The Stoic Negotiator™

“You can apply pressure in the direction where you want people to go, or you can ask a very different question, which is: Why aren’t they going there by themselves?” —Daniel Kahneman

Speaking on a March 2019 podcast with Sam Harris, professor, best-selling author, and Nobel Prize-winning economist and psychologist Kahneman discusses a key idea in behavioral psychology that is highly relevant in negotiation and mediation settings. There are two essential ways of changing human behavior. On the one hand, you can apply pressure, including promises, threats, and arguments; on the other, you can make choices easier for people by removing obstacles, conflict, and stress.

Kahneman, referencing social psychology pioneer Kurt Lewin, observes that when you make it easier for people to do the right thing they are more likely to, perhaps even effortlessly and without conflict. Kahneman notes that pressure creates conflict, and removing obstacles diminishes conflict, reduces stress, and generally makes things easier for people. Kahneman lauds the basic, albeit non-intuitive, psychological rule that if you want people to behave in a certain way, you make it easy for them. This is the best way to effect change.

The distinction between applying pressure and removing obstacles to make behavior easy can be seen, for example, in the difference between “opt-in” and “opt-out” organ donation choices people make on drivers’ license applications. Since it takes less effort to opt out than to opt in, people will tend to follow the path of least resistance and be more likely to donate organs if they can do so without having to make an affirmative election.

And why is all of this important to mediators and negotiators?  It implicates another idea central to behavioral economics Kahneman has studied extensively and, as he put it: “You should choose the frame that leads to the better decision and to the better outcome.”

Polished negotiators and mediators know this “framing” principle, understand it well, and use it to guide them in resolving conflict. Frame your proposals in the way that makes it easiest for the recipients to act in the way you would like them to. Instead of asking yourself how you can pressure – or even incentivize – your counterpart to act, consider why they aren’t going there themselves. When you have an answer to that question, remove the obstacles you reasonably can and give the other side an easy choice.

If you are unaware of how framing impacts decision-making, you become vulnerable to cognitive biases that can steer us to sub-optimal choices. Of course, being conscious of framing and other heuristics doesn’t immunize us from making cognitive errors, as Kahneman is quick to acknowledge, but we should at least be aware of those predictable tricks our minds want to play on us.

“You can tell the character of every man when you see how he gives and receives praise.”

—Seneca

Last week at a mediation, the opposing attorneys began by introducing themselves.

“I’ve heard so many great things about you,” Attorney #1 remarked genuinely to the opposing counsel, Attorney #2. “My law partner says you’re always reasonable, easy to work with, and fair in negotiations.”

Those two, simple, sincere lines set a tone for our mediation that carried us through to a successful resolution, even though the underlying case was factually and legally complex.

Imagine yourself, as Attorney #2, receiving those kind opening words to start a negotiation session. How would you feel? How would you respond? More importantly, how would you conduct yourself over the course of the mediation?

Most people would be flattered, and then perhaps respond with a thank-you, a reciprocal compliment, or both.

More importantly, you’d likely also be struck by a strong desire to fulfill the speaker’s expectations. Knowing that your negotiating colleague holds you in high regard, you would — more than ever — want to conduct business in a manner consistent with your reputation. You’ll want to be, in fact, reasonable, easy to work with, and fair.

In our example, whether he knew it or not, Attorney #1 was using the theory of cognitive dissonance to his advantage.

Basically, the theory is that people don’t like to hold clashing, inconsistent beliefs. We aren’t comfortable when our thoughts or behaviors conflict with each other. To relieve this discomfort — the cognitive dissonance — we try to find ways to ensure that our thinking and actions are consistent and balance is restored.

So when a negotiator like Attorney #1 starts a discussion by earnestly highlighting his counterpart’s reasonableness, collegiality, and fairness, several good things happen. First, the negotiating parties will tend to like each other more and build rapport and trust between them.

