general questions
foster knowledge transfer. Working paper.
35
Loewenstein, J., Thompson, L., & Gentner, D. (1999). Analogical encoding facilitates knowledge transfer in negotia-
tion. Psychonomic Bulletin & Review, 6(4), 586–597.
36
Nadler, J., Thompson, L., Van Boven, L. (2003, June). Learning negotiation skills: Four models of knowledge creation
and transfer. Management Science, 49(4), 529–540.
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trusting because any value that is created must ultimately be claimed by someone at the table.
Our approach to negotiation is based on Walton and McKersie’s view that negotiation is a
mixed-motive enterprise, such that parties have incentives to cooperate as well as compete.37
Myth 2: You Need to Be Either Tough or Soft

The fixed-sum myth gives rise to a myopic view of the strategic choices that negotiators have.
Most negotiators believe they must choose between behaving in a tough (and sometimes puni-
tive) fashion or being “reasonable” to the point of soft and concessionary. We disagree. The truly
effective negotiator is neither “tough as nails” nor “soft as pudding,” but rather, principled.38
Effective negotiators follow an “enlightened” view of negotiation and correctly recognize that to
achieve their own outcomes they must work effectively with the other party (and hence, cooper-
ate) but must also leverage their own power and strengths.
Myth 3: Good Negotiators Are Born

A pervasive belief is that effective negotiation skills are something that people are born with, not
something that can be readily learned. This notion is false because most excellent negotiators are
self-made. In fact, naturally gifted negotiators are rare.39 We often hear their stories, but we must
remember that their stories are selective, meaning that it is always possible for someone to have
a lucky day or a fortunate experience. This myth is often perpetuated by the tendency for people
to judge negotiation skills by their car dealership experiences. Purchasing a car is certainly an
important and common type of negotiation, but it is not the best context by which to judge your
negotiation skills. The most important negotiations are those that we engage in every day with
our colleagues, supervisors, coworkers, and business associates. These relationships provide
a much better index of one’s negotiation effectiveness. In short, effective negotiation requires
practice and feedback. The problem is that most of us do not get an opportunity to develop effec-
tive negotiation skills in a disciplined fashion; rather, most of us learn by doing. Experience is
helpful, but not sufficient.
Indeed, people who view negotiation as a challenge are more successful in reaching high-
quality deals than people who view negotiation as threatening.40 Moreover, people who believe
that negotiation ability can be improved with experience and practice are more likely to discover
win–win agreements than people who believe that negotiation skills are not teachable.41
Myth 4: Good Negotiators Rely on Intuition

Many seasoned negotiators believe that their negotiation style involves a lot of “gut feeling” or
intuition. We believe that intuition does not serve people well. Effective negotiation involves
deliberate thought and preparation and is quite systematic. The goal of this book is to help
37
Walton, R. E., & McKersie, R. B. (1965). A behavioral theory of labor relations. New York: McGraw-Hill.
38
Bazerman & Neale, Negotiating rationally; Fisher & Ury, Getting to yes.
39
Thompson, L. (2014, December 3). Masters of negotiation: Born this way? Kellogg News & Events. kellogg.
northwestern.edu/news_articles/
40
O’Connor, K. M., Arnold, J. A., & Maurizio, A. M. (2010). The prospect of negotiating: Stress, cognitive appraisal and
performance. Journal of Experimental Social Psychology, 46(5), 729–735.
41
Wong, E. M., Haselhuhn, M. P., & Kray, L. J. (2012). Improving the future by considering the past: The impact
of upward counterfactual reflection and implicit beliefs on negotiation performance. Journal of Experimental Social
Psychology, 48(1), 403–406.
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managers effectively prepare for negotiation, become more aware of their own strengths and
shortcomings, and develop strategies that are proactive (i.e., they anticipate the reactions of
their opponent), rather than reactive (i.e., they are dependent upon the actions and reactions of
their opponent). This is all to say that excellent negotiators are not guided by intuition; rather,
they are deliberate planners. As a general rule, don’t rely on your intuition unless you are an
expert.
CHAPTER CAPSTONE
This book promises three things: first (and most important), reading this book will improve
your ability to negotiate successfully. You will experience fewer sleepless nights because you
will have a solid framework and excellent toolbox for successful negotiation which can produce
better results for you and your business. However, in making this promise, we must also issue a
warning: successful negotiation skills do not come through passive learning. Rather, you need
to actively challenge yourself. We can think of no better way to engage in this challenge than
to supplement this book with classroom experiences in negotiation in which managers can test
their negotiation skills, receive timely feedback, and repeatedly refine their negotiation strate-
gies. Moreover, within the classroom, data suggests that students who take the course for a grade
will be more effective than students who take the course pass-fail.42
Second, we provide you with a general strategy for successful negotiation in many
different kinds of situations. Take a look at the Table of Contents. Notice the distinct absence
of chapter titles such as “Negotiating in the Pharmaceutical Industry” or “Real Estate
Negotiations” or “High-Tech Negotiations.” We don’t believe that negotiations in the pharma-
ceutical world require a fundamentally different set of skills from those needed for negotia-
tions in the insurance or software industries. Rather, negotiation skills are transferable across
situations.43 In making this statement, we do not mean to imply that all negotiation situations
are identical. This assumption is patently false because negotiation situations differ dramati-
cally across cultures and industries. However, certain key negotiation principles are essential
in all these different contexts. The skills in this book can be effectively implemented across a
wide variety of situations ranging from complex, multiparty, multicultural deals to one-on-one
personal exchanges.
In addition, this book offers an enlightened model of negotiation. Being a successful
negotiator is not dependent on your opponent’s lack of familiarity with a book such as this one,
or lack of training in negotiation. In fact, it would be ideal if your key clients and customers
knew about these strategies. This approach follows what we call a fraternal twin model, which
assumes that the person you are negotiating with is every bit as motivated, intelligent, and pre-
pared as you. Thus, the negotiating strategies and techniques outlined in this book do not rely
on “outsmarting” or tricking the other party; rather, they teach you to focus on simultaneously
expanding the pie of resources and ensuring the resources are allocated in a manner that is favor-
able to you.
42
Craver, C. B. (1998).The impact of a pass/fail option on negotiation course performance. Journal of Legal Education,
48(2), 176–186.
43
Thompson, L., Lucas, B. J., & Hall, E. V. (2014). Negotiation bandwidth. In N. M. Ashkanasy, O. B. Ayoko, & K. Jehn
(Eds.). Handbook of conflict management. Cheltenham UK: Edward Edgar Publishing.
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2 PREPARATION: WHAT TO DO
BEFORE NEGOTIATION
Maersk Oil Trading, a Danish company, operates 786 vessels worldwide and has annual revenues
in excess of $31 billion. The cap on permissible sulfur content in fuel oil on ships operating outside
designated emission control areas has been significantly reduced by an International Maritime
Organization (IMO) regulation that came into effect in January 2020. Maersk Oil Trading also supplies
several external customers, so it needed a robust supply chain of low-sulfur fuel before the regulation
came into effect. Niels Henrik Lindegaard, the head of Maersk, had the daunting task of successfully
handling several negotiations with the company’s partners and customers to ensure that the legally
required reductions were enforced and that services would remain uninterrupted. He entered into a
new partnership with Dutch Royal Vopak for a bunker facility that would provide around 2.3 million
tons of low-sulfur fuel (around 20% of Maersk Oil’s needs). Having the deal with Vopak already on
the table meant that Maersk Oil Trading would be able to lease the tank but own the oil, and Vopak
would operate the tanks on Maersk’s behalf. Maersk thus had a competitive edge before negotiations
with other suppliers and customers began and could proceed with a degree of confidence.1
A
s the opening example illustrates, preparation lays the groundwork for successful
negotiation. The work that you do prior to negotiation pays off substantially
when you finally find yourself seated at the table. The 80/20 rule applies to ne-
gotiation; about 80% of your effort should go toward preparation and 20% should be the
actual work involved in the negotiation. Most people clearly realize that preparation is
important, yet most do not prepare in an effective fashion. We noted in Chapter 1 that most
negotiators operate under the fixed-pie perception.2
Negotiators who have fixed-pie perceptions usually adopt one of three mindsets
when preparing for negotiation:
1. They resign themselves to capitulating to the other side (soft bargaining).
2. They prepare themselves for attack (hard bargaining).
3. They compromise in an attempt to reach a midpoint between their opposing de-
mands (often regarded to be a win–win negotiation, when in fact, it is not).
1
Raun, K. G. (2018, August 29). Maersk negotiating several solutions for the 2020 sulfur cap. ShippingWatch.
shippingwatch.com.
2
Thompson, L., & Hastie, R. (1990). Social perception in negotiation. Organizational Behavior and Human
Decision Processes, 47(1), 98–123.
32
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Chapter 2 • Preparation: What to Do Before Negotiation 33
Depending on what the other party decides to do in the negotiation, fixed-pie perceptions
can lead to a battle of wills (e.g., if both parties are in attack mode), mutual compromise (e.g., if
both parties are soft), or a combination of attack and capitulation. The common assumption in all
three approaches is that concessions are necessary by one or both parties to reach an agreement.
The fixed-pie perception is almost always wrong; thus, choosing between capitulation, attack,
and compromise is not an effective approach to negotiation.
A more accurate model of negotiation is to approach it as a mixed-motive decision-making
enterprise. As a mixed-motive enterprise, negotiation involves both cooperation and competi-
tion. In this chapter, we review the essentials of effective preparation, whether it be with a
next-door neighbor, a corporate executive officer, or someone from a different culture. Effective
preparation encompasses three general skills:
1. Self-assessment
2. Perspective-taking
3. Situational awareness
We systematically review each of these skills. For each, we pose questions that negotiators
should ask themselves when preparing for negotiation. There are several advantages for having a
framework for preparation. First, it can save the negotiator time. Second, it assures the negotia-
tor that relevant information will be considered. Third, when companies and organizations use
frameworks that are consistent, this allows colleagues to communicate clearly with one another
and develop a shared mental model. For example, when negotiation scholars are consistent in how
they write about negotiation and conflict management, this improves theory, research, and best
practices.3 Indeed, according to the OMoN (Organizational Model of Negotiation), organizations
should consider four things: (1) how individuals interact at the negotiation table; (2) how different
negotiations impact one another (linkages); (3) how companies can best organize their negotiation
functions (infrastructure); and (4) how negotiation can be a competitive advantage (capability).4
SELF-ASSESSMENT
The most important questions a negotiator needs to ask of himself or herself at the outset of
negotiation are “What do I want?” and “What are my alternatives?” Many people do not think
carefully about what they want before entering negotiations. The second question defines a
negotiator’s power in the negotiation and influences the ultimate outcome of the negotiation.
Targets and Aspirations

