172 we have met before: Robert Cialdini has an excellent discussion of the psychological principles that underlie the “good guy/bad guy” routine. See Cialdini, Influence, pp. 186-187.
173 connection with optimistic openings: John A. Hilty and Peter Carnevale, “Black Hat/White Hat Strategy in Bilateral Negotiation,” Organizational Behavior and Human Decision Processes, Vol. 55, No. 3 (1993), pp. 444-469.
CHAPTER 10: Step 4: Closing and Gaining Commitment
175 English rhyme: Roget’s International Thesaurus (New York: Thomas Y. Crowell, 1946), p. 533.
175 Slovakian folk saying: R.G.H. Siu, Folk Wisdom and Management 3,333 Proverbs (Washington, D.C.: Manuscript, 1994), p. 73.
176 Barbarians at the Gate: Bryan Burrough and John Helyar, Barbarians at the Gate: The Fall of RJR Nabisco (New York: Harper & Row, 1990).
176 “be in this deal”: Ibid., p. 203. The authors note that Kravis denied saying “We have to be in on this deal. And we will be in this deal.”
177 tense but optimistic: The story of the fateful events of November 30, 1988 can be found in Barbarians at the Gate, pp. 474-502.
178 “Absolutely not,” says Kravis: Ibid., p. 481.
178 “one person to another”: Michael Lynn, “Scarcity Effects on Value: A Quantitative Review of the Commodity Theory Literature,” Psychology and Marketing, Vol. 8, No. 1 (Spring 1991), p. 52.
178 we missed an opportunity: Graham Loomes and Robert Sugden, “Regret Theory: An Alternative Theory of Rational Choice Under Uncertainty,” The Economic Journal, Vol. 92 (1982), pp. 805-824.
180 imposed by stiff competition: Chester Karrass, The Negotiating Game, rev. ed. (New York: HarperBusiness, 1992), pp. 20-23.
181 trademark of his style: David Johnson, “In Taj deal Trump used an old tactic,” The Philadelphia Inquirer, November 18, 1990, p. D1.
181 a family in New Orleans: Gail DeGeorge, The Making of Blockbuster (New York: John Wiley & Sons, 1996), pp. 73-74.
182 to win the contest: Burrough and Helyar, Barbarians at the Gate, pp. 482-483.
182 Psychologists call it overcommitment: Howard Garland, “Throwing Good Money After Bad: The Effect of Sunk Costs on the Decision to Escalate Commitment to an Ongoing Project,” Journal of Applied Psychology, Vol. 75, No. 6 (1990), pp. 728-731.
186 lack of balance at the beginning: One well-known professional negotiator, Bob Woolf, maintains that he never splits the difference. Instead, he treats the offer to split as an admission. The other party has told him, in effect, that it can do the deal at a point halfway between the last two offers. Interview, “How to Negotiate Practically Anything,” Inc., February 1989, p. 10.
187 out of the Korean War: Jeffrey Z. Rubin and Bert R. Brown, The Social Psychology of Bargaining and Negotiation (New York: Academic Press, 1975), p. 96. The story was originally reported in the press. See UPI, “2 Sides Sit Silently 4½ Hours at Korean Truce Meeting,” Philadelphia Evening Bulletin, April 11, 1969, p. 10. I take my spelling of General Yi’s name, which appears in several different forms in news reports, from the New York Times. See “U.S., at Meeting in Korea, Protests Downing of Plane,” New York Times, April 18, 1969, p. A1.
188 return to the table: William Ury has an entire book on this subject. See William Ury, Getting Past No (New York: Bantam, 1991), pp. 105-129.
189 up between the parties: Murrary Chass, “The National Pastime’s True Most Valuable Player,” The New York Times, November 28, 1996, p. B23.
189 can work in private: Moving the parties to a private location where they can work on an agreement without having to answer to constituents is especially useful in international relations. See Clyde Haberman, “How the Oslo Connection Led to the Mideast Peace,” The New York Times, September 5, 1993, p. A1.