A discussion of this nature also sets the tone for the parties’ actual conduct. In a sense, Attorney #1 establishes expectations for Attorney #2’s behavior, and Attorney #2 will, naturally, want to behave consistently with the descriptors. If Attorney #2 were to negotiate unreasonably or unfairly, for example, that action would create cognitive dissonance in her mind. To avoid that scenario, most likely, Attorney #2 will be especially attentive and want to make sure she lives up to her stellar reputation.

Delivering genuine compliments costs the deliverer nothing but frequently opens up a path to collaborative negotiating. It seems such a basic point. But besides simply making the recipient feel good and generating reciprocal positive feelings, compliments can even, building on our aversion to cognitive dissonance, subtly establish negotiation norms that help tremendously towards resolving conflict.

“Acquire the habit of attending carefully to what is being said by another, and of entering, so far as possible, into the mind of the speaker.”

—Marcus Aurelius

“So you understand what the other side is asking for, and why, right?” I asked the defense attorney as we started our mediation.

“Nah. We don’t really care about that, and we’re basically disregarding it,” he said. “We’re looking at this case much differently, and our offers will reflect that.”

And so it began.

Shortly thereafter, defense counsel made an initial offer that was approximately 1% of the plaintiff’s initial demand. Nearly three hours later, not surprisingly, the parties adjourned the mediation without an agreement. I’m a good mediator, but I don’t work miracles.

The defense attorney’s attitude reflects a most basic, but all-too-common, deficiency of poor negotiators. How can you enter a negotiation not caring about the other side’s perspective? When seeking consensus, why would you be indifferent to what another person — the other person upon whom agreement depends — considers important?

To the contrary, gaining an understanding of the other side should be one of your primary goals.

Marcus Aurelius’ words above are among the most important to anyone seeking to resolve conflict with another person. “Entering the mind of the speaker” is a skill that nearly all top-notch negotiators and conflict-resolvers possess.

Before defending your position or striking back at your counterpart, take the time to digest the opposing perspective.

An appreciation of the other side’s priorities, and seeking to view a challenge from your opposition’s shoes, will always serve you well. Besides giving the other person the gift of attention and understanding, acknowledging the other side can unlock new ways of looking at conflict and discovering more creative, mutually agreeable resolutions.

Suppose you’re offered a bet based on a single coin flip: If it’s tails, you lose $100. Now, to make this gamble worthwhile, how much would you have to stand to gain if the coin were to come up heads?

Think about it for a few seconds.

According to studies of renowned behavioral scientists Daniel Kahneman and Amos Tversky, noted for their scholarship related to cognitive biases, most people would require at least $200 for a winning flip. But why? If the odds of winning or losing a coin toss are 50-50, why wouldn’t we accept the possibility of winning $101, or $150?

The answer is rooted in our tendency towards loss aversion and the prospect theory Kahneman and Tversky developed. Their research suggests that most people feel the sting of loss more intensely than the satisfaction of gain, so that they’d require the possibility of winning $200 to offset potentially losing $100.

So why wouldn’t we rationally accept a coin-flip wager where a loss would cost us $100 but a win would give us $101 or $150? In short, we hate losing more than we like winning. That is, it’s better to not lose $100 than to win $100.

This concept, called loss aversion, is an important psychological principle that skilled negotiators can use to their advantage. On the flip side (yes, a pun), if you’re not careful, loss aversion can cause us to fall for sunk cost and similar logical fallacies that lead to suboptimal decision-making.

The bias of loss aversion can impact our negotiations in various ways. For example, is it rational to refuse a negotiated offer – say, a dollar amount to settle a lawsuit – because, though not a bad deal, it is below your stated “bottom line” and you can’t bear taking a “loss”? Surely not. You might find it difficult to walk away from a lawsuit unless you receive an offer with a significantly higher expected value, even though your reluctance could mean making an illogical decision and leaving money on the table.

We hate to lose more than we like to win.

How would you feel about selling a stock or, say, your house, for less than what you paid, even if the proposed deal reflects current market conditions and an objectively reasonable offer? And have you ever noticed that it’s harder to give up a product or service after using it for a trial period? If so, your instinct to keep the product might be driven largely by your desire to avoid a loss.