In any negotiation scenario, a negotiator needs to determine what would constitute an ideal
outcome. This ideal is known as a target or aspiration (sometimes called a target point or
aspiration point). Identifying a target or aspiration may sound straightforward enough, but
three major problems often arise:
1. The under aspiring negotiator sets his or her target or aspirations too low. The under
aspiring negotiator opens the negotiation by requesting something that the counterparty
3
Ebner, N., & Parlamis, J. (2017, September). Weaving together theory, research, practice, and teaching: A four-dimensional
approach to negotiation and conflict management work. Negotiation and Conflict Management Research, 10(4), 245–251.
4
Borbely, A., & Caputo, A. (2017, October). Approaching negotiation at the organizational level. Negotiation and
Conflict Management Research, 10(4), 306–323.
M02_THOM9461_07_GE_C02.indd 33 23/01/21 10:32 PM

immediately agrees to and thus, the negotiator realizes they were too generous. The
winner’s curse refers to the feeling that if the other party immediately agrees, you have
offered too much!5 Consider the Olympic Games bidding process; the winning bids in this
competitive process are so astronomical that on average, host cities incur cost over-runs
of 179% without any long-term economic gains following the event.6 After winning the
bid for the 2014 winter Olympics Russia’s Olympics organizers spent over $9 billion on a
high-speed train line constructed for the 2 week event, which proved to be useless to the
host country after the games.7 The immediate acceptance of one’s offer by an opponent
signals that a negotiator did not ask for enough. A personal example of the winner’s curse
was shared by a student in my own class. Recently engaged, the deployed military officer
wanted to bring back a beautiful gold necklace for his bride-to-be. When he entered the
jewelry store, he knew enough not to offer full price for the gold necklace, so he offered
exactly half of the marked price. The shopkeeper was overjoyed, immediately accepted the
offer and even included the matching earrings and bracelet! His key mistake? His initial
offer was too generous because he had not adequately prepared. The winner’s curse is dif-
ficult to remedy: In a series of experiments, negotiators were given different parameters,
full feedback, and several counterexamples in an attempt to counteract the winner’s curse,
but none were effective in eliminating the faulty behavior.8
2. The over aspiring negotiator or positional negotiator is too “tough”; he or she sets the
target point too high and refuses to make any concessions. The near demise of Hostess
Brands, the 82-year-old maker of bakery treats, began in 2009 when it emerged from
bankruptcy and its unions agreed to $220 million annually in labor cost–related conces-
sions. But Hostess soon racked up $2 billion in unfunded pension liabilities, and the
unions balked at further concessions. They eventually organized a strike. In response, the
hedge funds that controlled Hostess decided to shut the company down rather than risk
further losses on their investment. A lack of concessions and unrealistic market expecta-
tions by both sides led to Hostess being brought to auction. However, just days before the
auction, Metropolous & Co. and Apollo Global Management bought Hostess.9
3. The grass-is-greener negotiator does not know what he or she really wants—only that
he or she wants what the other party does not want to give—and does not want what the
other party is willing to offer. This type of negotiation behavior is also known as reactive
devaluation.10 For example, in an opinion survey conducted in the 1980’s regarding
5
Akerlof, G. (1970). The market for lemons: Quality uncertainty and the market mechanism. Quarterly Journal of
Economics, 84, 488–500; Neale, M. A., & Bazerman, M. H. (1991). Cognition and rationality in negotiation. New York:
Free Press.
6
Black, M. (2012, July 30). Winner’s curse? The economics of hosting the Olympics Games. CBC. cbc.ca
7
Eaton, J. (2018, February 9). It’s time for the pop-up Olympics. CityLab. citylab.com
8
Grosskopf, B., Bereby-Meyer, Y., & Bazerman, M. (2007). On the robustness of the winner’s curse phenomenon.
Theory and Decision, 63(4), 398–418.
9
Adams, S. (2012, November 21). Why Hostess had to die. Forbes. forbes.com; Notte, J. (2013, March 13). Twinkies
get rescued. MSN Money. money.msn.com
10
Ross, L., & Stillinger, C. (1991). Barriers to conflict resolution. Negotiation Journal, 7(4), 389–404; Curhan, J. R.,
Neale, M. A., Ross, L., & Rosencranz-Engelmann, J. (2008). Relational accommodation in negotiation: Effects of
egalitarianism and gender on economic efficiency and relational capital. Organizational Behavior and Human Decision
Processes, 107(2), 192–205.
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possible arms reductions by the United States and the Soviet Union, respondents were
asked to evaluate the terms of a nuclear disarmament proposal, a proposal that was either
allegedly authored by the United States, the Soviet Union, or a neutral third party.11 In all
cases, the proposal was identical; however, reactions to it depended upon who allegedly
initiated it. The terms were seen as unfavorable to the United States when the Soviets were
the initiators, even though the same terms appeared moderately favorable when attributed
to a neutral third party and quite favorable when attributed to the United States.12
BATNA
A negotiator needs to determine his or her best alternative to a negotiated agreement, or BATNA
(Best Alternative to a Negotiated Agreement).13 Negotiators should be willing to accept any
set of terms superior to their BATNA and reject outcomes that are worse than their BATNA.
Surprising as it may seem, negotiators often reject proposals that are better than their BATNA
and accept deals that are worse than their BATNA!
BATNAS AND REALITY A BATNA is not something that a negotiator wishes for; rather, it is
determined by objective reality. A common problem we have seen in our training of MBA stu-
dents and executives is that negotiators are reluctant to acknowledge their actual BATNAs, and
they fall prey to wishful thinking and unrealistic optimism.
BATNAS ARE TIME SENSITIVE Your BATNA—once properly identified—is time sensitive. At
any point in time, your BATNA is either improving or deteriorating as a result of market forces
and environmental and situational conditions. Thus, negotiators should constantly attempt to
improve their BATNAs. One strategy for improving BATNAs is to follow Bazerman and Neale’s
“falling in love” rule, which means not falling in love with one house, one job, or one set of cir-
cumstances but instead, identifying two or three options of interest.14 By following this strategy,
the negotiator has a readily available set of alternatives that represent viable options should the
current alternative come at too high a price or be eliminated. The “falling in love” rule is diffi-
cult to follow because most people set their sights on one target job, house, or set of terms, and
exclude all others. Many negotiators are reluctant to recognize their BATNAs and confuse them
with their aspiration point.
Consider how Irish airline Ryanair’s BATNA was put to the test by Irish pilots who gave
the company less than 2 days to reach an agreement to recognize their labor union, or else face
the threat of strikes. Ryanair was preparing for the busy Christmas and New Year travel period
and was aware that unionization could increase costs, and adversely affect Ryanair profits.
Accordingly, CEO Michael O’Leary softened his position hours before the pilot strike was to
commence and signed written confirmation that going forward, the labor union would be recog-
nized for collective bargaining purposes.15
11
Ross, L., & Stillinger, C. (1991). Barriers to conflict resolution. Negotiation Journal, 7(4), 389–404.
12
Oskamp, S. (1965). Attitudes toward U.S. and Russian actions: A double standard. Psychological Reports, 16, 43–46.
13
Fisher, R., & Ury, W. (1981). Getting to yes. Boston: Houghton Mifflin.
14
Bazerman, M. H., & Neale, M. (1992). Negotiating rationally. New York: Free Press.
15
O’Halloran, B. (2017, December 21). Ryanair’s Irish pilots lift strike threat but airline faces Friday stoppage in Germany.
Irish Times. bloomberg.com/news/articles/2017-12-19/ryanair-pilots-set-recognition-deadline-as-strike-threat-lingers;
Doyle, D. (2017, December 19). Ryanair pilots renew strike threat with recognition deadline. Bloomberg. bloomberg.com
M02_THOM9461_07_GE_C02.indd 35 23/01/21 10:32 PM

DO NOT LET THE OTHER PARTY MANIPULATE YOUR BATNA The counterparty has an in-
centive to minimize the quality of your BATNA and thus, will be motivated to provide negative
information vis-à-vis your BATNA.
If you have not properly prepared, you might be particularly influenced by such persua-
sive appeals. However, your BATNA should not change as a result of the other party’s persua-
sion techniques. Your BATNA should only change as a result of objective facts and evidence.
In a negotiation, the person who stands to gain most by changing your mind should be
the least persuasive. Thus, it is important to develop a BATNA before commencing negotiations
and to stick to it during the course of negotiations. It is helpful to write your BATNA in ink on a
piece of paper and put it in your pocket before negotiating. If you feel tempted to settle for less
than your BATNA, it may be a good time to pull out the paper, halt the negotiation process, and
engage in an objective reassessment.
Reservation Point
Consider, for example, an MBA student negotiating her employment terms. The MBA student
has a $90,000 job offer from Company A, plus some stock options, moving expenses, and
a signing bonus. The student is also interested in getting an offer from Company B. Thus,
Company A is her BATNA because it is a known, viable option. The question the student
should ask herself is, “What does Company B need to offer me so that I feel it is as attrac-
tive as the offer made by Company A?” The answer to this question represents her reservation
point, which includes all things relevant to the job offer, such as salary, stock options, moving
expenses, and signing bonus, as well as quality of life and feelings about the city to which she
will move. A reservation point, then, is a quantification of a negotiator’s BATNA with respect
to other alternatives.
A negotiator’s reservation point has the most direct influence on their final outcome.
When three types of information—market price, reservation price, and aspiration—were made
available to negotiators, only reservation prices drove final outcomes.16
Failure to assess reservation points can lead to two unfortunate outcomes. In some
instances, negotiators may agree to an outcome that is worse than their BATNA. In our
example, the MBA student could agree to a set of employment terms at Company B that
are actually worse for her than what Company A is offering. A second problem is that ne-
gotiators may often reject an offer that is better than their BATNA. For example, the MBA
student may reject an offer from Company B that is actually more attractive than the offer
from Company A. Although this example may seem implausible, the incidence of agreeing to
something worse than one’s BATNA and rejecting an offer better than one’s BATNA is quite
high. To avoid both of these errors, we suggest that the negotiator follow the steps outlined
in Exhibit 2-1.
Focal Points
Negotiators who make the mistake of not developing a reservation point before they negotiate
often focus on an arbitrary value that masquerades as a reservation price. Such arbitrary points
are focal points. Focal points, like anchors, are salient numbers, figures, or values that appear to
16
Blount-White, S., Valley, K., Bazerman, M., Neale, M., & Peck, S. (1994). Alternative models of price behavior in
dyadic negotiations: Market prices, reservation prices, and negotiator aspirations. Organizational Behavior and Human
Decision Processes, 57(3), 430–447.
M02_THOM9461_07_GE_C02.indd 36 23/01/21 10:32 PM

