Making Negotiation Child's Play

A scene from Just Go With It (2011)

Maggie: ‘I wanna actually get paid.’

Danny: ‘All right, what do you want?’

Maggie: ‘$600 for the day, plus overtime if we go over eight hours. I'll do my own hair and makeup. And I want you to pay for the six-week intensive acting camp that my mom can't afford.’

Danny: ‘$50 for the day and a two-week acting class at the YMCA nearest you.’

Maggie: ‘$500 and a four-week acting class.’

Danny: ‘$300 and a three-week class.’

Maggie: ‘Done.’

Regardless of contextual information from this blockbuster movie, there is no denying that little Maggie drives a hard bargain in negotiating exactly what she wants. Maggie initially has the upperhand with Danny as her vulnerable opponent – it is he who wants something from her, so Maggie has the chance to abuse this power.

She puts into play a few key negotiating tactics; primarily, anchoring and highballing. Firstly, going in with a high offer with confidence in it’s approval puts her at an advantage as she knows that Danny needs this from her – providing little wiggle room. Cialdini et al. (1975) found that hearing a high request first, more than doubled the rate of agreement to the second request (50%), than if the request was heard without the initial high offer (17%). Secondly, and more empirically, Maggie anchors a benchmark figure of $600 to begin with, of which research has shown a positive correlation between the initial anchor and negotiation outcome (Orr & Guthrie, 2005).

The zone of possible agreement is eventually met, where Maggie gets the optimal benefits to Danny’s minimal costs. After the agreement, Maggie and Danny both mention their BATNAs (best alternative to the negotiated agreement).

Danny: ‘I would have done it for $500.’

Maggie: ‘I would have done it for the experience.’

Research has been conducted to show awareness of your BATNA before the confirmation of agreement will better your outcome (White & Neale, 1991) as well as leading to a positive outcome for yourself (Pinkley, Neale & Bennett, 1994).

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References

Orr, D., & Guthrie, C. (2005). Anchoring, information, expertise, and negotiation: New insights from meta-analysis. Ohio St. J. on Disp. Resol., 21, 597.

Kristensen, H. & Garling, T. (1997). "The effects of anchor points and reference points on negotiation processes and outcomes". Goteborg Psychological Reports, 2, 8-27.

Pinkley, R. L., Neale, M. A., & Bennett, R. J. (1994). The impact of alternatives tosettlement in dyadic negotiation. Organizational Behaviour and Human Decision Processes, 57, 97-116.

White, S. B., & Neale, M. A. (1991). Reservation prices, resistance points, and BATNAs: Determining the parameters of acceptable negotiated outcomes. Negotiation Journal, 7, 379-388.