Negotiating With Santa

In this scene from the film Bad Santa, Gin has found out that Willie and Marcus are running a successful scam and tries to negotiate a deal to exchange something that he values—a share of the profits—for something he knows the other party will value—his silence about the scam. Knowing what the other party values gives Gin the upper hand (Malhotra & Bazerman, 2007) and perhaps explains why he is successful in getting a good deal for himself from the negotiation.

Both parties use some techniques within their negotiation, however, not all techniques are equally successful. One technique that Gin uses in this scene is anchoring. He does this by making the first offer, creating a starting point for any other offers which are made. Because of the effect of anchoring, making the first offer in a negotiation is preferable (Galinsky & Mussweiler, 2001) and studies such as Tversky and Kahneman (1974) have found that because of this anchoring effect, making the first offer in a negotiation usually leads to a better outcome for that party, particularly when you know, as Gin does, how the other party value what is being offered.

Another technique that Gin uses is staying quiet. Once he has made his first offer, he lets the other party do all the talking. This is also successful negotiation technique (Guth, 2008) as it means the other party are the ones making the concessions, and therefore creating a better deal without you having to do anything!

However, Gin does not follow some of the suggested methods of negotiation, for example, starting by asking for more than he expects to get (Thorsteinson, 2011). He begins with his first and only offer—half of the money earned—and doesn’t budge. However this technique works for him because Willie and Marcus have no best alternative (BATNA); they have to make a deal with Gin or they will be exposed as con men. Because of their position Gin gets exactly what he wants from the deal without having to make any concessions because they have no other choice than to make a deal.

Despite this, Marcus does his best to try and elicit reciprocal concessions from Gin. He begins with a counter offer of 30% and when Gin doesn’t agree or reduce his offer, he tries 8 different counter offers, steadily increasing before agreeing to Gin’s original offer of half. While this technique is usually successful (eg. Cialdini et al, 1975), in this situation is not because Gin knows that that Marcus and Willie have no BATNA, and therefore he can effectively make them agree to any terms he offers in the negotiation.

References

Cialdini, R. B., Vincent, J. E., Lewis, S. K., Catalan, J., Wheeler, D., & Darby, B. L. (1975). Reciprocal concessions procedure for inducing compliance: The door-in-the-face technique. Journal of Personality and Social Psychology, 31, 206-215.

Galinsky, A. D., & Mussweiler, T. (2001). First offers as anchors: The role of perspective-taking and negotiator focus. Journal of Personality and Social Psychology, 81, 657-669.

Guth, S. R. (2008). The contract negotiation handbook: An indispensable guide for contract professionals. Morrisville: NC, Lulu Press.

Malhotra, D., & Bazerman, M. (2007). Negotiation genius: How to overcome obstacles and achieve brilliant results at the bargaining table and beyond. New York, Bantam Dell.

Thorsteinson, T. J. (2011). Initiating salary discussions with an extreme request: Anchoring effects on initial salary offers. Journal of Applied Social Psychology, 41, 1774-1792.

Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185, 1124-1131.


Ellen Quigley