EXHIBIT 2-1
Developing a Reservation Point
Step 1: Brainstorm Your Alternatives. Suppose you want to sell your house. You have
determined your target point—in this case, $275,000. That is the easy part. The
real question is, “What is the lowest offer you will accept for your home?” This
step involves thinking about what you will do in the event that you do not get an
offer of $275,000 for your house. Perhaps you reduce the list price by $10,000
(or more), perhaps you stay in the house, or maybe you consider renting. You
should consider as many alternatives as possible. The only restriction is that the
alternatives must be feasible—that is, realistic. This requirement involves research
on your part.
Step 2: Evaluate Each Alternative. In this step, you should rank order the various
alternatives identified in step 1 in terms of their relative attractiveness, or value,
to you. If an alternative has an uncertain outcome, such as reducing the list price,
you should determine the probability a buyer will make an offer at that price.
For example, suppose that you reduce the list price to $265,000. You assess the
probability of a buyer making an offer of $265,000 for your house to be 70%,
based on recent home sale prices in the area. Your reservation price is based on
research, not hope. The best, most valuable, alternative should be selected to
represent your BATNA.
Step 3: Attempt to Improve Your BATNA. Your bargaining position can be strengthened
substantially to the extent that you have an attractive, viable BATNA. Unfortunately,
this step is the one that many negotiators fail to develop fully. To improve your
BATNA in this case, you might contact a rental company and develop your rental
options, or you may make some improvements that have high return on investment
(e.g., new paint). Of course, your most attractive BATNA is to have an offer in hand
on your house.
Step 4: Determine Your Reservation Price. Once you have determined your most attrac-
tive BATNA, it is then time to identify your reservation price—the least amount of
money you would accept for your home at the present time. Your assessment must
be based on facts. For example, you assess the probability of getting an offer on your
house of $265,000 (or higher) to be 60%, based upon recent home sales in your
area. Suppose that you assess the probability that you will get an offer of $250,000
or higher to be 95%, based upon recent sales activity in your area. You think there
is only a 5% chance that you will not get an offer of $250,000, in which case, you
would rent your house. You can use this information to assess your expected prob-
abilities of selling your house:
Reduce the price of your home to $265,000
Psale = 60%
Reduce the price of your home to $250,000
Psale = 35%
Rent the house
Prent = 5%
The probabilities represent the chances that you think your house will sell at a par-
ticular price or will have to be rented. Thus, you think that if the list price of your
house is reduced to $265,000, it is 60% likely that you will receive an offer of that
(continued )
M02_THOM9461_07_GE_C02.indd 37 23/01/21 10:32 PM

amount within 6 weeks. If you reduce the price of your home to $250,000, you
are 95% certain that you will get an offer. (Note: we write this probability as 35%
because it includes the 60% probability of receiving an offer of $265,000.) Finally,
you think you have only a 5% chance of getting an offer of $250,000 or more in the
next 6 weeks and that you will have to rent your house—a value you assess to be
worth only $100,000 to you at the present time.
Note that in our calculation, the probabilities always sum to exactly 100%,
meaning we have considered all possible events occurring. No alternative is left to
chance.
An overall value for each of these “risky” alternatives is assessed by multiplying
the value of each option by its probability of occurrence:
Value of reducing price to $265,000

= $265,000 * 0.6 = $159,000
Value of reducing price to $250,000
= $250,000 * 0.35 = $87,500
Value of renting the house
= $100,000 * 0.05 = $5,000
As a final step, we add all the values of the alternatives to arrive at an overall
evaluation:
= 0.6 ($265,000) + 0.35 ($250,000) + 0.05 ($100,000)

= $159,000 + $87,500 + $5,000 = $251,500
This value is your reservation price. It means that you should not settle for
anything less than $251,500 in the next 6 weeks.* It also means that if a buyer
were to make you an offer right now of $251,000, you would seriously consider
it because it is very close to your reservation price. Obviously, you want to get a
lot more than $251,500, but you are prepared to go as low as this amount at the
present time.
The offers you receive in the next 6 weeks can change your reservation point.
Suppose a buyer offers to pay $260,000 for the house next week. It would be your
reservation point by which to evaluate all subsequent offers.
*After 6 weeks, you may reduce the price of your home to $250,000.
be valid but have no basis in fact. A good example of the arbitrariness of focal points is provided
by an investigation in which people were asked for the last four digits of their Social Security
number.17 They were then asked whether the number of physicians in Manhattan was larger or
smaller than the number formed by those last four digits. Finally, they were asked to estimate
how many physicians were located in Manhattan. Despite the fact that it was obvious to every-
one that Social Security digits are assigned regionally and in batches, and therefore, could not
possibly be related to the number of doctors in Manhattan, a strong correlation emerged between
the digits and people’s estimates.
17
Lovallo, D., & Kahneman, D. (2003). Delusions of success: How optimism undermines executives’ decisions.
Harvard Business Review, 81(7), 56–63.
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Sunk Costs
Sunk costs are just what they sound like—money that has been invested that is, for all practical
purposes, irrecoverable. Economic theory asserts that only future costs and benefits should af-
fect decisions. However, it is difficult for people to forget the past, and they often try to recoup
sunk costs. One type of sunk cost is the purchase price that home sellers paid for their house.
Sellers and buyers in a simulated real estate negotiation were given the same Multiple Listing
Service (MLS) sheet describing a house. However, negotiators were given different information
about their previous purchase price.18 Buyers offered significantly higher amounts for a con-
dominium with larger sunk costs, indicating that the sellers’ sunk costs influenced the buyers’
behavior. Moreover, sellers’ BATNAs and final settlements were significantly lower when they
had low, as opposed to high, sunk costs. Thus, sunk costs influence not only our own behavior,
but also the behavior of the counterparty.
Target Point versus Reservation Point

It is imperative to distinguish your target point from your reservation point. Why? The negotia-
tor who lacks a well-formed reservation point risks agreeing to a settlement that is worse than
what he or she could do by following another course of action. In another case, the negotiator
may walk away from a potentially profitable deal. For example, many home sellers reject early
offers that are superior to their reservation point, only to be forced to accept an offer of less
value at a later time.
Negotiation Issues
Many negotiations appear to be about a single, salient issue—such as price or salary. Single-issue
negotiations are purely fixed-sum. By identifying other issues, negotiators can create integrative
potential. Negotiators should take time to brainstorm how a single-issue negotiation may be
segmented into multiple issues. One way to do this is by adding issues.19 For example, when
Bombardier/Airbus and Delta Airlines negotiated the purchase of 75 jets, they created a win–win
deal by also negotiating where the jets would be built. Airbus offered Delta a substantial price
discount to build the fleet of planes at their Canadian assembly plant. Because Delta had one
of the oldest fleets in the airline industry, they saw an opportunity to upgrade at a substantial
discount. When Bombardier sold a controlling stake in its C Series airplane design to Airbus, the
agreement stated that Airbus would build the jets in a new assembly plant in Mobile, Alabama.
By expanding the issue set, Delta and Airbus negotiated a mutually beneficial deal.20
Issue Alternatives
Once the negotiator has identified the issues to be negotiated, it is a good idea to identify several
alternatives for each issue. For example, in a job negotiation, there are ranges within a number of
issues: salary, vacation days, and so on. Negotiators can formalize the issues and alternatives by
18
Diekmann, K. A., Tenbrunsel, A. E., Shah, P. P., Schroth, H. A., & Bazerman, M. H. (1996). The descriptive and pre-
scriptive use of previous purchase price in negotiations. Organizational Behavior and Human Decision Processes, 66(2),
179–191.
19
Lax, D. A., & Sebenius, J. K. (1986). The manager as negotiator. New York: Free Press.
20
Mutzabaugh, B. (2017, December 14). Delta picks Airbus over Boeing for huge 100-jet order. USA Today.
usatoday.com
M02_THOM9461_07_GE_C02.indd 39 23/01/21 10:32 PM

creating a matrix in which the issues are located along the columns and the alternatives specified
along the rows.
Multi-issue Proposals
The next step of preparation is to determine a variety of different combinations of the issues that
all achieve the target or aspiration point. For example, an MBA student might identify salary,
signing bonus, and vacation days as key issues in a job negotiation. The student might then iden-
tify several packages that she could present as opening offers in the negotiation. For example, a
starting salary of $90,000, 3 weeks of vacation per year, and a signing bonus of $10,000 might
be subjectively equivalent to a starting salary of $100,000, 10 days of vacation per year, and a
signing bonus of $12,000. By identifying multiple-issue packages, negotiators expand their op-
tions. The most important aspect of identifying packages of offers is that the packages should all
be of equivalent value or attractiveness to oneself. This requires that negotiators ask themselves
some important questions about what they value and what is attractive to them.
Another benefit of identifying packages of offers is that the negotiator does not give the
counterparty the impression that he or she is positional (i.e., will not budge on any issue).21
By identifying multiple issues and multiple alternatives within each issue, a negotiator is more
likely to achieve his or her target.
Risk and Uncertainty