189 then wait for reciprocation: This process has been confirmed experimentally. See S. S. Komorita and James K. Esser, “Frequency of Reciprocated Concessions in Bargaining,” Journal of Personality and Social Psychology, Vol. 32, No. 4 (1975), pp. 699-705.
189 Initiatives in Tension Reduction: Charles E. Osgood, An Alternative to War or Surrender (Urbana, Ill.: University of Illinois Press, 1962), pp. 85-134.
190 Sinai Peninsula to Egypt: Howard Raiffa provides an excellent discussion of the Camp David accords as an example of assisted negotiation. See Howard Raiffa, The Art and Science of Negotiation (Cambridge, Mass.: Harvard University Press, 1982), p. 205.
190 compared with available alternatives: William P. Bottom and Amy Studt, “Framing Effects and the Distributive Aspect of Integrative Bargaining,” Organizational Behavior and Human Decision Processes, Vol. 56, No. 3 (1993), pp. 459-474.
191 backed out of the deal: Patrick McGeehan, “Morgan Stanley, Dean Witter Have Big Breakup Fee,” The Wall Street Journal, February 18, 1997, p. B12.
191 that $8.3 million figure: Bob Woolf, Friendly Persuasion: How to Negotiate and Win (New York: Berkley Books, 1990), pp. 19-22.
CHAPTER 11: Bargaining with the Devil Without Losing Your Soul: Ethics in Negotiation
196 Anacharsis (600 B.C.): Roget’s International Thesaurus (New York: Thomas Y. Crowell, 1946), p. 548.
196 O’Loughlin, Allstate Insurance Company: Mr. O’Loughlin was a senior vice president at Allstate Insurance Company at the time he was quoted as saying this. See Bruce Horovitz, “When Should an Executive Lie?,” Industry Week, November 16, 1981, p. 87.
196 a Philadelphia newspaper columnist: Darrell Sifford, “Mastering the Fine Art of Negotiation,” Philadelphia Inquirer, June 30, 1991, p. 11.
198 life in every culture: Sissela Bok calls white lies “the most common and the most trivial forms that duplicity can take.” Sissela Bok, Lying: Moral Choice in Public and Private Life (New York : Vintage, 1978), p. 60. Some interesting research on “everyday” lying is reported in two articles. See Bella M. DePaulo, Deborah A. Kashy, Susan E. Kirkendol, Melissa M. Wyer, and Jennifer A. Epstein, “Lying in Everyday Life,” Journal of Personality and Social Psychology, Vol. 70, No. 5 (1996), pp. 979-995; Deborah A. Kashy and Bella M. DePaulo, “Who Lies?,” Journal of Personality and Social Psychology, Vol. 70, No. 5 (1996), pp. 1037-1051. Curiously, the strongest predictor of whether a person was likely to lie a lot was whether he or she had high-quality same-sex relationships. As the researchers put it, “People who described their same-sex relationships as warm, enduring, and satisfying told fewer lies overall, and especially fewer self-centered lies, than people who described their same-sex relationships in less glowing terms.
198 return for concrete concessions: Robert J. Robinson, Roy J. Lewicki, and Eileen M. Donohue, “Extending and Testing a Five Factor Model of Ethical and Unethical Bargaining Tactics: Introducing the SINS Scale,” Journal of Organizational Behavior (1998).
199 a major motivational objective: Gerald R. Williams, Legal Negotiation and Settlement (St. Paul, Minn.: West Publishing, 1983), p. 19.
199 interviews are “persistent liars”: Bruce Horowitz, “When Should an Executive Lie?,” Industry Week, November 16, 1981, pp. 81-87.
199 “engage in ethical behavior”: James J. White, “The Pros and Cons of ‘Getting to Yes,’” Journal of Legal Education, Vol. 34 (1984), pp. 115-124, quote on p. 118. Business ethicist and economist Robert H. Frank of Cornell University echoes White’s analysis when he says, “The art of bargaining, as most of us eventually learn, is in large part the art of sending misleading messages about [reservation prices] .” See Robert H. Frank, Passions Within Reason (New York: W. W. Norton, 1988), p. 165.
