A Crash Course in Emotional Negotiations: US vs. Iran
Coutries ruled by religion always have an advanced bargaining power
Posted Apr 03, 2015
Years ago, just less than a week before going on leave from Washington University, I put my car on the market. I had bought the used car for $5000 just less than a year earlier, but to sell fast I knew I had to be flexible. When a serious buyer called a day later he smelled a bargain and knocked off $1000 from my asking price of $4000. Then, in spite of living just a couple of blocks away, he took two days to come and look at the car. "So, when are you leaving?" he asked. "Two days," I said, surrendering to the instinct of telling the truth. The remaining negotiations were short. He got the car for a mere $2000.The reason that I got such a bad deal on my car was that I had been perfectly rational: I knew I couldn’t wait long, and I was unwilling to take a risk. Volumes of research papers in game theory, behavioral economics, and psychology show that these two attributes are detrimental to success in bargaining. To the extent that negotiations are carried out by human beings and not by robots, these findings are relevant to all types of negotiations – from haggling in a bazaar to multibillion dollar deals between corporations to political negotiations between states. The important insight that follows from these findings is that countries and organizations that are led by a religious conviction always have an advantage when it comes to bargaining with their liberal and democratic counterparts. This insight is hardly ever mentioned in regard to the US–Iran negotiations.
Here are two of these findings:
1. While common wisdom hails and praises rationality in negotiations it is usually the more emotional party who ends up on top. Maya Tamir from Boston College brought pairs of subjects to the lab to negotiate the allocation of sums of money between them. Some of these subjects were manipulated to enter the lab slightly angrier by being made to listen to irritating music. Those who entered the lab angrier eventually left it with more money.
2. The readiness to take a risk provides a negotiator with enhanced bargaining power. Nobel laureate Alvin Roth from Stanford University and his associates simulated negotiations in laboratory experiments after testing subjects for their risk attitude. Subjects who were more prone to take a risk in the test did substantially better in the negotiations. They insisted on getting a larger share of the pie, and made the other party cave in.
The bargaining power of a negotiator is directly determined by his ability to make credible commitments. Nobel laureate Thomas Schelling discusses this important insight extensively in his famous book "The Strategy of Conflict." Negotiations are a tricky game of threats and concessions. The more credible your threats are, the fewer concessions you will need to make. A credible commitment to a certain red line below which no further concessions are possible is, in a nutshell, the essence of bargaining power.
When God is on your side, or when such is your belief, or when such is the belief of the people on whose behalf you are negotiating, credible commitments are easy to make. Here is a brief manual that the religiously extreme negotiator typically uses: (1) If your demands aren't met, be patient. Don't rush to agree to anything. You don't need to report to anyone but God. Let your counterpart sweat. (2) You don't have to worry about taking a risk. No one you care about will blame you for relying on God to make the dice fall on the right side. (3) Allow yourself to be emotional while referring to your religious conviction. Words such as honor, pride, insult, and humiliation should rule the day. If your counterpart explains to the entire world that you should not be brought to your knees, know that your anger has paid off: reinforce it.
Emotions can work well for negotiators because they defy rationality. An emotional negotiator is a moderate version of the insane hijacker: any threat he makes should be taken seriously. This is precisely what led the head of Hamas, Ismail Haniyeh, to publicly announce last summer during the ceasefire negotiations with Israel: “We are a people that love death for the sake of Allah as much as our enemies love life.” A research paper by Marwan Sinacuer from Stanford University and Larissa Tiedens from INSEAD, entitled "Get Mad and Get More than Even," beautifully documents this effect with laboratory experiments.
Though it might turn out to be too late for the current negotiations with Iran, liberal negotiators should know that they can also draw red lines and commit to them. It requires them to be determined and to give liberal moral sentiments a status of religion. It requires that liberal negotiators explain to their counterparts that execution of women for infidelity or persecution of ethnic minorities and homosexuals drives us liberals mad just as much as Charlie Hebdo's caricatures drive Muslim extremists mad. It requires that their counterparts understand that our "irrational" concern about their nuclear capability is just as legitimate as their irrational tendency to feel humiliated.
This Piece by me Appeared in Time Magazine on March 25th, 2015