Suppose you are offered a choice between two options:
Option A: Receiving $5,000
Option B: Playing a game that offers a 50% chance of winning $10,000 and a 50% chance
of winning nothing
When presented with a choice between a sure thing and a gamble of equivalent value, most
people choose Option A, the sure thing. Note that the expected value of each choice is $5,000,
which would mean that negotiators should be indifferent (or risk-neutral) between the two op-
tions. However, the strong preference for Option A over B reflects a fundamental principle of
negotiator behavior: risk aversion.
Now, imagine yourself facing the following unenviable choice:
Option C: Losing $5,000 because of an unexpected expense
Option D: Playing a game that offers a 50% chance of losing nothing and a 50% chance of
losing $10,000
Most people find it difficult to choose between options C and D because both choices
are undesirable. However, when forced to make a decision, the majority of negotiators choose
Option D, even though the expected value of C and D is identical: $5,000. Option D represents
the “risky” alternative. The dominant choice of D over C reflects a fundamental principle of hu-
man psychology: risk-seeking behavior in the face of loss.
Thus, most people are risk seeking when it comes to losses, and risk averse when it
comes to gains. A reference point defines what a person considers to be a gain or a loss. Thus,
rather than weighing a course of action by its impact on total wealth, people generally “frame”
21
Fisher, R., & Ury, W. (1981). Getting to yes. Boston: Houghton Mifflin.
M02_THOM9461_07_GE_C02.indd 40 23/01/21 10:32 PM

outcomes as either “gains” or “losses” relative to some arbitrary reference point.22 What are the
implications for negotiation? Negotiators should consider the differential impact of three sources
of risk in any negotiation: strategic risk, BATNA risk, and contractual risk. 23
STRATEGIC RISK Strategic Risk refers to the riskiness of the tactics that negotiators use at the
bargaining table. Negotiators often choose between extremely cooperative tactics (e.g., informa-
tion sharing and brainstorming), and at the other extreme, competitive tactics (e.g., threats and
demands). A classic example was the risk that AOL’s David Colburn took when negotiating with
Microsoft to get the AOL icon on the Microsoft Windows start page—valuable real estate on the
computer desktop because it gave AOL access to millions of Microsoft customers who might
sign up for the online service.24 It would mean that AOL would not have to send free software to
get people to sign up because the software would already be installed on the computer. During
the negotiation, Colburn threatened to use the browser of Microsoft’s archenemy—Netscape—if
Microsoft did not agree to put the AOL icon on the Windows start page. Microsoft agreed.
BATNA RISK Many people’s BATNAs are uncertain because potential alternatives arise se-
quentially. For example, consider a student who has several interviews scheduled over the next
10 weeks, but no actual offers. The student’s BATNA is an estimate about the likelihood of
actually receiving an offer. Consider this example of a car dealer’s uncertain BATNA: “A car
dealer who decides not to make the one last concession needed to close a deal is rarely doing so
because an alternative buyer in the next room is waiting to buy the same car at a higher price.
The seller must make a conjecture about the likelihood that a more attractive offer will be made
in the near future. Rejecting an offer entails a risk that the car will remain on the lot indefinitely,
costing the dealer money, with no better offer forthcoming.” (p. 94).25
Under most circumstances, we might expect negotiators with a “gain frame” to be more
risk averse (and therefore, more concessionary) than negotiators with a “loss frame” (who
might hold out). This gain–loss basis can be a potential problem in negotiation because nego-
tiators can be “framed.” To see how, consider the following: negotiators who are instructed to
“minimize their losses” make fewer concessions, reach fewer agreements, and perceive settle-
ments to be less fair compared to those who are told to “maximize their gains.”26 In short, the
negotiators who are told to “minimize their losses” adopt more risky bargaining strategies (just
as the majority of people choose Option D over C in our previous example), preferring to hold
out for a better, but more risky settlement. In contrast, those who are told to “maximize their
gains” are more inclined to accept the sure thing (just as most people choose Option A over
B in our example). Negotiators who view the glass as “half full” are more inclined to reach
22
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2),
263–291.
23
Bottom, W. P. (1998). Negotiator risk: Sources of uncertainty and the impact of reference points on negotiated agree-
ments. Organizational Behavior and Human Decision Processes, 76(2), 89–112.
24
Klein, A. (2003, June 15). Lord of the flies. Washington Post, p. W06.
25
Bottom, “Negotiator risk.”
26
Bazerman, M. H., Magliozzi, T., & Neale, M. A. (1985). Integrative bargaining in a competitive market. Organizational
Behavior and Human Decision Processes, 35(3), 294–313; Neale, M. A., & Northcraft, G. (1986). Experts, amateurs,
and refrigerators: Comparing expert and amateur negotiators in a novel task. Organizational Behavior and Human
Decision Processes, 38, 305–317; Neale, M. A., Huber, V. L., & Northcraft, G. B. (1987). The framing of negotiations:
Contextual versus task frames. Organizational Behavior and Human Decision Processes, 39(2), 228–241; Neale &
Bazerman, Cognition and rationality in negotiation.
M02_THOM9461_07_GE_C02.indd 41 23/01/21 10:32 PM

agreement, whereas negotiators who view the glass as “half empty” are more likely to use
threats and exercise their BATNAs. If one negotiator has a negative frame and the other has a
positive frame, the negotiator with the negative frame reaps a greater share of the resources.27
In price negotiations, buyers and prevention-focused people prefer vigilant strategies, whereas
sellers and promotion-focused people prefer eager strategies.28 When there is a match between
a negotiator’s role (buyer, seller) and their strategy, the negotiator is more demanding in
the situation. A negotiator’s BATNA acts as an important reference point from which other
outcomes are evaluated. Outcomes and alternatives that fall short of one’s BATNA are viewed
as losses; outcomes that exceed a negotiator’s reservation point or BATNA are viewed as gains.
The more risk averse the negotiator, the more likely it is that she or he will make greater con-
cessions.29 Thus, given BATNAs of equal expected value, the more risk-averse negotiator will
be in a weaker bargaining position.30
Negotiators who have recently experienced a string of failures are more likely to adopt a
“loss frame” and feel less “in control” in a negotiation; conversely, negotiators who have expe-
rienced a recent string of successes feel greater control.31 Consequently, loss-framed negotiators
are reluctant to reveal information that could be used to exploit them; instead, they prefer to
manage risk by delaying outcomes.
CONTRACTUAL RISK Contractual Risk refers to the risk associated with the willingness of
the other party to honor its terms.32 For example, signing a nondisclosure agreement might lead
to collaborative relations between a manager and a company, or it could lead to an economic
loss if one party does not honor the agreement. For example, cities that are contracted to host
the Olympic Games risk budget overruns which usually lead to significant economic loss for the
host country. Indeed, when Rio de Janeiro won the bid to host the 2016 Summer Olympics, the
Brazilian government estimated costs related to hosting all the events and athletes would total
$3 billion. However, by the time of the opening ceremonies, Brazil had spent over $4.6 billion.
The 2012 London Summer Olympics projected $6.5 billion, but eventually cost almost
$20 billion. In an effort to solve this contractual risk, the Olympic organizing committee began
designing stadiums and facilities that could be disassembled and reused.33
How does contractual risk affect negotiator behavior? Under contractual risk, negotiators
with negative frames (risk seeking) are more likely to reach integrative agreements than those
with positive frames (risk averse). The reason is that pursuing high aspirations entails some
creative risk. Thus, if integrative negotiation outcomes involve “sure things,” positive frames are
more effective; however, if the integrative outcomes require negotiators to “roll the dice,” nega-
tive frames are more effective. In negotiations involving contractual risk, negotiators with a “loss
27
Bottom, W. P., & Studt, A. (1993). Framing effects and the distributive aspect of integrative bargaining. Organizational
Behavior and Human Decision Processes, 56(3), 459–474.
28
Appelt, K. C., & Higgins, E. T. (2010). My way: How strategic preferences vary by negotiator role and regulatory
focus. Journal of Experimental Social Psychology, 46(6), 1138–1142.
29
Neale, M. A., & Bazerman, M. H. (1985). The effects of framing and negotiator overconfidence on bargainer behavior.
Academy of Management Journal, 28, 34–49.
30
Crawford, V. P., & Sobel, J. (1982). Strategic information transmission. Econometrica, 50, 1431–1451.
31
Kray, L. J., Paddock, L., & Galinksy, A. D. (2008). The effect of past performance on expected control and risk at-
titudes in integrative negotiations. Negotiation and Conflict Management Research, 1(2), 161–178.
32
33
Dillow, “Hosting the Olympics is a terrible investment.”
M02_THOM9461_07_GE_C02.indd 42 23/01/21 10:32 PM

frame” are more cooperative and more likely to settle than those with a “gain frame.”34 Further,
“loss frame” negotiators create more integrative agreements.
Endowment Effects
The value of an object should be about the same, whether we are a buyer or a seller. (Note:
Buyers and sellers might want to adopt different bargaining positions for the object, but their
private valuations for the object should not differ as a consequence of who has possession of it.)
However, negotiators’ reference points may lead buyers and sellers to have different valuations
for objects. Someone who possesses an object has a reference point that reflects his or her cur-
rent endowment. When someone who owns an object considers selling it, he or she may view the
situation as a loss. The difference between what sellers demand and what buyers are willing to
pay is a manifestation of loss aversion, coupled with the rapid adaptation of the reference point.
Therefore, sellers demand more than buyers are willing to pay.
One example comes from a class of MBA students who were “endowed” with coffee mugs
worth $6, as charged by the university bookstore.35 The students who were not given a coffee
mug were told they had the opportunity to buy a mug from a student who owned one, if the
student who owned the mug valued it less. The buyers’ willingness to pay for the mug and the
sellers’ willingness to sell the mug were inferred from a series of choices (e.g., “receive $9.75”
versus “receive mug”; “receive $9.50” versus a mug”; etc.). Basic rationality predicts that about
half of the buyers will value the mug more than the seller and therefore trade will occur; simi-
larly, about half of the sellers will value the mug more than the buyer and trade will not occur.
The reference point effect, however, predicts that because of the loss-aversion behavior engen-
dered by the seller’s loss frame, trade will occur less than expected. Indeed, although 11 trades
were expected, on average, only 4 took place. Sellers demanded in excess of $8 to part with their
mugs; prospective buyers were only willing to pay list price.36
If sellers are risk seeking by virtue of their endowment, how can it be that houses, cars, furni-
ture, companies, and land are bought and sold every day? The endowment effect operates only when
the seller regards him or herself to be the owner of the object. If a seller expects to sell goods for a
profit and views the goods as currency (e.g., when MBA students are endowed with tokens rather
than coffee mugs), the endowment effect does not occur. Endowment effects prevent negotiators
from reaching agreement in negotiations; however, by changing the sequencing proposals so that the
first one is conceived as a loss and the second as a gain, the endowment effect may be mitigated.37
Buyer’s Remorse and Seller’s Regret

