Mar 1, 2020
Does Shelter In Place make you feel like a prisoner? In game theory, the prisoner’s dilemma is a famous example of why two completely “rational” individuals fail to reach an equilibrium point (unless they figure out how to cooperate). It is a paradox in decision analysis demonstrating that when two individuals act in their own self-interests, they do not produce the optimal outcome. The typical prisoner’s dilemma is set up in such a way that both parties are encouraged to choose to protect themselves at the expense of the other participant.
The classic prisoner’s dilemma is set up as follows: Two suspects, A and B, are arrested by the police. The police have insufficient evidence for a conviction, and having separated both prisoners, visit each of them and offer the same deal: if one testifies for the prosecution against the other and the other remains silent, the silent accomplice receives the full 10-year sentence and the betrayer goes free. If both stay silent, the police can only give both prisoners 6 months for a minor charge. If both betray each other, they receive a 2-year sentence each. Each prisoner must make a choice – to betray the other, or to remain silent. However, neither prisoner knows for sure which choice the other prisoner will make. What will happen?
If reasoned from the perspective of the optimal outcome for the group (the two prisoners), the correct choice would be for both prisoners to cooperate with each other, as this would reduce the total jail time served by the group to one year total. Any other decision would be worse for the two prisoners considered together. When the prisoners both betray each other, each prisoner achieves a worse outcome than if they had cooperated
Prisoner’s Dilemma is also an example of a type of Nash Equilibrium, discussed in our February 2018 blog entry.
Take-away: In our quarantine situation (and in negotiations in general), we can achieve a better outcome for all parties by cooperating. This may mean surrendering options and behaviors that would especially benefit each of us individually. In life and in negotiation, ask yourself what your goal is: is it to “beat” the other side? Is it to optimize profits? Is it to build a relationship? Consider the ultimate goal, and assess what “cooperation” means in promoting that goal, and how to communicate it.
Jan 2, 2020
While the list of “important” ne
gotiation skills is robust, if I had to pick one above all others, it’s listening – which is both terribly important and terribly underutilized. In the early 2000’s during my initial training as faculty for the Center for Negotiation & Dispute Resolution at UC Hastings College of the Law, I learned a method for teaching Negotiation students cultivated by psychotherapist Judi MacMurray, who granted permission for us to share her methodology. This chapter of my blog is a compilation of her tutorial and my own adaptations and experience with listening over the years. Consider it a step-by-step guide – not just in negotiation, but in everyday life. Like everything else, it takes practice:
When I taught the Listening module to law students, I would start the lesson by asking for a show of hands of those who were told as a kid that they’d make a good attorney some day because they were good at talking / arguing. Invariable, several hands shot into the air. Then I would ask how may of them were told they would make a good attorney some day because they were a good listener. In all my years of teaching (in the U.S. and abroad), not a single hand was raised in response to that prompt.
According to psychotherapists, three key traits of good listeners are that they are nonjudgmental, sincere (meaning your “insides match outside”), and empathetic.
Why is this so important?
*Establishes better understanding
*Builds rapport, trust, credibility
*Information gathering: to negotiate a good deal, need to know what the other side wants and needs
*Shows respect
*If other side does not feel heard, they may shut down
*Triggers Reciprocity [see this blog – January 2019)
As Steven Covey wrote: “Seek first to understand rather than seeking to be understood” (though I don’t think he is the originator of that advice. Don’t quote me on this, but I have a vague recollection from studying the Classics at Adlai E. Stevenson High School in Prairie View, IL that this thought originates from Plato’s Republic).
And I have good news: you already know how to do it (but most likely haven’t been practicing it). This simple model is based on ordinary listening skills that you can practice everyday.
Step 1: SET AN INTENTION (to pay attention). This step has 2 parts:
(a) Choose to listen – instead of fading in and out – with a purpose of understanding what the other part is saying and what makes it important to them. This means being curious. Listen for two categories: content and emotion. This means managing distractions. (b) Pay attention. What gets in the way of this? NOISE (see step two) – not external, ambient noise, but your internal noise: errands, emails, work, a pinging phone and social media alerts, “I’m getting hungry.” Setting an intention is a VERY powerful anchor. If you don’t set an intention to listen, you won’t be listening effectively. You’ll get bits and pieces. You might get “most” of it, but you won’t get all of it.
