CHAPTER 06: Bend Their Reality

Summary

• The episode discusses the high rate of kidnappings in Haiti, which had the highest kidnapping rate in the world at the time.
• The kidnappings were often done by ski-mask-clad kidnappers, who targeted vulnerable victims like women, children, and elderly people.
• The kidnappings were driven by business rather than political agendas.
• The episode emphasizes the importance of understanding the "subterranean world of unspoken needs and thoughts" in negotiation, which can be leveraged to change the other party's needs and expectations.
• The episode criticizes the traditional win-win mindset of negotiation, stating that it is often ineffective and can be disastrous.
• The episode suggests that instead of compromising, one should look for ways to "bend the reality" of the other party to conform to what the negotiator ultimately wants to give them.
• The episode argues that deadlines are often arbitrary and flexible in negotiations, and therefore, should not be feared.
• The episode suggests that clients should internalize the mantra "no deal is better than a bad deal" and believe that they have all the time they need to conduct negotiations.
• The episode discusses how kidnappings in Haiti were not politically motivated, but instead driven by the kidnappers' desire to get paid by Friday in order to party over the weekend.
• The episode explains that once the pattern and self-imposed deadline of the kidnappers were understood, the leverage shifted to the FBI's side as they could stall negotiations until Thursday or Friday, and offer much less than the initial ransom demand.
• The episode suggests that deadlines can play into the hands of negotiators in other types of negotiations as well, such as car sales and corporate sales.
• The episode notes that most old-school negotiation experts advise keeping one's own deadlines secret, but it is not always the best strategy.
• The episode discusses the Ultimatum Game, which is a game that is used to test people's willingness to accept unfair offers.
• The episode argues that people's choices in the Ultimatum Game are not rational, but are based on emotions.
• The episode explains that decision making is governed by emotions and not by logic.
• The episode notes that the most powerful word in negotiation is "fair" as people comply with agreements if they feel that they have been treated fairly.
• The episode cites that nonhuman primates also reject unfairness, citing an example of a study where two capuchin monkeys were given different rewards for performing the same task.
• The episode states that people will often reject offers that are less than half of the proposer's money as the negative emotional value of unfairness outweighs the positive rational value of the money.
• The episode gives an example of Robin Williams who was angry because of the perceived unfairness of his contract, not the money.
• The episode also mentions how Iran's rejection of the perceived unfairness of sanctions cost it well over $100 billion in foreign investment and oil revenue.
• Deadlines are often arbitrary and flexible, and do not have the consequences we think they will have.
• "No deal is better than a bad deal" is a useful mantra when negotiating.
• Knowing the other party's self-imposed deadline can give you leverage in negotiations.
• Emotion is a necessary element in decision making, and is ignored at our own peril.
• The most powerful word in negotiations is "fair" as human beings are swayed by how much they feel they have been respected.
• To discover the emotional drivers behind what the other party values, you need to get at what people are really buying.
• You can bend reality from insult to victory by changing one or two variables.
• Prospect theory, created in 1979 by the psychologists Daniel Kahneman and Amos Tversky, describes how people choose between options that involve risk.
• Certainty effect states that people are drawn to sure things over probabilities, even when the probability is a better choice.
• Loss aversion states that people will take greater risks to avoid losses than to achieve gains.
• The author suggests that it is best not to make the first offer in negotiations, because the other party will use it as an anchor point and it will affect their perception of the value.
• He advises to establish a range instead, which implies a higher value for the item or service, and it establishes a "ballpark" that the negotiation should be in.
• He also suggests to pivot to nonmonetary terms in order to make the offer seem more reasonable, by offering things that matter more to the other party, or asking for things that matter more to you.
• He also mentions that reputation is important, and that people should strive for a reputation of being fair, and that this will pave the way for success.
• He also mentions the concept of anchor and adjustment, which is a psychological quirk, where people tend to make adjustments from their first reference point, and that this can be used to one's advantage.
• He also mentions the concept of Prospect Theory, which describes how people choose between options that involve risk, and how people tend to be drawn to sure things over probabilities, and how people tend to take greater risks to avoid losses than to achieve gains.