What determines whether we feel we did the right thing (e.g., took the right job, bought the
right house) or if we feel regret? An important component in determining whether a person ex-
periences regret is counterfactual thinking.38 Counterfactual thinking, or thinking about what
34
35
Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1990). Experimental tests of the endowment effect and the Coase
Theorem. Journal of Political Economy, 98(6), 1325–1348.
36
Kahneman, “Experimental tests.”
37
Galin, A. (2009). Proposal sequence and the endowment effect in negotiations. International Journal of Conflict
Management, 20(3), 212–227.
38
Gilovich, T. D., & Medvec, V. H. (1994). The temporal pattern to the experience of regret. Journal of Personality and
Social Psychology, 67(3), 357–365.
M02_THOM9461_07_GE_C02.indd 43 23/01/21 10:32 PM

might have been but did not occur, may be a reference point for the psychological evaluation of
actual outcomes. In negotiation, immediate acceptance of a first offer by the counterparty often
means a better outcome for the proposing negotiator; however, the outcome is distinctly less sat-
isfying.39 One of the benefits of having a first offer accepted is that it can improve preparation.
Negotiators whose first offer is accepted by the counterparty are more likely to prepare longer
for a subsequent negotiation; it also makes negotiators reluctant to make the first offer again.40
Consider feelings of regret experienced by athletes in the Olympic Games.41 Although sil-
ver medalists should feel happier than bronze medalists because their performance is objectively
superior, counterfactual reasoning might produce greater feelings of regret and disappointment
in silver medalists than in bronze. Specifically, the bronze medalist’s reference point is that of
not placing at all, so winning a medal represents a gain. In contrast, the silver medalist views
himself or herself as having just missed the gold. With the gold medal as the referent, the silver
medalist feels a loss. Indeed, videotapes of medalists’ reactions (with the audio portion turned
off) reveal that bronze medalists are perceived to be happier than silver medalists.42 Further,
silver medalists report experiencing greater feelings of regret than do bronze medalists.
Negotiator Confidence
Being confident is usually considered an admirable personality trait. And, having confidence in
oneself as a negotiator is important for success.43 Negotiators who are high in self-efficacy (i.e.,
they believe they can do well) are more successful.44
Confidence in oneself is one thing. Being overconfident about events (you cannot con-
trol) is another thing. Thus, when it comes to assessing risk and uncertainty, overconfidence
(or underconfidence) is a liability. The overconfidence effect refers to unwarranted levels of
confidence in people’s judgment of their abilities and the likelihood of positive events while
underestimating the likelihood of negative events. For example, in negotiations involving
third-party dispute resolution, negotiators on opposing sides believe the neutral third party will
adjudicate in their favor.45 Obviously, a decision favoring both parties cannot happen. Similarly,
in final-offer arbitration, wherein parties each submit their final bid to a third party who then
makes a binding decision between the two proposals, negotiators consistently overestimate the
probability that the neutral arbitrator will choose their own offer.46 Obviously, the probability is
39
Galinsky, A. D., Seiden, V., Kim, P. H., & Medvec, V. H. (2002). The dissatisfaction of having your first offer ac-
cepted: The role of counterfactual thinking in negotiations. Personality and Social Psychology Bulletin, 28(2), 271–283.
40
Galinsky, Seiden, Kim, & Medvec, “The dissatisfaction of having your first offer accepted.”
41
Medvec, V. H., Madey, S. F., & Gilovich, T. (1995). When less is more: Counterfactual thinking and satisfaction
among Olympic medalists. Journal of Personality and Social Psychology, 69(4), 603–610.
42
Medvec, Madey, & Gilovich, “When less is more: Counterfactual thinking and satisfaction among Olympic medalists.”
43
Sullivan, B. A., O’Connor, K. M., & Burris, E. R. (2003). How negotiation-related self-efficacy affects tactics and
outcomes. Paper presented at the Academy of Management Annual Meeting, Seattle, WA.
44
Volkema, R., Kapoutsis, I., & Nikolopoulous, A. (2013). Initiation behavior in negotiations: The moderating role of
motivation on the ability-intentionality relationship. Negotiation and Conflict Management Research, 6(1) 32–48.
45
Farber, H. S., & Bazerman, M. H. (1986). The general basis of arbitrator behavior: An empirical analysis of conven-
tional and final offer arbitration. Econometrica, 54, 1503–1528; Farber, H. S., & Bazerman, M. H. (1989). Divergent
expectations as a cause of disagreement in bargaining: Evidence from a comparison of arbitration schemes. Quarterly
Journal of Economics, 104, 99–120; Farber, H. S. (1981). Splitting the difference in interest arbitration. Industrial and
Labor Relations Review, 35, 70–77.
46
Neale, M. A., & Bazerman, M. H. (1983). The role of perspective taking ability in negotiating under different forms of arbi-
tration. Industrial and Labor Relations Review, 36, 378–388; Bazerman, M. H., & Neale, M. A. (1982). Improving negotiation
effectiveness under final offer arbitration: The role of selection and training. Journal of Applied Psychology, 67(5), 543–548.
M02_THOM9461_07_GE_C02.indd 44 23/01/21 10:32 PM

Another random document with
no related content on Scribd:
efficient must always, under any conceivable system of government,
be taken by the executive. It was certainly taken by the executive in
England thirty years ago; and that much in opposition to the will of
Parliament. The prominence of our President in administrative
reform furnishes no sufficient ground for attributing a singularity of
executive influence to the government of this country.
In estimating the actual powers of the President it is no doubt
best to begin, as almost all writers in England and America now
habitually begin, with a comparison between the executives of the
two kindred countries. Whilst Mr. Bagehot has done more than any
other thinker to clear up the facts of English constitutional practice,
he has also, there is reason to believe, done something toward
obscuring those facts. Everybody, for instance, has accepted as
wholly true his description of the ministry of the Crown as merely an
executive committee of the House of Commons; and yet that
description is only partially true. An English cabinet represents, not
the Commons only, but also the Crown. Indeed, it is itself ‘the
Crown.’ All executive prerogatives are prerogatives which it is within
the discretion of the cabinet itself to make free use of. The fact that it
is generally the disposition of ministers to defer to the opinion of
Parliament in the use of the prerogative, does not make that use the
less a privilege strictly beyond the sphere of direct parliamentary
control, to be exercised independently of its sanction, even secretly
on occasion, when ministers see their way clear to serving the state
thereby. “The ministry of the day,” says a perspicacious expounder of
E
the English system, “appears in Parliament, on the one hand, as
personating the Crown in the legitimate exercise of its recognized
prerogatives; and on the other hand, as the mere agent of
Parliament itself, in the discharge of the executive and administrative
functions of government cast upon them by law.” Within the province
of the prerogative “lie the stirring topics of foreign negotiations, the
management of the army and navy, public finance, and, in some
important respects, colonial administration.” Very recent English
history furnishes abundant and striking evidence of the vitality of the
prerogative in these fields in the hands of the gentlemen who
“personate the Crown” in Parliament. “No subject has been more
eagerly discussed of late,” declares Mr. Amos (page 187), “than that
of the province of Parliament in respect of the making of treaties and
the declaration of war. No prerogative of the Crown is more
undisputed than that of taking the initiative in all negotiations with
foreign governments, conducting them throughout, and finally
completing them by the signature and ratification of a treaty.... It is a
bare fact that during the progress of the British diplomatic
movements which terminated in the Treaty of Berlin of 1878, or more
properly in the Afghan war of that year,”—including the secret treaty
by which Turkey ceded Cyprus to England, and England assumed
the protectorate of Asia Minor,—“Parliament never had an
opportunity of expressing its mind on any one of the important and
complicated engagements to which the country was being
committed, or upon the policy of the war upon the northwest frontier
of India. The subjects were, indeed, over and over again discussed
in Parliament, but always subsequent to irreparable action having
been taken by the government” (page 188). Had Mr. Amos lived to
take his narrative of constitutional affairs beyond 1880, he would
have had equally significant instances of ministerial initiative to
adduce in the cases of Egypt and Burmah.
E
Mr. Sheldon Amos: Fifty Years of the English
Constitution, page 338.
The unfortunate campaign in the Soudan was the direct outcome

of the purchase of the Suez Canal shares by the British government
in 1875. The result of that purchase was that “England became
pledged in a wholly new and peculiar way to the support of the
existing Turkish and Egyptian dominion in Egypt; that large English
political interests were rendered subservient to the decisions of local
tribunals in a foreign country; and that English diplomatic and
political action in Egypt, and indeed in Europe, was trammelled, or at
least indirectly influenced, by a narrow commercial interest which
could not but weigh, however slightly, upon the apparent purity and
simplicity of the motives of the English government.” And yet the
binding engagements which involved all this were entered into
“despite the absence of all assistance from, or consent of,
F
Parliament.” Such exercises of the prerogatives of the Crown
receive additional weight from “the almost recognized right of
evolving an army of almost any size from the Indian seed-plot, of
using reserve forces without communication to Parliament in
advance, and of obtaining large votes of credit for prospective
military operations of an indefinite character, the nature of which
Parliament is allowed only dimly to surmise” (page 392). The latest
evidence of the “almost recognized” character of such rights was the
war preparations made by England against Russia in 1885. If to such
powers of committing the country irrevocably to far-reaching foreign
policies, of inviting or precipitating war, and of using Indian troops
without embarrassment from the trammels of the Mutiny Act, there
be added the great discretionary functions involved in the
administration of colonial affairs, some measure may be obtained of
the power wielded by ministers, not as the mere agents of
Parliament, but as personating the Crown. Such is in England the
independence of action possible to the executive.
F
Amos, page 384.
As compared with this, the power of the President is