Step 2: MANAGE YOUR “NOISE” (Noise = anything that distracts you)
“Me Too” – identification / projection
“Been There, Done that and here’s what you need to do” – Advice
“I’ll Save you!” – rescue / co-dependency
“Oh, how terrible” – sympathy (having your own feelings and wanting to express them)
“What a stupid thing to do!” or “I can’t believe she’s so upset over something like this!” –judgment
“You are wrong and I know what is right” – authority / wanting to set the speaker straight.
“Who did what to whom, when and why?” – interrogation. You ask questions you think are important and control the conversation.
“Tell me about your childhood” – analyst
“I don’t want to hear this” – censor
Paying Attention means (a) tracking the speaker and (b) tracking yourself. You can’t eliminate your noise, but you can learn to manage it. Notice the noise and then refocus on your intention to listen (This is referred to as the “LISTENING LOOP.” You will navigate this loop a few times while listening to someone for 5 minutes: set intention, focus, notice noise creeping in, manage noise, re-set intention, etc.) When you pay attention, you listen for two things: (a) content; and (b) feelings (consider feelings another category of facts). Noise pulls you away from their story and focuses on your story – e.g. thinking about what you want to say next.
Pro Tip: Being quiet while you wait for your turn to talk is not the same as listening.
Step 3: REFLECT BACK
Remaining quiet as the other person gushes, while you nod your head and then finally say, “I understand” is incomplete. How do you know you understand? How do they know you understand? Maybe you misunderstood something. Maybe their thoughts aren’t organized and they haven’t expressed a thought accurately. The job of a skilled listener could be described as helping the talker talk. By reflecting back (that is, summarizing / recapping both content and emotions), you accomplish:
*Empathy (a powerful tool in negotiation, plus dopamine secretion in the brain by the speaker, who feels “seen” in addition to heard)
*Clarification (“no, that’s not what I meant. I meant . . . ”)
*Verification (“yes, that’s right!”)
*Encouragement (which gets you even more information)
*De-escalation (and slowing down the excretion of cortisol in the brain of the speaker)
How many times have you been in a conversation where the other person repeats themselves over and over again like a broken record? Often this happens because they don’t feel they’ve been heard.
Think of your goal like this: to listen to that other person like they have never been listened to before. You concede nothing by doing this: understanding somebody does not mean you agree with them.
Recap: (1) Set Intention (to pay attention – content and feelings); (2) Manage Noise; (3) Reflection – summarize their story (facts) and emotion (why speaker cares)
Like all other negotiations skills, Listening isn’t a superpower unless you practice it and develop it like honing and toning any other muscle. I have actually been in several negotiations in my legal career where I have demonstrated listening to the party on the opposing side better than their own attorney has. And guess what that makes me?
The most powerful person in the room.
Lucia Kanter St. Amour, Pactum Factum Principal
Nov 1, 2019
Once people own something (or have a feeling of ownership) they irrationally overvalue it, regardless of its objective market value. People feel the pain of loss twice as strongly as they feel pleasure at an equal gain, and they fall in love with what they already have and prepare to pay more to retain it. For example, scientists randomly divided participants into buyers and sellers and gave the sellers coffee mugs as gifts. Then they asked the sellers for how much they would sell the mug and asked the buyers for how much they would buy it. Results showed that the sellers placed a significantly higher value on the mugs than the buyers did.
A variation of Endowment Effect is IKEA Effect: A cognitive bias in which people place a disproportionately high value on products they partially created. For example, in one study, participants who built a simple IKEA storage box themselves were willing to pay much more for the box than a group of participants who merely inspected a fully built box.
Take-away: Consider the Endowment Effect the next time you are in a sale/purchase negotiation. If you are the seller, it may be difficult for you to objectively assess offers that fall below your personalized value of your [beloved vintage car, the house where you brought home your first baby, etc.]. This is why researching objective standards and norms is so important in planning for a negotiation. If you are the buyer, being aware of endowment effect can help you communicate empathy and build rapport, while expressing the objective market fairness of your offer.