200 traits of a skilled negotiator: Chester Karrass, The Negotiating Game, rev. ed. (New York: HarperBusiness, 1992), pp. 242-243; Howard Raiffa, The Art and Science of Negotiation (Cambridge, Mass.: Harvard University Press, 1982), pp. 120-121.
201 regulate the negotiation process: Much of the following discussion comes from an article I wrote in 1991. See G. Richard Shell, “When Is It Legal to Lie in Negotiations?,” Sloan Management Review, Vol. 32 (1991), pp. 93-101.
201 negotiation of commercial agre
ements: The Uniform Commercial Code states that the general duty of good faith applies only to the performance and enforcement of agreements, not their negotiation. See Uniform Commercial Code § 1-203. See also Restatement (Second) of Contracts § 205 (1981), comment c (“Bad faith in negotiation” is not “within the scope of this Section”). Ibid., § 205, comment c.
201 “‘bad faith’ in negotiations”: Feldman v. Allegheny Intn’l, Inc., 850 F. 2d 1217, 1223 (7th Cir., 1988).
201 relies (6) causing damages: W. Page Keeton, Dan B. Dobbs, Robert E. Keeton, and David G. Owen, Prosser and Keeton on the Law of Torts (St. Paul, Minn.: West Publishing, 1984), p. 728.
204 infestation in her home: Miles v. McSwegin, 388 N.E. 2d 1367 (Ohio, 1979).
204 negotiating to purchase it: Zaschak v. Traverse Corp., 333 N.W. 2d 191 (Mich. Appl., 1983).
204 preferring the term “bluffs”: Robert A. Wenke, The Art of Negotiation for Lawyers (New York: Law Distributors, 1985), p. 33. For a summary of research on ethical attitudes about bluffing and other traditional “competitive bargaining” behavior, see Roy J. Lewicki, Joseph A. Litterer, John W. Minton, and David M. Saunders, Negotiation, 2nd ed. (Burr Ridge, Ill.: Irwin, 1994), pp. 392-398.
205 to their expressed preferences: John G. Cross, The Economics of Bargaining (New York: Basic Books, 1969), pp. 166-179 (exaggerated demands make it possible to engage in cooperative process of mutual concession making); P. H. Gulliver, Disputes and Negotiation: A Cross-Cultural Perspective (New York: Academic Press, 1979), pp. 135-141 (exaggerated demands set legitimate boundaries of dispute); Thomas Schelling, The Strategy of Conflict (New York: Oxford University Press, 1963), pp. 22-28 (strength of commitment is key to success in using misleading statements about reservation price to capture larger share of bargaining surplus).
205 to a third person: American Bar Association, Model Rules of Professional Conduct , Rule 4.1 (a) official comment (1983).
205 legal case from Massachusetts: Kabatchnick v. Hanover-Elm Bldg. Corp., 103 N.E. 2d 692 (Mass., 1952).
205 later that same day: Beavers v. Lamplighters Realty, Inc., 556 P. 2d 1328 (Okla. Appl., 1976).
206 “state of his digestion”: Edgington v. Fitzmaurice, L. R. 29 Ch. Div. 359 (1885).
207 intention was “material”: A particularly vivid example of this sort of conduct was litigated in Markov v. ABC Transfer & Storage Co., 457 P. 2d 535 (Wash., 1969). See also Gibraltar Savings v. LDBrinkman Corp., 860 F. 2d 1275 (5th Cir., 1988) (debtor’s promise to creditor to keep holding company solvent when plans were under way to dissolve holding company deemed fraudulent, resulting in $6 million verdict).
207 from his largest customer: Alio v. Saponaro, 520 N.Y.S. 2d 245 (A.D., 1987).