insignificant. Of course, as everybody says, he is more powerful than
the sovereign of Great Britain. If relative personal power were the
principle of etiquette, Mr. Cleveland would certainly not have to lift
his hat to the Queen, because the Queen is not the English
executive. The prerogatives of the Crown are still much greater than
the prerogatives of the presidency; they are exercised, however, not
by the wearer of the crown, but by the ministry of the Crown.
As Sir Henry Maine rightly says, the framers of our Constitution,
consciously or unconsciously, made the President’s office like the
King’s office under the English constitution of their time,—the
constitution, namely, of George III., who chose his advisers with or
without the assent of Parliament. They took care, however, to pare
down the model where it seemed out of measure with the exercise of
the people’s liberty. They allowed the President to choose his
ministers freely, as George then seemed to have established his
right to do; but they made the confirmation of the Senate a
necessary condition to his appointments. They vested in him the
right of negotiating treaties with foreign governments; but he was not
to sign and ratify treaties until he had obtained the sanction of the
Senate. That oversight of executive action which Parliament had not
yet had the spirit or the inclination to exert, and which it had forfeited
its independence by not exerting, was forever secured to our federal
upper chamber by the fundamental law. The conditions of mutual
confidence and co-operation between executive and legislature now
existing in England had not then been developed, and consequently
could not be reproduced in this country. The posture and disposition
of mutual wariness which were found existing there were made
constitutional here by express written provision. In short, the
transitional relations of the Crown and Parliament of that day were
crystallized in our Constitution, such guarantees of executive good
faith and legislative participation in the weightier determinations of
government as were lacking in the model being sedulously added in
the copy.
The really subordinate position of the presidency is hidden from
view partly by that dignity which is imparted to the office by its
conspicuous place at the front of a great government, and its
security and definiteness of tenure; partly by the independence
apparently secured to it by its erection into an entirely distinct and
separate ‘branch’ of the government; and partly by those
circumstances of our history which have thrust our Presidents
forward, during one or two notable periods, as real originators of
policy and leaders in affairs. The President has never been powerful,
however, except at such times as he has had Congress at his back.
While the new government was a-making—and principally because it
was a-making—Washington and his secretaries were looked to by
Congress for guidance; and during the presidencies of several of
Washington’s immediate successors the continued prominence of
questions of foreign policy and of financial management kept the
officers of the government in a position of semi-leadership. Jackson
was masterful with or without right. He entered upon his presidency
as he entered upon his campaign in Florida, without asking too
curiously for constitutional warrant for what he was to undertake. In
the settlement of the southern question Congress went for a time on
all-fours with the President. He was powerful because Congress was
acquiescent.
But such cases prove rather the usefulness than the strength of
the presidency. Congress has, at several very grave crises in
national affairs, been seasonably supplied with an energetic leader
or agent in the person of the President. At other times, when
Congress was in earnest in pushing views not shared by the
President, our executives have either been overwhelmed, as
Johnson was, or have had to decline upon much humbler services.
Their negotiations with foreign governments are as likely to be
disapproved as approved; their budgets are cut down like a younger
son’s portion; their appointments are censured and their
administrations criticised without chance for a counter-hearing. They
create nothing. Their veto is neither revisory nor corrective. It is
merely obstructive. It is, as I have said, a simple blunt negation,
oftentimes necessarily spoken without discrimination against a good
bill because of a single bad clause in it. In such a contest between
origination and negation origination must always win, or government
must stand still.
In England the veto of the Crown has not passed out of use, as
is commonly said. It has simply changed its form. It does not exist as
an imperative, obstructive ‘No,’ uttered by the sovereign. It has
passed over into the privilege of the ministers to throw their party
weight, reinforced by their power to dissolve Parliament, against
measures of which they disapprove. It is a much-tempered
instrument, but for that reason all the more flexible and useful. The
old, blunt, antagonistic veto is no longer needed. It is needed here,
however, to preserve the presidency from the insignificance of
merely administrative functions. Since executive and legislature
cannot come into relations of mutual confidence and co-operation,
the former must be put in a position to maintain a creditable
competition for consideration and dignity.
A clear-headed, methodical, unimaginative President like Mr.
Cleveland unaffectedly recognizes the fact that all creating,
originating power rests with Congress, and that he can do no more
than direct the details of such projects as he finds commended by its
legislation. The suggestions of his message he acknowledges to be
merely suggestions, which must depend upon public opinion for their
weight. If Congress does not regard them, it must reckon with the
people, not with him. It is his duty to tell Congress what he thinks
concerning the pending questions of the day; it is not his duty to
assume any responsibility for the effect produced on Congressmen.
The English have transformed their Crown into a Ministry, and in
doing so have recognized both the supremacy of Parliament and the
rôle of leadership in legislation properly belonging to a responsible
executive. The result has been that they have kept a strong
executive without abating either the power or the independence of
the representative chamber in respect of its legislative function. We,
on the contrary, have left our executive separate, as the Constitution
made it; chiefly, it is to be suspected, because the explicit and
confident gifts of function contained in that positive instrument have
blinded us by their very positiveness to the real subordination of the
executive resulting from such a separation. We have supposed that
our President was great because his powers were specific, and that
our Congress was not supreme because it could not lay its hands
directly upon his office and turn him out. In fact, neither the dignity
and power of the executive nor the importance of Congress is served
by the arrangement. Being held off from authoritative suggestion in
legislation, the President becomes, under ordinary circumstances,
merely a ministerial officer; whilst Congress, on its part, deprived of
such leadership, becomes a legislative mass meeting instead of a
responsible co-operating member of a well-organized government.
Being under the spell of the Constitution, we have been unable to
see the facts which written documents can neither establish nor
change.
Singularly enough, there is sharp opposition to the introduction
into Congress of any such leadership on the part of the executive as
the Ministers of the Crown enjoy in Parliament, on the ground of the
increase of power which would accrue as a result to the legislature. It
is said that such a change would, by centring party and personal
responsibility in Congress, give too great a prominence to legislation;
would make Congress the object of too excited an interest on the
part of the people. Legislation in Parliament, instead of being
piecemeal, tessellated work, such as is made up in Congress of the
various fragments contributed by the standing committees, is, under
each ministry, a continuous, consistent, coherent whole; and, instead
of bearing the sanction of both national parties, is the peculiar policy
of only one of them. It is thought that, if such coherence of plan,
definiteness and continuity of aim, and sanction of party were to be
given the work of Congress, the resulting concentration of popular
interest and opinion would carry Congress over all the barriers of the
Constitution to an undisputed throne of illimitable power. In short, the
potential supremacy of Congress is thought to be kept within
bounds, not by the constitutional power of the executive and the
judiciary, its co-ordinate branches, but by the intrinsic dulness and
confusion of its own proceedings. It cannot make itself interesting
enough to be great.
But this is a two-edged argument, which one must needs handle
with great caution. It is evidently calculated to destroy every
argument constructed on the assumption that it is written laws which
are effective to the salvation of our constitutional arrangements; for it
is itself constructed on the opposite assumption, that it is the state of
popular interest in the nation which balances the forces of the
government. It would, too, serve with equal efficacy against any
scheme whatever for reforming the present methods of legislation in
Congress, with which almost everybody is dissatisfied. Any reform
which should tend to give to national legislation that uniform, open,
intelligent, and responsible character which it now lacks, would also
create that popular interest in the proceedings of Congress which, it
is said, would unhinge the Constitution. Democracy is so delicate a
form of government that it must break down if given too great facility
or efficacy of operation. No one body of men must be suffered to
utter the voice of the people, lest that voice become, through it,
directly supreme.
The fact of the overtopping power of Congress, however,
remains. The houses create all governmental policy, with that wide
latitude of ‘political discretion’ in the choice of means which the
Supreme Court unstintingly accords them. Congress has often come
into conflict with the Supreme Court by attempting to extend the
province of the federal government as against the States; but it has
seldom, I believe, been brought effectually to book for any alleged
exercise of powers as against its directly competing branch, the
executive. Having by constitutional grant the last word as to foreign
relations, the control of the finances, and even the oversight of
executive appointments, Congress exercises what powers of
direction and management it pleases, as fulfilling, not as straining,
the Constitution. Government lives in the origination, not in the
defeat, of measures of government. The President obstructs by
means of his ‘No;’ the houses govern by means of their ‘Yes.’ He has
killed some policies that are dead; they have given birth to all
policies that are alive.
But the measures born in Congress have no common lineage.
They have not even a traceable kinship. They are fathered by a
score or two of unrelated standing committees: and Congress stands
godfather to them all, without discrimination. Congress, in effect,
parcels out its great powers amongst groups of its members, and so
confuses its plans and obscures all responsibility. It is a leading
complaint of Sir Henry Maine’s against the system in England, which
is just under his nose, that it confers the preliminary shaping and the
initiation of all legislation upon the cabinet, a body which deliberates
and resolves in strict secrecy,—and so reminds him, remotely
enough, of the Spartan Ephors and the Venetian Council of Ten. He
commends, by contrast, that constitution (our own, which he sees at
a great distance) which reserves to the legislature itself the
origination and drafting of its measures. It is hard for us, who have
this commended constitution under our noses, to perceive wherein
we have the advantage. British legislation is for the most part
originated and shaped by a single committee, acting in secret,
whose proposals, when produced, are eagerly debated and freely
judged by the sovereign legislative body. Our legislation is framed
and initiated by a great many committees, deliberating in secret,
whose proposals are seldom debated and only perfunctorily judged
by the sovereign legislative body. It is impossible to mistake the
position and privileges of the Brutish cabinet, so great and
conspicuous and much discussed are they. They simplify the whole
British system for men’s comprehension by merely standing at the
centre of it. But our own system is simple only in appearance. It is
easy to see that our legislature and executive are separate, and that
the legislature matures its own measures by means of committees of
its own members. But it may readily escape superficial observation
that our legislature, instead of being served, is ruled by its
committees; that those committees prepare their measures in
private; that their number renders their privacy a secure secrecy, by
making them too many to be watched, and individually too
insignificant to be worth watching; that their division of prerogatives
results in a loss, through diffusion, of all actual responsibility; and
that their co-ordination leads to such a competition among them for
the attention of their respective houses that legislation is rushed,
when it is not paralyzed.
It is thus that, whilst all real power is in the hands of Congress,
that power is often thrown out of gear and its exercise brought
almost to a standstill. The competition of the committees is the clog.
Their reports stand in the way of each other, and so the complaint is
warranted that Congress can get nothing done. Interests which press
for attention in the nation are reported upon by the appropriate
committee, perhaps, but the report gets pushed to the wall. Or they
are not reported upon. They are brought to the notice of Congress,
but they go to a committee which is unfavorable. The progress of
legislation depends both upon the fortunes of competing reports and
upon the opinions held by particular committees.
The same system of committee government prevails in our state
legislatures, and has led to some notable results, which have
recently been pointed out in a pamphlet entitled American
Constitutions, contributed to the Johns Hopkins series of Studies in
History and Political Science by Mr. Horace Davis. In the state
legislatures, as in Congress, the origination and control of legislation
by standing committees has led to haphazard, incoherent,
irresponsible law-making, and to a universal difficulty about getting
anything done. The result has been that state legislatures have been
falling into disrepute in all quarters. They are despised and
mistrusted, and many States have revised their constitutions in order
to curtail legislative powers and limit the number and length of
legislative sessions. There is in some States an apparent inclination
to allow legislators barely time enough to provide moneys for the
maintenance of the governments. In some instances necessary
powers have been transferred from the legislatures to the courts; in
others to the governors. The intent of all such changes is manifest. It
is thought safer to entrust power to a law court, performing definite
functions under clear laws and in accordance with strict judicial
standards, or to a single conspicuous magistrate, who can be
watched and cannot escape responsibility for his official acts, than to
entrust it to a numerous body which burrows toward its ends in
committee-rooms, getting its light through lobbies; and which has a
thousand devices for juggling away responsibility, as well as scores
of antagonisms wherewith to paralyze itself.
Like fear and distrust have often been felt and expressed of late
years concerning Congress, for like reasons. But so far no attempt
has been made to restrict either the powers or the time of Congress.
Amendments to the Constitution are difficult almost to the point of
impossibility, and the few definite schemes nowadays put forward for
a revision of the Constitution involve extensions rather than
limitations of the powers of Congress. The fact is that, though often
quite as exasperating to sober public opinion as any state
legislature, Congress is neither so much distrusted nor so deserving
of distrust. Its high place and vast sphere in the government of the
nation cause its members to be more carefully chosen, and its
proceedings to be more closely watched, and frequently controlled
by criticism. The whole country has its eyes on Congress, and
Congress is aware of the fact. It has both the will and the incentive to
be judicious and patriotic. Newspaper editors have constantly to be
saying to their readers, ‘Look what our state legislators are doing;’
they seldom have to urge, ‘Look what Congress is doing.’ It cannot,
indeed, be watched easily, or to much advantage. It requires a
distinct effort to watch it. It has no dramatic contests of party leaders
to attract notice. Its methods are so much after the fashion of the
game of hide-and-seek that the eye of the ordinary man is quite
baffled in trying to understand or follow them, if he try only at leisure
moments. But, at the same time, the interests handled by Congress
are so vast that at least the newspapers and the business men, if no
others, must watch its legislation as best they may. However hard it
may be to observe, it is too influential in great affairs to make it safe
for the country to give over trying to observe it.
But though Congress may always be watched, and so in a
measure controlled, despite its clandestine and confusing methods,
those methods must tend to increase the distrust with which
Congress is widely regarded; and distrust cannot but enervate,
belittle, and corrupt this will-centre of the Constitution. The question
is not merely, How shall the methods of Congress be clarified and its
ways made purposeful and responsible? There is this greater
question at stake: How shall the essential arrangements of the
Constitution be preserved? Congress is the purposing, designing,
aggressive power of the national government. Disturbing and
demoralizing influences in the organism, if there be any, come out
from its restless energies. Damaging encroachments upon ground
forbidden to the federal government generally originate in measures
of its planning. So long as it continues to be governed by unrelated
standing committees, and to take its resolves in accordance with no
clear plan, no single, definite purpose, so long as what it does
continues to be neither evident nor interesting, so long must all its
exertions of power be invidious; so long must its competition with the
executive or the judiciary seem merely jealous and always
underhand: so long must it remain virtually impossible to control it
through public opinion. As well ask the stranger in the gallery of the
New York Stock Exchange to judge of the proceedings on the floor.
As well ask a man who has not time to read all the newspapers in
the Union to judge of passing sentiment in all parts of the country.
Congress in its composition is the country in miniature. It realizes
Hobbes’s definition of liberty as political power divided into small
fragments. The standing committees typify the individuals of the
nation. Congress is better fitted for counsel than the voters simply
because its members are less than four hundred instead of more
than ten millions.
It has been impossible to carry out the programme of the
Constitution; and, without careful reform, the national legislature will
even more dangerously approach the perilous model of a mass
meeting. There are several ways in which Congress can be so
integrated as to impart to its proceedings system and party
responsibility. That may be done by entrusting the preparation and
initiation of legislation to a single committee in each house,
composed of the leading men of the majority in that house. Such a
change would not necessarily affect the present precedents as to the
relations between the executive and the legislature. They might still
stand stiffly apart. Congress would be integrated and invigorated,
however, though the whole system of the government would not be.
To integrate that, some common meeting-ground of public
consultation must be provided for the executive and the houses.
That can be accomplished only by the admission to Congress, in
whatever capacity,—whether simply to answer proper questions and
to engage in debate, or with the full privileges of membership,—of
official representatives of the executive who understand the
administration and are interested and able to defend it. Let the
tenure of ministers have what disconnection from legislative
responsibility may seem necessary to the preservation of the
equality of House and Senate, and the separation of administration
from legislation; light would at least be thrown upon administration; it
would be given the same advantages of public suggestion and
unhampered self-defence that Congress, its competitor, has; and
Congress would be constrained to apply system and party
responsibility to its proceedings.
The establishment in the United States of what is known as
‘ministerial responsibility’ would unquestionably involve some
important changes in our constitutional system. I am strongly of the
opinion that such changes would not be too great a price to pay for
the advantages secured us by such a government. Ministerial
responsibility supplies the only conditions which have yet proved
efficacious, in the political experience of the world, for vesting
recognized leadership in men chosen for their abilities by a natural
selection of debate in a sovereign assembly of whose contests the
whole country is witness. Such survival of the ablest in debate
seems the only process available for selecting leaders under a
popular government. The mere fact that such a contest proceeds
with such a result is the strongest possible incentive to men of first-
rate powers to enter legislative service; and popular governments,
more than any other governments, need leaders so placed that, by
direct contact with both the legislative and the executive departments
of the government, they shall see the problems of government at first
hand; and so trained that they shall at the same time be, not mere
administrators, but also men of tact and eloquence, fitted to
persuade masses of men and to draw about themselves a loyal
following.
If we borrowed ministerial responsibility from England, we
should, too, unquestionably enjoy an infinite advantage over the
English in the use of it. We should sacrifice by its adoption none of
that great benefit and security which our federal system derives from
a clear enumeration of powers and an inflexible difficulty of
amendment. If anything would be definite under cabinet government,
responsibility would be definite; and, unless I am totally mistaken in
my estimate of the legal conscience of the people of this country,—
which seems to me to be the heart of our whole system,—definite
responsibility will establish rather than shake those arrangements of
our Constitution which are really our own, and to which our national
pride properly attaches, namely, the distinct division of powers
between the state and federal governments, the slow and solemn
formalities of constitutional change, and the interpretative functions
of the federal courts. If we are really attached to these principles, the
concentration of responsibility in government will doubly insure their
preservation. If we are not, they are in danger of destruction in any
case.
But we cannot have ministerial responsibility in its fulness under
the Constitution as it stands. The most that we can have is distinct
legislative responsibility, with or without any connection of co-
operation or of mutual confidence between the executive and
Congress. To have so much would be an immense gain. Changes
made to this end would leave the federal system still an unwieldy
mechanism of counteracting forces, still without unity or flexibility; but
we should at least have made the very great advance of fastening
upon Congress an even more positive form of accountability than
now rests upon the President and the courts. Questions of vast
importance and infinite delicacy have constantly to be dealt with by
Congress; and there is an evident tendency to widen the range of
those questions. The grave social and economic problems now
thrusting themselves forward, as the result of the tremendous growth
and concentration of our population, and the consequent sharp
competition for the means of livelihood, indicate that our system is
already aging, and that any clumsiness, looseness, or irresponsibility
in governmental action must prove a source of grave and increasing
peril. There are already commercial heats and political distempers in
our body politic which warn of an early necessity for carefully
prescribed physic. Under such circumstances, some measure of
legislative reform is clearly indispensable. We cannot afford to put up
any longer with such legislation as we may happen upon. We must
look and plan ahead. We must have legislation which has been
definitely forecast in party programmes and explicitly sanctioned by
the public voice. Instead of the present arrangements for
compromise, piecemeal legislation, we must have coherent plans
from recognized party leaders, and means for holding those leaders
to a faithful execution of their plans in clear-cut Acts of Congress.
LIST OF VOLUMES OF ESSAYS ON LITERATURE,
ART, MUSIC, ETC., PUBLISHED BY CHARLES SCRIBNER’S
SONS, 743–745 BROADWAY, NEW YORK.
HENRY ADAMS.
Historical Essays. (12mo, $2.00.)
Contents: Primitive Rights of Women—Captaine John Smith—
Harvard College, 1786–1787—Napoleon I. at St. Domingo—The
Bank of England Restriction—The Declaration of Paris, 1861—The
Legal Tender Act—The New York Gold Conspiracy—The Session,
1869–1870.
“Mr. Adams is thorough in research, exact in statement, judicial in tone,
broad of view, picturesque and impressive in description, nervous and
expressive in style. His characterizations are terse, pointed, clear.”—New York
Tribune.
SIR EDWIN ARNOLD.