Most every negotiation decision involves a trade-off: Each side has to give up something to get something else. Thus, the extent to which a proposal is framed as an avoidance of loss, or rather as a potential gain, can greatly influence how it is perceived and evaluated.

The Stoic Negotiator™ is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

“Don't be a jerk. Try to love everyone. Give more than you take. And do it despite the fact that you only really like about 7 out of 500 people.”

—Judd Apatow

Although for some it’s counterintuitive, a reputation as a “generous” negotiating partner can serve you well as you go through life, personally and professionally. The more others view you as a collaborator in the negotiation process, the more apt they are to help you and work toward common resolution goals. There are several things at play here, which you’ll notice in mediation and less formal negotiation settings, that are deep-seated in human nature.

·      Negotiators are more apt to help people they like than people they don’t like, and people seek out a sense of “fairness” at the bargaining table.

·      Whether it’s out of a feeling of obligation or reciprocity, we generally like equilibrium and balance.

·      Your reputation as a net “giver” or a “taker” will quickly precede you, and whether in the future you work with the same people or just with people aware of your reputation – which tends to spread more quickly and widely than you might think – how others perceive your style can have a direct impact on your chances of success or failure down the road.

“Be hard on the problem, soft on the people.”

— Fisher and Ury, Getting to Yes

As we’ve discussed elsewhere, in negotiation settings, focusing on the objective issues in dispute, rather than getting bogged down in personal attacks and one-sided arguments, often leads to effective dialogue. Effective dialogue, in turn, leads to mutual understanding and, ideally, ultimate resolution.

Though discussions grounded in fact and objectivity are preferable to those featuring ad hominem insults and baseless critique, negotiation is a quintessentially human exchange. It’s always important to understand the other side’s perspective in a disagreement, both in your search for “truth” and in order to persuade your counterpart. Even if you’re 100% correct about an objective, provable fact, that’s not always enough to win an argument or convince someone to see things your way.

Sometimes a conflict’s resolution has absolutely nothing to do with substantive issues and everything to do with effectively managing “soft skills” and what might appear to be non-objective details.

It can be tempting to – and you should – come into a mediation or negotiation with hard numbers, financial calculations, and cogent arguments that you think prove an objectively “correct” result. However, remember that how you package your analysis and frame your proposals can also be determinant.

* Do some people respond better to being asked to do something, as opposed to being told to do it?

* Are you more inclined to do something for someone you like or someone who’s threatened and antagonized you?

* Might some of us respond to a request less favorably, say, on a dreary Monday morning before our first cup of coffee, than we might on a Thursday afternoon before a long, holiday weekend?

* Are you more willing to listen to someone who has first taken the time to empathize with and listen to you?

* Can an artful negotiator frame an idea or request in such a way that the other person doesn’t even realize a request is being made?

Surely. Absolutely.

Questions like these are endless, and certainly it helps to know the tendencies and preferences of your negotiating partner when devising your approach. As a mediator, I spend a tremendous amount of time guiding parties as to what “packaging” of a proposal might be best received. My suggestions depend on a range of factors dictated by the particular situation and personalities involved in the underlying dispute.

When seeking to resolve a conflict: Be prepared to address the problem, aim for a mutual understanding of any substantive disagreements, and then try to anticipate those factors — beyond the facts and figures — that matter most to an effective resolution.

One of Seinfeld TV-series character George Costanza’s most memorable endeavors was his attempt, in famous episode, “The Opposite,” to do the opposite of his every natural tendency. Lamenting his undeniable pattern of poor life choices and unsatisfying results, George’s pal Jerry urged him to change his hard-luck ways using this logic: “If every instinct you have is wrong, then the opposite would have to be right.”

A variant of George’s “do the opposite” approach can be a useful tool in negotiation and mediation settings, too. How? It can help you combat common cognitive biases that infect our sound analysis and thinking, and thus allow you to become a more effective negotiator.  

