By trying to maximize our profit, we achieve better outcomes. Or is it the other way around?

The debate over Brexit has paralyzed British politics for more than three years, since the June 2016 referendum that put the UK on the path to exiting the European Union. Former Prime Minister Theresa May had been struggling to get parliamentary support and pass a deal with the EU. Finally, after all her failed attempts, Boris Johnson became the Prime Minister of the UK.

Boris Johnson managed to secure a parliamentary majority in the landslide election on December 12 and a mandate to “Get Brexit Done” (Perrigo, 2019). After 47 years in the bloc, the UK officially left the Eurozone on Friday the 31^st of January, 2020.  Both the UK and the EU now enter a transition period and the two parties have until the end of this year to conclude a deal that replaces the current relationship on trade and other critical issues (Edgington, 2020). Unarguably, this is going to be one of the biggest and most discussed negotiations of the post-war era. The EU has already warned the UK of “difficult” Brexit trade talks, in case that the transition period is not extended beyond 2020. Boris Johnson, on his side, has ruled out any extension request and warns of a ‘no deal’ scenario if things don’t move his way (Sanchez-Nicolas, 2020). At the same time, Nicola Sturgeon, the Prime Minister of Scotland, insists that Brexit will pave the way for Scotland’s independence (Dickie, 2020), which adds further complications to the negotiation agenda.

 

Don’t negotiation partners know how to achieve joint outcomes, or do they merely not care?

 

Clearly, a lot depends on the success of these negotiations. But why are negotiations between partners so difficult? Don’t partners know how to achieve joint outcomes, or do they merely not care?

The problem with negotiations

Negotiators, even professional ones, make a surprisingly large number of unfortunate decisions dooming negotiations that should otherwise have succeeded. Many of these mistakes stem from self-centered negotiation strategies and negotiators’ overarching focus on meeting their personal or their group’s interests, regardless of the loss the others may have to face. Extreme offers, threats, bluffs, power play, and manipulation of information are among the most common strategies that negotiators use to get their way. In other words, negotiators often try to put their best foot forward to grab a bigger chunk of the resources and thus to maximize their profit at the cost of the opponent’s profit (Canary, 2003). This negotiation strategy is called distributive bargaining: a highly competitive strategy that creates two sides, the winners and the losers (win-lose strategy) (Lewicki, Barry, & Saunders, 2018).

 

Negotiators often try to put their best foot forward to grab a bigger chunk of the resources and thus to maximize their profit at the cost of the opponent’s profit.

 

Then again, at other times negotiators reveal a joint initiative that will prove beneficial to all the negotiating parties. In these cases, the negotiators do not build upon how much they will receive; rather, all efforts are directed at increasing the total payoff (for all sides) through mutual cooperation. Since this negotiation strategy is based on common interests and joint efforts of all the parties involved in the negotiation, each party perceives the others as partners and collaborators. This is the so-called integrative bargaining,  a win-win negotiation strategy (De Dreu, 2004; Putnam, 1990; Raiffa, Richardson, & Metcalfe, 2007). The classic (and often-used) example of an integrative –and thus interest-based– bargaining is that of a dispute between two children over an orange:

 

Both children take the position that they want the whole orange. Their mother serves as the mediator of the dispute and based on their positions, cuts the orange in half and gives each child one half. This outcome represents a compromise (and thus not a win-win outcome) rather than an interests-based bargaining. However, if the mother had asked each of the children why they wanted the orange — what their interests were — there could have been a different, win-win outcome. This is because one child wanted to eat the meat of the orange, but the other just wanted the peel to use in baking some cookies. If their mother had known their real interests, they could have both gotten all of what they wanted, rather than just half.

 

Not surprisingly (at least to anyone who reads the news), distributive bargaining is the most commonly used strategy in representative negotiations in particular –such as in negotiations in the political sphere– where representatives (e.g., leadings members of a group or a constituency) are assigned to negotiate an agreement on behalf of the parties involved (Benton & Druckman, 1974). Typically, representatives feel strongly accountable to their constituency and their wishes. Therefore, in absence of clear cues suggesting otherwise, assume that the best way to serve their constituency is to set high demands and in general follow a competitive course throughout the negotiation compared to negotiators who act on their own behalf (see for a review De Dreu, Aaldering, & Saygı, 2014). Whereas such a competitive mindset might indeed lead to higher individual (and constituency) gain, it can also reduce the likelihood that an agreement is reached and damage subsequent intergroup relations and conflict resolution in the long term (Rubin, Pruitt, & Kim, 1994). In the Brexit example, Boris Johnson, the representative of the UK, has shown on his part his forcing attitude through the use of bluffs and no-deal threats since he became the UK Prime Minister. The representatives of EU constituency, do not show much integrative intentions on their part either. Instead, with quotes like “the British are not at the table, but are on the menu” they indicate that the UK has no longer say in the decision making of crucial issues and that decisions will be made for them (Sadée, 2020).

Why do most people choose distributive over integrative strategies, if the latter are so clearly to be preferred?

Choosing suboptimal strategies

But why do most people choose distributive over integrative strategies, if the latter are so clearly to be preferred? There seem to be two reasons for this.