207 to sell their discoveries: Smith v. Snap-on Tools Corp., 833 F. 2d 578 (5th Cir., 1988) (no liability when inventor made a gift of invention to the company); Smith v. Dravo Corp., 203 F. 2d 369 (7th Cir., 1953) (liability when inventor intended negotiations to lead to sale of trade secret).
208 the final written contract: Turner v. Johnson & Johnson, 809 F. 2d 90 (1st Cir., 1986).
209 approach others as equals: See Geoffrey M. Peter, “The Use of Lies in Negotiation,” Ohio State Law Journal, Vol. 48, No. 1 (1987), pp. 1-50.
210 “much money or power”: Albert Z. Carr, “Is Business Bluffing Ethical?,” Harvard Business Review, Vol. 46 (1968), pp. 143-153. One modern follower of the Poker School might be former California real estate mogul and successful negotiation entrepreneur Roger Dawson, who teaches people to become “Power Negotiators.” Dawson specializes in teaching “gambits,” telling people that one of the secrets of success is “to think of negotiating as a game.” See Roger Dawson, Roger Dawson’s Secrets of Power Negotiating (Hawthorne, N.J.: Career Press, 1995), p. 94.
210 person successfully deceived them: Carr, “Is Business Bluffing Ethical?,” p. 145.
212 conduct is therefore unethical: Immanuel Kant, Foundations of the Metaphysics of Morals, L. W. Beck, trans. (New York: Liberal Arts Press, 1959).
213 bluffs about bottom lines: J. Gregory Dees and Peter C. Cramton, “Shrewd Bargaining on the Moral Frontier: Toward a Theory of Morality in Practice,” Business Ethics Quarterly, Vol. 1, No. 2 (1991), pp. 135-167. Also see Alan Strudler, “On the Ethics of Deception in Negotiation,” Business Ethics Quarterly, Vol. 5, No. 4 (1995), pp. 805-822.
213 as an ethical option: Scholars have hypothesized that a corrupt work environment can lead otherwise good people to engage in unethical conduct. Daniel J. Brass, Kenneth D. Butterfield, and Bruce C. Skaggs, “Relationships and Unethical Behavior: A Social Network Perspective,” Academy of Management Review, Vol. 23 (1998), pp. 14-31. In addition, there is empirical support for the idea that people tend to orient toward goals supported by the institutions in which they live and work. Tim Kasser, “Aspirations and Well-being in a Prison Setting,” Journal of Applied Social Psychology, Vol. 26 (1996), pp. 1367-1377.
217 daughter a used car: Dale Singer, “I’ve Kicked the Tires. Now I’ll Kick Myself,” The New York Times, February 2, 1997, p. F14.
218 a hidden psychological premise: Robert B. Cialdini, John T. Cacioppo, Rodney Bassett, and John A. Miller, “Low-Ball Procedure for Producing Compliance: Commitment Then Cost,” Journal of Personality and Social Psychology, Vol. 36, No. 5 (1978), pp. 463-476. Under the lowball procedure, a salesman induces a customer to make an active decision to buy one specific car by offering an extremely good price. The salesman then uses one of several devices to remove the low price, including “checking with the boss,” who overrules the salesman’s offer. Other techniques include lowering the trade-in allowance, threatening to leave out standard features such as the radio or air-conditioning, and so on. Consumer groups have identified and condemned the practice for decades. See, for example, Consumer Reports, Vol. 39 (May 1974), p. 368.
219 real estate market: 1997: Tracey Rozan, “A Hot Market Leads to Cold-Blooded Dealing,” The New York Times, May 25, 1997, Sec. 9, p. 1.
220 “with the latter’s demands”: Frank J. Monteverde, Richard Paschke, and James T. Tedeschi, “The Effectiveness of Honesty and Deceit as Influence Tactics,” Sociometry, Vol. 37, No. 4 (1974), pp. 583-591. A similar study found that “the disadvantaged player in a bargaining game lied more often than his more powerful opponent and gained better bargaining outcomes as a consequence.” See C. S. Fischer, “The Effect of Threats in an Incomplete Information Game,” Sociometry, Vol. 32 (1969), pp. 301-314.