Japonica. Illustrated by Robert Blum. (Large 8vo, $3.00.)
“Artistic and handsome. In theme, style, illustrations and manufacture, it will
appeal to every refined taste, presenting a most thoughtful and graceful study
of the fascinating people among whom the author spent a year.”—Cincinnati
Enquirer.
AUGUSTINE BIRRELL.
Obiter Dicta, First Series. (16mo, $1.00.)
Contents: Carlyle—On the Alleged Obscurity of Mr. Browning’s
Poetry—Truth Hunting—Actors—A Rogue’s Memoirs—The Via
Media—Falstaff.
“Some admirably written essays, amusing and brilliant. The book is the
book of a highly cultivated man, with a real gift of expression, a good deal of
humor, a happy fancy.”—Spectator.
Obiter Dicta, Second Series. (16mo, $1.00.)
Contents: Milton—Pope—Johnson—Burke—The Muse of
History—Lamb—Emerson—The Office of Literature—Worn Out
Types—Cambridge and the Poets—Book-buying.
“Neat, apposite, clever, full of quaint allusions, happy thoughts, and apt,
unfamiliar quotations.”—Boston Advertiser.
Res Judicatæ: Papers and Essays. (16mo, $1.00.)
“Whether Mr. Birrell writes of Richardson or Barrow, Gibbon or Newman, he
shows himself equally intelligent and appreciative. His wit and audacity are
backed by sterling sense and fine taste.”—Chicago Tribune.
Prof. H. H. BOYESEN.
Essays on German Literature. (12mo, $1.50.)
“Prof. Boyesen is cultivated without being pedantic, and serious without
being dull. The literature he analyzes and expounds is the literature that has
international value.”—Boston Beacon.
W. C. BROWNELL.
French Traits. (12mo, $1.50.)
Contents: The Social Instinct—Morality—Intelligence—Sense
and Sentiment—Manners—Women—The Art Instinct—The
Provincial Spirit—Democracy—New York after Paris.
“These chapters form a volume of criticism which is sympathetic, intelligent,
acute, and contains a great amount of wholesome suggestion.”—Boston
Advertiser.
French Art. (12mo, $1.25.)
“Brought to the judgment in this cool and scientific spirit, the whole course
of French painting and sculpture, as shown by the masters pre-eminent in each
era, is reviewed by a critic as certain of his criticisms as he is capable in
forming them.”—Springfield Republican.
THOMAS CARLYLE.
Lectures on the History of Literature. (Now printed for the
first time. 12mo, $1.00.)
Summary of Contents: Literature in General—Language,
Tradition—The Greeks—The Heroic Ages—Homer—Æschylus to
Socrates—The Romans—Middle Ages—Christianity—The Crusades
—Dante—The Spaniards—Chivalry—Cervantes—The Germans—
Luther—The Origin, Work and Destiny of the English—Shakespeare
—Milton—Swift—Hume—Wertherism—The French Revolution—
Goethe and his Works.
“Every intelligent American reader will instantly wish to read this book
through, and many will say that it is the clearest and wisest and most genuine
book that Carlyle ever produced. We could have no work from his hand which
embodies more clearly and emphatically his literary opinions than his rapid and
graphic survey of the great writers and great literary epochs of the world.”—
Boston Herald.
ALICE MORSE EARLE.

