Good Negotiators Focus on Their Resources

The deal you get when negotiating depends on what you focus on.

Posted Mar 24, 2015

Wikimedia Commons
Source: Wikimedia Commons

Life is full of negotiations.  Buying a car involves reaching an agreement with a dealer about the sale price.  Going out with friends on a Saturday night may trade off the movie your friends want to see against the restaurant where you want to eat.  Parents and children may haggle over how much homework has to be done before video games can be played.

In any negotiation, each party has to have some resource that the other wants.  The buyer wants the car, the seller wants the buyer’s money. 

An interesting paper by Roman Troetschel, David Loschelder, Benjamin Hoehne, and Johann Majer in the March, 2015 issue of the Journal of Personality and Social Psychology explored the way negotiations are described by the parties.

Suppose you were moving out of your apartment and you wanted to sell your appliances to the people moving into the apartment.  If you made an offer to the potential buyers, you could focus on your resource (the appliances) or theirs (the money).  That is, you could say, “I’ll give you my appliances for $500”, which focuses on your resource or “I want $500 for my appliances”, which focuses on the buyer’s resource.  Similarly, a buyer in that situation could make an offer that focused on the money (the buyer’s resource) or the appliances (the seller’s resource).

Should this matter?

In negotiations, you are generally less willing to give up your own resource than to want your negotiation partners to give up their resource.  So, if you focus on your own resource, you are likely to ask more for it than if you focus on the other person’s resource. 

In one study, for example, participants played the role of buyer or seller in a negotiation like the one I just described in which sellers were trying to sell their appliances to someone moving into their apartment.  Buyers and sellers were asked to make offers that were framed either in terms of their own resource or the other person’s.  Sellers asked for more money when they focused on their resource (“I’ll sell you my appliances for $X”) than when they focused on the other person’s resource (“I want $X for my appliances.”).  Buyers were willing to pay less when they focused on the money than when they focused on the appliances.  A second study demonstrated a similar effect with a trade rather than a purchase for money.

A second study focused on the recipient of an offer.  People got offers that were either focused on offering the other person’s resource or requesting that person’s resource.  For example, a participant playing the role of the buyer was either offered a resource (“You can have my appliances for $500”) or a resource was requested from them (“I want $500 for my appliances.”).  People were more likely to accept an offer when it was framed as an offer than when it was framed as a request.

This effect of framing also influences the outcome of negotiations.  In a series of studies using both children (who have very little negotiating experience) and adults, participants were given the chance to negotiate.  The children negotiated over trades of cards with fantasy characters on them.  The adults performed simulated negotiations over the purchase of resources.  The instructions in the negotiation got people to focus either on their own resource or the other person’s resource. 

Generally speaking, people got more in the negotiation if they focused on their own resource than if they focused on the other person’s resource.  The reason for this difference was that people had a harder time reaching an agreement when they focused on their own resource, because they were less willing to give up their resource when they focused on it than when they focused on the other person’s resource.

What does this mean for you?

If your primary goal in a negotiation is to maximize the value of the deal you get, then it helps if you frame the negotiation in terms of your resource.  Because you are reluctant to give up your resource, you will try to get more for it. 

However, there are times when it is also important that you reach an agreement rather than giving up the negotiation.  For example, when you are trying to make plans a friend, it is more important that you figure out how to spend the evening than that you get exactly what you want.  In that case, it might be helpful to focus on the other person’s resources, to help you reach an agreement.

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