220 “using less ethical tactics”: Roy J. Lewicki, Joseph A. Litterer, John W. Minton, and David M. Saunders, Negotiation, 2d ed. (Burr Ridge, Ill.: Ir win, 1994), p. 402.
221 “willing to use them”: Ibid., p. 401. People who expect a short-term relationship are more likely to see ethically questionable behavior as acceptable than are those who foresee a long-term relationship. They are also more likely to anticipate unethical conduct from others and to use questionable tactics as a defense strategy themselves.
221 lies have been told: Peter J. DePaulo and Bella M. DePaulo, “Can Deception by Salespersons and Customers Be Detected Through Nonverbal Behavioral Cues?,” Journal of Applied Social Psychology, Vol. 19, No. 18 (1989), pp. 1552-1577.
221 “to interpret their speeches”: Michael Kiernan, ed., Sir Francis Bacon, The Essays of Counsels, Civill and Morall (Cambridge, Mass.: Harvard University Press, 1985), pp. 145-147.
221 draw a firm conclusion: Recent studies on lie detecting have suggested that only specialists, such as Secret Service personnel, are good at detecting liars. See, for example, Paul Ekman and Maureen O’Sullivan, “Who Can Catch a Liar?” American Psychologist, Vol. 46 (1991), pp. 913-920. Other researchers claim that average people can outperform chance, at least when it comes to telling that “something fishy is going on.” Bella M. DePaulo and Robert Rosenthal, “Telling Lies,” Journal of Personality and Social Psychology, Vol. 37, No. 10 (1979), pp. 1713-1722; Richard A. Maier and Paul J. Lavrakas, “Lying Behavior and Evaluation of Lies,” Perceptual and Moto
r Skills, Vol. 42 (1976), pp. 575-581. Even these studies reveal that people are not very good at determining what people are covering up—only that they are covering something up.
224 “Red Herring” technique: Dawson, Roger Dawson’s Secrets of Power Negotiating , pp. 94-100.
224 Sony’s new movie division: Nancy Griffin and Kim Masters, Hit and Run: How Jon Peters and Peter Guber Took Sony for a Ride in Hollywood (New York: Simon & Schuster, 1996), pp. 233-251.
225 to obtain their release: Actually, the timing turned out not to matter. Steve Ross refused to give Guber and Peters a release, sued Sony for $1 billion for inducing a breach of contract between Warner and Guber-Peters Entertainment, and won a handsome settlement.
CHAPTER 12: Conclusion: On Becoming an Effective Negotiator
229 Pashto folk saying: R.G.H. Siu, Folk Wisdom and Management 3,333 Proverbs (Washington, D.C.: Manuscript, 1994), p. 81. The Pashto language is spoken in a remote part of Pakistan and originated in Central Asia.
229 Robert Louis Stevenson: Roget’s International Thesaurus (New York: Thomas Y. Crowell, 1946), p. 546.
233 agents for others’ interests: James A. Breaugh and Richard J. Klimoski, “Social Forces in Negotiation Simulations,” Personality and Social Psychology Bulletin, Vol. 7, No. 2 (1981), pp. 290-295 (finding that people bargained harder on behalf of a group of which they were a part than if they were merely “hired guns” who acted as bargaining agents). In general, agents tend to assert goals more aggressively than do people bargaining on their own behalf. See Max H. Bazerman, Margaret A. Neale, Kathleen L.Valley, Edward J. Zajac, and Yong Min Kim, “The Effect of Agents and Mediators on Negotiation Outcomes,” Organizational Behavior and Human Decision Processes, Vol. 53, No. 1 (1992), pp. 55-73.
233 people are watching them: Peter J. D. Carnevale, Dean G. Pruitt, and Scott D. Britton, “Looking Tough: The Negotiator Under Constituent Surveillance,” Personality and Social Psychology Bulletin, Vol. 5, No. 1 (1979), pp. 118-121.
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