First, distributive bargaining is easier. All you have to worry about is what you want, because you don’t (or don’t need to) care about your opponent. Thus, distributive bargaining limits the information processing load of the negotiation; you only have to keep an eye on what you’re getting out of it. Second, we tend to assume that we are in competition for slices in a ‘fixed pie’ in which one side wins and the other side loses. In other words, I can only win by making you lose. As Bazerman and Moore (2013) note, the fixed pie assumption is a fundamental bias that distorts negotiators’ behavior: When negotiating over an issue, they will assume that their interests necessarily and directly conflict with the other party’s interests, and this will shape their negotiation behavior.

Especially in the world of politics, where transparency is low, issues are complex, and dominance and power games are omnipresent, one can imagine why forcing strategies prevail. But particularly in this complicated world where impactful decisions for millions of people are made, there is an increasing need for leaders/representatives who promote open and interests-based communication with the opposing parties, creating solutions through problem-solving rather than insisting on their positions. Moreover, integrative solutions are not only better for both parties, but could strengthen their motivation to engage in integrative bargaining in the future – for example, when negotating new trade agreements, which will have to happen at some point.

From negotiations to a shared future

Brexit opens an uncertain future (especially for the UK, but also for the EU), and reaching a joint outcome does not appear very realistic at the time being. Then again, history offers some examples of seemingly ill-fated negotiations that eventually had a promising result, and these give an encouraging message. For instance, when Cyprus was struggling with the broader ramifications of the financial crisis in 2012, negotiations with EU seemed to have failed abysmally (Traynor, Moulds, Elder, Amos, 2013, 25 March). Riots and protests against EU negotiators were the main reaction of Cypriots citizens, while the Cyprus government immediately rejected the EU negotiation plan. However, the two parties eventually reached a mutual agreement, not only improving Cyprus economy, but also substantially ameliorating the relationships with the EU.

 

Possibly –hopefully– the two parties will find a vital solution that leaves behind two winners and no losers.

 

Similarly, all scenarios about a possible ‘Grexit’ (i.e., an exit of Greece from the Eurozone) have been abated and against all odds, Greece can again stand on its own two feet. All in all, although Brexit is a fact and this marks a new chapter for both the UK and the EU, still there are 11 more months of negotiating  a mutually accepted agreement. Possibly –hopefully– the two parties will find a vital solution that leaves behind two winners and no losers! After all, the two parties will always be dependent on one another and the development of a firm and solid relationship between them can only be beneficial to both.

 

Picture credit: Photo by Anna Samoylova on Unsplash

 

References

Bazerman, M.H., & Moore, D. (2013). Judgment in managerial decision making (8^th ed.). John Wiley & Sons Inc.

Benton, A. A., & Druckman, D. (1974). Constituent’s bargaining orientation and intergroup negotiation. Journal of Applied Social Psychology, 4, 141–150.

Canary, D.J. (2003). Managing interpersonal conflict: A model of events related to strategic choices. In J. O. Greene. & B. R. Burleson (Eds.) Handbook of communication and social interaction skills. Mahwah, NJ: Lawrence Erlbaum, 515‐550.

De Dreu, C.K.W. (2004). Motivation in negotiation: A social psychological analysis. In M. J. Gelfand & J. M. Brett (Eds.) The handbook of negotiation and culture. Stanford, CA: Stanford University Press, 114‐138.

De Dreu, C. K. W., Aaldering, H., & Saygı, Ö. (2014). Conflict and negotiation within and between groups. In J. Dovidio & J. Simpson (Eds.), Handbook on interpersonal relations and group processes (pp. 151–176). Washington DC: APA Press.

Dickie, M. (2020, 1 February). Brexit will speed Scottish independence, says Nicola Sturgeon. Financial Times. Retrieved from https://www.ft.com/content/97c26b48-441c-11ea-a43a-c4b328d9061c

Edgington, T. (2020, 31 January). Brexit: What is the transition period? BBC news. Retrieved fromhttps://www.bbc.com/news/uk-politics-50838994

Lewicki, R.J., Barry, B, & Saunders, D.M. (2018). Negotiation. Boston: McGraw-Hill.

Perrigo, B. (2019, 13 December).  ‘Get Brexit Done.’ The 3 Words That Helped Boris Johnson Win Britain’s 2019 Election. Retrieved from https://time.com/5749478/get-brexit-done-slogan-uk-election/).

Putnam L. L. (1990). Reframing integrative and distributive bargaining: A process perspective. In R. J. Lewicki, B. H. Sheppard, M.H. Bazerman (eds.), Research on negotiation in organizations, JAI series annual, Greenwich CT: JAI.

Raiffa, H., Richardson, J., & Metcalfe, D. (2007). Negotiation analysis: The science and art of collaborative decision making. Cambridge, Mass: Belknap.

Rubin, J. Z., Pruitt, D. G., & Kim, S. H. (1994). Social conflict: Escalation, stalemate, and settlement. New York, NY: McGraw-Hill

Sadée, T. (2020, February, 5) De Britten zitten niet meer aan tafel maar staan op het menu. Nrc.nl. Retrieved from https://www.nrc.nl/nieuws/2020/02/05/britten-niet-meer-aan-tafel-maar-op-menu-a3989494

Sanchez-Nicolas, E. (2020, 9 January). Brussels warns UK of ‘difficult’ Brexit trade talks. EU observer. Retrieved from https://euobserver.com/brexit/147069

Traynor, I., Moulds, J., Elder, M., Amos, H. (2013, 25 March). Cyprus bailout deal with EU closes bank and seizes large deposits. The Guardian. Retrieved from https://www.theguardian.com/