Business Negotiation April 04, 2013

How the Price Goes Up and Down in the Other Person's Head

People set targets in negotiation as they do in life.   They change them as success and failure is experienced...

People set targets in negotiation as they do in life.  They change them as success and failure is experienced.  A negotiation is an information system.  Targets, tentative or not, are set by buyer and seller.  Feedback then follows.  Every demand, concession, threat, delay, fact, deadline, authority limit and question has an effect of people’s expectations.  The price goes up or down in their heads with every new statement, every new fact and every gesture or body language sign.

Research in how expectations change is of special interest to those who negotiate.  This is what the studies indicate:

  1. Most people raise their expectations after a success and lower them after a failure.  Every concession can have the effect of raising the other side’s expectations.  Concessions may be perceived by the other party as a success.  Every “no” can have the opposite effect.

  2. A great success leads to a great rise in aspirations.  A mammoth failure results in a severe drop.  Never make too big a concession or give one too easily.  By raising aspirations you may drive the parties further apart rather than closer together.

  3. A mild success leads to a small rise in expectations. Small concessions, reluctantly and slowly given, are not likely to raise expectations very high.

  4. Moderate failure leads to a small fall in aspirations or none at all.  People appear to have downside resistance to small failures.  Just saying “no” once or twice may not be enough to reduce the other party’s expectations.

  5. It takes a series of extended small failures to drive expectations down.  Your low opening offer may not be enough.  It may take five or ten no’s to depress the expectations of the other party.  That’s why persistence and repeating yourself pays off.

  6. People who set targets in a group tend to set higher targets and aspire to more.


Every tactic affects the “price” in your opponent’s mind. He or  she waits anxiously on your words and actions for a signal as to whether things are going well or not.  This rise and fall of expectations affects the final outcome.

 
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