Negotiation

When Not to Negotiate

As recently as a few weeks ago this blog noted the distinction between public and private negotiation.  Nevertheless, the current debate concerning raising the public debt “ceiling” seems to present a stark lesson on when to negotiate and when not to.

Readers will recall that the federal government can neither spend nor borrow money without congressional authorization.  Congress has authorized expenditures in excess of revenues, but there is a (putatively) serious debate about whether to authorize further borrowings to pay for those authorized expenditures.  Failure to do so would constitute a default on the nation’s debt — an eventuality that is broadly viewed as imprudent.

This situation might serve as the basis for a hypothetical in negotiation class, and feedback would be welcome on whether the following analysis is the correct one:

1.  A guy comes up to you, draws a gun, holds it to your temple, and tells you to sign this or he’ll blow your head off.  RESULT:  Negotiate

2.  A guy comes up to you, draws a gun, holds it to his own temple, and tells you to sign this or he’ll blow his own head off.  RESULT:  Don’t negotiate.

3.  A guy comes up to you, holds up a sinister-looking box, and tells you to sign this or he’ll kill you, and himself, and his kids, and your kids, and the market value of his house, and the exchange rate of the dollar, and the global financial system, and interest rates, and economic recovery.  RESULT: ???

Well, you call his bluff, don’t you?

 

2 Comments
  1. Thanks, Peter. If I, as a student in a negotiation class, were presented with your three hypotheticals, and if I was more interested in trying to be correct than in getting a good grade, then I would respond as follows:

    “1. A guy comes up to you, draws a gun, holds it to your temple, and tells you to sign this or he’ll blow your head off. RESULT:” You don’t negotiate – you sign the paper. He is negotiating, but you don’t have that option. Threats of violence may be unlawful, but they are in virtually all cases a form of negotiation and are – so long as they are credible – often a very effective one.

    “2. A guy comes up to you, draws a gun, holds it to his own temple, and tells you to sign this or he’ll blow his own head off. RESULT:” If you viewed the threat as credible (which might depend on factors such as whether he was wearing clothes), it would depend on whether the costs that you would incur if you signed were greater than the costs of trying to clean up the mess that would ensue if you did not. In addition, and unlike in the first hypothetical, audience issues come into play – you’d have to consider whether third parties might inflict costs on you if they had to deal with what you’d done.

    “3. A guy comes up to you, holds up a sinister-looking box, and tells you to sign this or he’ll kill you, and himself, and his kids, and your kids, and the market value of his house, and the exchange rate of the dollar, and the global financial system, and interest rates, and economic recovery. RESULT:” Exactly the same answer as number 2 above, except that, here, the threat would be more credible if he was speaking calmly and wearing a suit and tie, rather than standing before you wild-eyed and naked.

  2. Negotiation is a mixture of art and science. The art comes from experience – the more you negotiate, the better you become. The science lies in understanding a few basic truths about negotiations and using them to guide you in your efforts
    1. Do remember that balance is the key
    2. Do remember that there are no winners
    3. Do not appear overly eager or needy
    4. Do not take things personally
    5. Know when to say “no”
    6. Do know when it’s time to walk away

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