Background on our Cognitive Traps series (not our own original research): Social and cognitive psychologists have been interested for decades in how the brain processes information and what that produces in the outside world in terms of behavior. In the 1970’s, two psychologists from Stanford University (Daniel Kahneman and Amos Tversky) started to study aspects of decision-making: does the rational person made decisions based on innate cost-benefit economic analysis? Their work (called Prospect Theory) created a new discipline of science known as Behavioral Economics, which earned them the Nobel Prize in Economics in 2002 (Tversky had died in 1996, so technically the prize only went to Kahneman at the time it was bestowed). According to behavioral economics, the Rational Person theory doesn’t take into account all the reasons people behave the way they do. People make decisions relative to a reference point, and that reference point is the status quo – “where I am now.” Kahneman and Tversky categorized their work into a set of common heuristics: shortcuts that the brain takes so that it can make decisions in fast-moving everyday life. But many of these heuristics can also act as cognitive traps in a negotiation, if you aren’t aware of them. Endowment Effect is one of them.
Lucia Kanter St. Amour, Pactum Factum Principal
Aug 15, 2019
One of the most critical aspects for any negotiation is planning, which is a subject worthy of its own blog post. Part of the planning process includes assessing power and leverage of the parties who will participate in the negotiation. Power and leverage are not synonymous but are often articulated interchangeably. Who has more power in the negotiation? Who has leverage? How can that leverage be influenced?
Well, what’s the difference?
Power is the strength, ability or resources to do something or act in a particular way (subtext – a way that can also control other people or outcomes).
Leverage is having something that someone else wants or needs, and thus the ability to influence power (subtext – to impact other people or outcomes).
Consider the massive real estate developer who has successfully purchased all but one tiny home in the area designated for a client’s new medical research campus. That home is owned by a 80-year old woman (in good health, so she’s presumably not going anywhere) whose grandfather built the house, was raised there, and raised her own family there. She has communicated to the developer that there is no price they can put on that house. It’s simply not for sale. She’s just a “little old lady” and they are the big powerful developer. But she’s got the leverage.
Many of us are parents. As between us and our 3-year old child (which was many years ago now for me), we are the more powerful party. We are bigger, stronger, have a more developed brain, more experience, and better command of our fine and gross motor skills to accomplish tasks. But if you want your child to eat their peas, the child has the leverage. Sure, you can use threats and bribes which could impact future opportunities for your child (no dessert unless you eat the peas; no movie after dinner; no playdate the next day with their friend). Carrots and sticks are important tools in the parental toolbox, and can be very effective when used, particularly in combination with one another. But ultimately you cannot force the child to eat the peas. Only they can do so. They’ve got you in the cross-hairs and it’s really a test of your own temperament, behavior, and strategy as a parent how you respond. Not only might your ego be on the line (“I can’t let them win this one. I need to maintain who’s in charge”), but shaping future behaviors is also a factor to consider (“If I surrender on the peas, what am I signaling? It means I lose credibility and they will learn that they don’t have to listen to me in the future.”) Leverage is nuanced and can be a real thorn in the side of the more “powerful” party at the negotiating table when they don’t have it.
Now for the punchline: leverage can shift. Perhaps there’s a way for the real estate developer to affect conditions to change the situation (e.g. start the demolition on the properties surrounding our “little old lady,” creating conditions so intolerable that she finally caves). Perhaps you can use a third party as an influencer: that favorite uncle who your child constantly imitates happens to be visiting that evening for dinner and delightfully devours their peas, exclaiming how good and healthy and strong peas make them feel . . . causing your child to gladly eat their peas so they can be just like Uncle Mark. Another extremely important aspect of negotiation, after the planning is complete, and you are in the thick of it, is remaining agile. Often new information is presented to you through the course of the negotiation. Pay attention. Assimilating (after validating it) that new information and assessing how it impacts your options (and possibly shifts leverage) is absolutely critical. You may need to adjust your expectations or your bottom line accordingly. You may need to take a break to develop additional options or conduct more research. The point is, leverage is a key player in a negotiation – and a dynamic one.
And for an entertaining depiction of shifting leverage, watch Pirates of the Caribbean: Curse of the Black Pearl.
