What is the Negotiator's Dilemma?

Lesson Transcript
Instructor: Artem Cheprasov

Artem has a doctor of veterinary medicine degree.

This lesson goes over something known as the negotiator's dilemma. You'll learn what this is, what behaviors it involves, and what strategies are best to solve it.

The Negotiator's Dilemma

Have you ever negotiated with someone? You likely pursued one of two strategies. You were either open and honest in the hope that the other party would be as well, or you purposefully played the other side with machinations in order to get your way. Perhaps you used a combination of both strategies at different points in the negotiation. These strategies are actually part of what's known as the negotiator's dilemma. Let's learn more about what this is.

The negotiator's dilemma describes a choice a negotiator must make between following a competitive strategy or a cooperative strategy when engaging with another entity. In the world of business, this involves two major facets of the dilemma: value-creating behaviors and value-claiming behaviors.

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  • 0:04 The Negotiator's Dilemma
  • 0:47 Value-Creating Behaviors
  • 1:20 Value-Claiming Behaviors
  • 1:53 The Juxtaposition of…
  • 4:46 Lesson Summary
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Value-Creating Behaviors

Value-creating behaviors are those that negotiators use to come to a cooperative, win-win situation; that is to say, a scenario where both parties gain in some way or increase their available resources for success. Negotiators who are seeking to create value display the following types of characteristics and behaviors:

  • They are cooperative
  • They are open and honest
  • They are clear communicators.
  • They seek to find and gain common ground
  • They share information freely
  • They look for numerous options for both parties
  • They don't criticize

Value-Claiming Behaviors

On the other hand, negotiators who are following a competitive strategy may use value-claiming behaviors. Value-claiming behaviors are those that help a negotiator gain the largest slice of the pie, so to speak. Examples of such behaviors include:

  • The concealment of important information
  • Downplaying the other party's concessions
  • Exaggerating one's own concessions
  • Starting at an extreme, such as a high price, and slowly conceding from there if necessary
  • Resisting pressure and arguing forcefully for their side
  • Being noncommittal unless circumstances are highly favorable

The Juxtaposition of These Values

In light of this, negotiators face a dilemma. Let's say Bob represents online retailer Rainforest in his quest to partner with movie streaming company Digimovies and offer Digimovies to Rainforest subscription customers. Anna represents Digimovies in this case.

If both Bob and Anna pursue only what's best for them (they both compete), then both will likely end up getting a mediocre outcome. Perhaps neither Rainforest nor Digimovies will make all that much money from this joint venture as Bob and Anna hold their cards really close to their chest. In fact, they might not even partner up in this case since they can't really trust one another, so they're back where they started, with a pretty mediocre outcome to their negotiations.

Now, if Bob pursues a win/lose (competitive) strategy and Anna pursues a cooperative (win/win) strategy, then Anna may be left with a smaller piece of the pie because she'll be taken advantage of. In other words, the cooperative negotiator (Anna) will be left with a horrible outcome, while the competitive one (Bob) will have a great outcome.

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