There is always a better deal possible for both parties in every negotiation. This may seem a bold statement but is it backed by considerable economic theory and research. About 150 years ago, Egardo Pareto, an Italian economist, theorized that any contract agreement between two individuals could be improved if the parties continued to work together to raise its value or utility. He proved, through contract utility analysis, that a gain in mutual satisfaction could be achieved at little or no loss to either party in a transaction. Subsequent economic theorists substantiated Pareto’s theory and built on his findings.
Indeed, I am convinced that anything can be done better if people collaborate in doing so. When two negotiators work together to find a better way they will succeed if not limited or impeded by organizational, structural, legal or psychological constraints.
Collaborative Both-Win® negotiation is the path to better agreements. It is within the grasp of anyone to learn. Negotiators do not have to be geniuses to be creative and find a better way.
Two factors come into play to create mutual gain; first, each side comes to the table with their own unique aggregate of assets, ideas, needs, problems, experience and relationships; second, through collaboration both sides integrate their previously unconnected mix of attributes in ways that create enlarged joint satisfaction values not previously tapped or attainable by either party individually.
For example, under the category “Needs,” such needs as power, money, growth, excitement, survival and others can be included. Each party has some inadequately fulfilled or unfulfilled needs within these needs attributes. This is also true for the other attribute categories. It is the integration and tradeoff of these attributes that paves the way for an innovative arrangement or agreement that enlarges satisfaction possibilities for both parties much as Pareto theorized.