The Sabbath in Puritan New England. (12mo, $1.25.)
“She writes with a keen sense of humor, and out of the full stores of
adequate knowledge and plentiful explorations among old pamphlets, letters,
sermons, and that treasury, not yet run dry in New England, family traditions.
The book is as sympathetic as it is bright and humorous.”—The Independent.
China Collecting in America. (with 75 illustrations. Sq. 8vo,
$3.00.)
“Her book is full of entertainment, not only for the china hunter and
collector, but for all who are interested in early times and manufactures, in the
old houses and country people, in the history of America, and the habits and
customs of the past.”—New York Observer.
Customs and Fashions in Old New England. (12mo, $1.25.)
Mrs. Earle describes the daily life and habits, the festivals, larder,
taverns, modes of travel, peculiarities of courtship, marriages,
funerals, the utensils and furniture of the Puritan farm and home,
with the same wit, sympathetic feeling, and copious information so
marked in her former works.
HENRY T. FINCK.
Chopin, and Other Musical Essays. (12mo, $1.50.)
“Written from abundant knowledge: enlivened by anecdote and touches of
enthusiasm, suggestive, stimulating.”—Boston Post.
JAMES ANTHONY FROUDE.

The Spanish Story of the Armada, and Other Essays.
(12mo, $1.50.)
Contents: The Spanish Story of the Armada—Antonio Perez:
An Unsolved Historical Riddle—Saint Teresa—The Templars—The
Norway Fjords—Norway Once More.
Short Studies on Great Subjects. (Half leather, 12mo, 4
vols., each $1.50.)
CONTENTS:
Vol. I. The Science of History—Times of Erasmus and Luther—The Influence
of the Reformation on the Scottish Character—The Philosophy of Catholicism—A
Plea for the Free Discussion of Theological Difficulties—Criticism and the Gospel
History—The Book of Job—Spinoza—The Dissolution of Monasteries—England’s
Forgotten Worthies—Homer—The Lives of the Saints—Representative Man—
Reynard the Fox—The Cat’s Pilgrimage—Fables—Parable of the Bread-fruit Tree
—Compensation.
Vol. II. Calvinism—A Bishop of the Twelfth Century—Father Newman on “The
Grammar of Assent”—Conditions and Prospects of Protestantism—England and
Her Colonies—A Fortnight in Kerry—Reciprocal Duties in State and Subject—The
Merchant and His Wife—On Progress—The Colonies Once More—Education—
England’s War—The Eastern Question—Scientific Method Applied to History.
Vol. III. Annals of an English Abbey—Revival of Romanism—Sea Studies—
Society in Italy in the Last Days of the Roman Republic—Lucian—Divus Caesar—
On the Uses of a Landed Gentry—Party Politics—Leaves from a South African
Journal.
Vol. IV. The Oxford Counter—Reformation—Life and Times of Thomas Becket
—Origen and Celsus—A Cagliostro of the Second Century—Cheneys and the
House of Russell—A Siding at a Railway Station.
“All the papers here collected are marked by the qualities which have made
Mr. Froude the most popular of living English historians—by skill in
argumentative and rhetorical exposition, by felicities of diction, by contagious
earnestness, and by the rare power of fusing the results of research in the
imagination so as to produce a picture of the past at once exact and vivid.”—
N. Y. Sun.
WILLIAM EWART GLADSTONE.
Gleanings of Past Years, 1843–1879. (7 vols., 16mo, each
$1.00.)
Contents: Vol. I., The Throne and the Prince Consort. The
Cabinet and Constitution—Vol. II., Personal and Literary—Vol. III.,
Historical and Speculative—Vol. IV., Foreign—Vol. V. and VI.,
Ecclesiastical—Vol. VII., Miscellaneous.
“Not only do these essays cover a long period of time, they also exhibit a
very wide range of intellectual effort. Perhaps their most striking feature is the
breadth of genuine intellectual sympathy, of which they afford such abundant
evidence.”—Nation.
ROBERT GRANT.
The Reflections of a Married Man. (12mo, cloth, $1.00;
paper, 50 cents.)
“Nothing is more entertaining than to have one’s familiar experiences take
objective form; and few experiences are more familiar than those which Mr.
Grant here chronicles for us. Altogether Mr. Grant has given us a capital little
book, which should easily strike up literary comradeship with ‘The Reveries of a
Bachelor.’”—Boston Transcript.
Opinions of a Philosopher. (Illustrated by Reinhart and
Smedley. 12mo, cloth, $1.00.)
A sequel to the author’s “Reflections,” relating the experiences
through middle life of Fred and Josephine, with equal charm and
humor.
E. J. HARDY.
The Business of Life: A Book for Everyone.—How To Be
Happy Though Married: Being a Handbook to Marriage—The Five
Talents of Woman: A Book for Girls and Women—Manners
Makyth Man—The Sunny Days of Youth: A Book for Boys and
Young Men. (12mo, each $1.25.)
“The author has a large store of apposite quotations and anecdotes from
which he draws with a lavish hand, and he has the art of brightening his pages
with a constant play of humor that makes what he says uniformly
entertaining.”—Boston Advertiser.
W. E. HENLEY.
Views and Reviews. Essays in Appreciation: Literature. (12mo,
$1.00.)
Contents: Dickens—Thackeray—Disraëli—Dumas—Meredith
—Byron—Hugo—Heine—Arnold—Rabelais—Shakespeare—Sidney
—Walton—Banville—Berlioz—Longfellow—Balzac—Hood—Lever—
Congreve—Tolstoï—Fielding, etc., etc.
“Interesting, original, keen and felicitous. His criticism will be found
suggestive, cultivated, independent.”—N. Y. Tribune.
J. G. HOLLAND.
Titcomb’s Letters to Young People, Single and Married—
Gold-Foil, Hammered from Popular Proverbs—Lessons in
Life: A Series of Familiar Essays—Concerning the Jones Family
—Plain Talks on Familiar Subjects—Every-Day Topics, First
Series, Second Series. (Small 12mo, each, $1.25.)
“Dr. Holland will always find a congenial audience in the homes of culture
and refinement. He does not affect the play of the darker and fiercer passions,
but delights in the sweet images that cluster around the domestic hearth. He
cherishes a strong fellow-feeling with the pure and tranquil life in the modest
social circles of the American people, and has thus won his way to the
companionship of many friendly hearts.”—N. Y. Tribune.
WILLIAM RALPH INGE.

Society in Rome under the Cæsars. (12mo, $1.25.)
“Every page is brimful of interest. The picture of life in Rome under the
Cæsars are graphic and thoroughly intelligible.”—Chicago Herald.
ANDREW LANG.
Essays in Little. (Portrait, 12mo, $1.00.)

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The Mind and Heart of the Negotiator

[Global Edition] Thompson

The Mind and Heart

The Mind and Heart of the Negotiator

In addition, the seventh edition includes

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THE MIND AND HEART

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Pearson Education Limited

and Associated Companies throughout the world

Visit us on the World Wide Web at: www.pearsonglobaleditions.com

© Pearson Education Limited, 2022

ISBN 10: 1-292-39946-5

British Library Cataloguing-in-Publication Data

Cover Photo: JOKE_PHATRAPONG / Shutterstock

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PART II Negotiation Skills 105

PART III Complex Negotiations 227

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Part I Negotiation Essentials 21

Chapter 1 NEGOTIATION: THE MIND AND THE HEART 21

Chapter 2 PREPARATION: WHAT TO DO BEFORE

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Chapter 3 DISTRIBUTIVE NEGOTIATION: CLAIMING VALUE 54

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Research the Other Party’s BATNA and Estimate Their

Chapter 4 INTEGRATIVE NEGOTIATION: EXPANDING

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Strategies for Expanding the Pie 87

Part II Negotiation Skills 105

Chapter 5 UNDERSTANDING PERSONALITY AND MOTIVATION 105

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Opening Offers 115

Chapter 6 MANAGING EMOTIONS AND CONTENTIOUS

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How to Encourage Cooperation in Social Dilemmas When Parties

Chapter 7 ESTABLISHING TRUST AND BUILDING

Chapter 8 POWER, ETHICS, AND REPUTATION 181

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Sins of Omission and Commission 194

Chapter 9 CREATIVITY, PROBLEM SOLVING, AND LEARNING IN

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Easy versus Difficult to Learn 219

Part III Complex Negotiations 227

Chapter 10 MULTIPLE PARTIES, COALITIONS, AND TEAMS 227

Chapter 11 CROSS-CULTURAL NEGOTIATION 260

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Cultural Frameworks 262

Chapter 12 NEGOTIATING IN A VIRTUAL WORLD 293

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Status and Power: The “Weak Get Strong” Effect 304

Appendix 1 NEGOTIATING A JOB OFFER 315

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Assess the Interviewer’s Power to Negotiate with You 323

Appendix 2 THIRD-PARTY INTERVENTION 326

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Empowering Parties in the Negotiation Process 334

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GLOBAL EDITION ACKNOWLEDGMENTS

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