Considering the opposite of your negotiation position helps fight the common tendency to overvalue our own viewpoints and undervalue opposing views. Labels such as “confirmation bias” and the “ostrich effect,” among others, can be used to describe our predispositions to listen to only the information that confirms our positions and to disregard negative or conflicting information. As Thinking, Fast and Slow researchers Kahneman and Tversky have comprehensively described, we seek out and selectively interpret information in a manner that confirms our beliefs, and we proverbially stick our heads in the sand and pretend that potentially damaging information does not exist.

Effective negotiators thoroughly understand their best and worst alternatives to negotiated agreements. To reach that understanding they must be able to view their disputes objectively and appreciate both the positive and negative aspects of their bargaining positions. A “devil’s advocate” exercise – essentially, arguing the other side of your case – helps us move beyond a propensity to misjudge the relative weight of our side’s strengths and weaknesses.

Instead of allowing ourselves to dig in to our positions at the expense of considering other information and probabilities, and using George Costanza’s “do the opposite” as a guide, we can aim to view our dispute from perspectives other than our own. This enables us to empathize with our counterparts, giving us a better understanding of why they think and feel as they do, which is critical to effective dispute resolution.

If you are able to see the opposite side of your disagreement, negotiation, mediation, or other dispute, you will ultimately gain a more realistic, balanced assessment of your position. Such an assessment will help stave off overconfidence, a frequent byproduct of cognitive biases, that can leave you vulnerable to negotiating counter-attacks and -strategies.

In your next negotiation, take a cue from George Costanza. In appreciating the opposing side you will gain a useful tool to sharpen your arguments, anticipate and defuse counterarguments, and negotiate with greater success.

“You must force yourself to consider opposing arguments. Especially when they challenge your best-loved ideas.” 

—Charlie Munger

Often, when conducting a mediation, I talk with the parties about using negotiation as a way to uncover options. A prepared party enters mediation with a solid understanding of how the world might look if the case doesn’t settle at mediation. That understanding should include each party’s best and worst alternatives to settlement, along with a recognition that the future is inherently unpredictable.

Thus, when it comes time to mediate, the logical goal should be to uncover ranges of possible settlement values.

This goal is apt whenever we negotiate.

There is no winner or loser in negotiation. So it’s not about beating your opponent. Entering a negotiation with a goal of winning, or not losing, just doesn’t fit. Try thinking of negotiating to gain information, understanding, and a measure of control.

Once you negotiate to the point of reaching your most attractive settlement proposal, then – and only then – you can rationally compare the alternatives of settling versus not settling. It’s really the same with any negotiation, where your rational decision must be comparing (a) the choice of agreeing on the terms available to (b) the alternative of an ongoing dispute.

That is, you negotiate to uncover your set of options, and those options inform your decision to agree or walk away.

Thus, it’s critical to remain patient and negotiate to the point of at least understanding the other party’s best offer. If you don’t know what they’re willing to offer – if you haven’t uncovered all your options – how can you make an educated choice about your future?

“Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.”

—Viktor Frankl

In the autobiographical Man’s Search for Meaning, Austrian psychiatrist, neurologist and philosopher Viktor Frankl describes his experiences as a World War II concentration camp internee. Frankl shares excruciating details of how he persevered and remained mentally strong — and motivated to survive — despite having to endure unthinkable horrors as a camp prisoner.

Choice, Free Will, and Control

Among the many important lessons he instills, Frankl’s beliefs about choice and free will evoke Stoic tenets we’ve discussed before. One of Stoicism’s most basic charges is that we separate that which we can control from that which we can not. Frankl, despite his experiences of daily suffering and torture, physically, mentally, and spiritually, was able to maintain his zest for life and retain his ability to think freely.

Where Frankl was unable to change his circumstances, and though physically a prisoner, he clung to his internal freedom and perspective. Frankl chose to find meaning in his existence and suffering, and he developed a certain attitude of acceptance. Of course, he did not give up hope for survival, and from there he incredibly figured out his own way of making it through each day.

In many aspects, Frankl approached his dire situation as perhaps a Stoic would have. Once he accepted and faced the reality of his circumstance, Frankl was able to adopt a certain indifference and resilience that propelled him forward. An essential step in his struggle to survive was a degree of accepting that which he couldn’t change. That, in part, gave him an almost superhuman hope so many around him — understandably so — had lost.

