The Negotiator Magazine

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Near the end of the Information Stage, the parties stop asking each other questions, and talk about what they must obtain if a deal is to be reached. They have entered the Distributive Stage. During the Information Stage they create value, and during the Distributive Stage they claim value as each vies for the different items to be exchanged. Negotiators need to have planned concession patterns they hope will lead from their opening offers to the area in which they hope to conclude the interaction. They should know which bargaining tactics they plan to employ, and know how to recognize and counteract the techniques used by their opponents.

Toward the conclusion of the Distributive Stage, the participants see an agreement on the horizon, and they enter the Closing Stage. Since human beings like certainty, the parties often move swiftly to solidify the deal. The Closing Stage is a time for patience and deliberate action. Instead of moving quickly toward closure, negotiators should move carefully. They should avoid consecutive concessions that would cause them to bid against themselves. They should work to induce the other side to close a majority of the distance remaining between the parties. If they are successful, the opposing side may close sixty, seventy, or even eighty percent of the gap, providing this side with a real gain.

Once the Closing Stage is done and the parties have an agreement, they often go home and forget the Cooperative Stage. At this point, their agreement may not be efficient. Both sides have over- and under-stated the value of items for strategic purposes. Different terms may have ended on the wrong side of the bargaining table. To ameliorate the impact of this phenomenon, each party should offer to trade items they value less for terms they prefer. They hope to expand the overall pie being divided and make exchanges that simultaneously improve their respective positions. They want to reach the Pareto superior point at which neither can gain without the other suffering a loss. Only when they reach this point should they consider their interaction done.

Lawyers and business people constantly keep up with their substantive areas of expertise. They read professional journals and books, and they attend professional development programs. When was the last time they read anything pertaining to negotiating or participated in a negotiation training program? For most, the answer to this inquiry is “never.”

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May 2006