Lucia Kanter St. Amour, Pactum Factum Principal
Jun 1, 2019
What was really going on in the “Crazy Rich Asians” Mahjong scene (film based upon international best selling novel by Kevin Kwan), and what it can teach us about communication, rapport building, leverage (and whether to use it), negotiation, strategy, and cooperation:
As background, Watch the scene here
Read the article here
Mar 25, 2019
We live in a culture in the U.S. where people shy from negotiation. When “No Haggle” car purchasing policies were introduced some years ago, they were warmly received by consumers because of the dread of negotiating (though these policies naturally yield disproportionate economic benefit for the car dealership over the consumer). For many, negotiation is emotionally awkward and even synonymous with “conflict.” Some even consider it gauche. In general, negotiation is regarded as a specialized superpower possessed by experts, but otherwise to be avoided whenever possible.
Nonsense. Negotiation happens everyday in small, unsexy ways. We tacitly negotiate for the next open parking space at the grocery store; we negotiate with our children countless times per day (which will necessitate a blog entry on the distinction between power and leverage – ahem); we negotiate with our neighbors about fences, dogs, and noise; we negotiate with colleagues and supervisors over assignments, compensation, vacation scheduling; we negotiate with ourselves (if I go for a run before work, I can relax and watch a movie after dinner).
Perhaps some of the discomfort we have with negotiation stems from an “Us” versus “Them” win/lose paradigm, not to mention a fundamental fear of rejection (“What if they say no?” My stock answer to that is: most likely you are in no worse position than before you asked). Negotiation is like a muscle: the more you exercise it, the stronger it will be and the more you can apply it to varying situations – like the pushups that now allow you to install solar panels on your home or have more energy at the park with your family. One very effective tool to overcome the “Us” versus “Them” apprehension in negotiation is to build rapport with the other party. How do you do this and why is it important?
The How: it means adopting a genuine attitude of curiosity about other people, and slowing down the process a little. If possible, take some time in advance of the negotiation to learn what you can about that person’s background. Even if you know nothing about them, a simple, “How did you get involved with X work?” or “What brought you to this part of the country? Were you raised here?” or even the national origin of their family name . . . before jumping into the nuts and bolts of the horse trading at hand, take a few minutes to get to know them. The key here is that your focus is on learning about them, and letting them know (without so much as saying it), “I see you as a human being.” Then, pay attention to what they say in response. Smile. Show an interest. Demonstrate that you heard them with a recap: “Wow. Coming to California from the midwest seems like it was quite a culture shock. And sounds like you don’t miss the weather!” And then . . . notice if they reciprocate. Do they show an interest in you? It’s ok if they don’t, but it’s also information to keep in mind later in the negotiation.
Do: pay attention and listen (this is different from waiting quietly for your turn to talk); have a sense of humor; look for shared experiences to build upon.
Don’t: bombard them with questions and cause the person to feel interrogated. This has the opposite impact of creating trust.
The Why: Genuinely connecting with another person satisfies a basic need for people to feel that they belong. In fact, people have a stronger need to belong than they do to be “right” factually. When you show an interest in someone else’s life, attitudes, interests it is a validating and satisfying moment for them, not to mention the dopamine the brain secrets because someone is paying attention to them (much better than the dopamine “hit” through the pings supplied by social media, because it’s in the flesh!). Not only does building rapport humanize a negotiation and alleviate some of the defensive posturing characteristic of many negotiations, but it also provides a baseline of behavior for that person. That is, in a more/less relaxed state of mind while talking about a topic that is comfortable and easy for them, what was their tone of voice, volume and vocal pacing? Do they tend to gesture a lot with their hands and body? Do they stop to pause and think? Do they smile? Baseline behaviors when an individual’s defenses aren’t peaked provides a basis for comparison later in the negotiation when their words and actions deviate from the baseline. You may not know the meaning of the deviation, but noticing it may be enough to inform you it’s time for a break and to regroup.
As humans, we have a basic need to connect. We *think* we get that through screens and asynchronous moments: Skype, FaceTime, Facebook, Instagram, Twitter. But it’s an illusion. Minimal effort, knowledge or preparation are required to advance that extra step in attempting to establish rapport – and you concede nothing by doing so.
Lucia Kanter St. Amour, Pactum Factum Principal
Does Shelter In Place make you feel like a prisoner? In game theory, the prisoner’s dilemma is a famous example of why two completely “rational” individuals fail to reach an equilibrium point (unless they figure out how to cooperate). It is a paradox in decision analysis demonstrating that when two individuals act in their own self-interests, they do not produce the optimal outcome. The typical prisoner’s dilemma is set up in such a way that both parties are encouraged to choose to protect themselves at the expense of the other participant.