Thoughts for Negotiators

In your typical negotiation, you won’t be facing life-and-death circumstances like Frankl was as a concentration camp inmate. However, we can learn from Frankl on so many levels.

First, it’s always important to know what’s possible and negotiable — for you and for your counterpart — and what’s simply unchangeable. That is, you must identify what you can control.

Additionally, good negotiators know that they’re most effective when able to think clearly and free of provocation. When you feel yourself tempted to bark back at an angry counterpart, no matter what that person says or does, you have the power to choose a different response.

It’s never easy to resist or respond calmly in the face of someone or something that generates a strong emotional reaction. Unfortunately, we rarely make our best decisions under duress or reacting in haste. Exercising patience, judgement, and restraint is often not the path of least resistance.

It’s a natural tendency to react under negotiation pressure and either give in to frustration or respond reflexively. Nonetheless, that response is yours to make, and you alone control which path you choose.

“You don’t have to turn this into something. It doesn’t have to upset you.”

—Marcus Aurelius

You’re convinced you’re right, but for some reason the other side just doesn’t get it. You’ve explained your position over and over again, but you’re still not getting anywhere.

You know the feeling. The mobile phone provider is insisting on charging you that international fee you switched off three months ago, again a month ago, and a third time last week. Your ten-year-old still doesn’t get why playing video games for 8 hours on a beautiful spring Saturday is a bad thing. The attorney on the other side of your mediation is looking at the same medical report you are, but for some reason what to you looks like a slam-dunk before the judge to her is a reason to investigate your client for fraud.

Either they aren’t listening, they don’t understand what you’re saying, or maybe they don’t even care about your point of view. Meanwhile, the clock is ticking, you feel like you’re wasting time talking to your counterpart, and pressure to reach a constructive resolution seems to be intensifying by the minute.

It’s incredibly frustrating, right? If you’re like most people, these scenarios probably make you, at minimum, anxious, frustrated, or both. Do negotiation logjams make your blood boil, cause you to shake your head and sneer, or quicken your pulse and breathing?

Depending on the source of the disconnect and many other variables, if involved in such a situation while mediating or negotiating you’ll likely be bombarded by emotional responses. Even if the subject matter of the underlying disagreement is of a cold, mechanical and objective nature – like a business matter to which you have no personal attachment – it’s natural that the disagreement itself will evoke an emotional response. And that’s okay. You’re human, after all.

But what’s not okay is giving in to that emotional response and letting your amygdala overpower your brain’s rational response. Recognize that emotions are involved in and guide decision-making, but endeavor not to let them divert you from making reasoned decisions. Science teaches us that though we humans are rational creatures, our primitive, “reptilian brain” sometimes leads us astray, particularly in the heat of the moment, and causes us to react in ways that can override our cool-headed, logical brains. Although our amygdala-centered, emotion-based limbic system has helped maintain the survival of the human species for millions of years – no small feat! – it’s not going to keep you calm and collected during a heated negotiation.

I’ve rarely, if ever, seen a hot, emotional exchange between disputing parties lead directly to rational discourse and decision-making during a negotiation. It doesn’t work with your kids or your spouse, it doesn’t score you any “wins” when commenting on provocative social media posts, and it certainly doesn’t result in compromise from your negotiating counterpart. Again, recognizing the emotions involved is important, but it’s critical that effective negotiators then go further and identify a logical process for communicating with the other side and working toward productive resolutions to disputes. There are various ways we can do this, and frequently it takes a skilled third party, like a mediator, to intervene and help the parties manage their emotional and rational responses. 

So acknowledge the emotions at play – both in your counterpart and in you – and then process them and take rational action to further resolution between the parties. When your emotions overtake you, in personal or professional disputes, your chances of reaching a satisfactory agreement on any matter plummet. This approach is very difficult to master, and you alone might not be able to control your emotions all the time, but these skills can be improved with practice and hard work.