Here’s the situation: Margaret, originally from Canada, is Andrew’s boss. Her Visa has expired, and in order to avoid deportation she blackmails Andrew into marrying her. Due to the risk of being fined or even jailed, however, he has some terms of his own.
Andrew begins the negotiation with his request to be promoted to editor. First offers have a strong anchoring effect, because they become a standard by which people judge the value of subsequent offers. For this reason, high anchors are followed by offers that are also high in value. Research has demonstrated that whoever makes the first offer gains a bargaining advantage, as the final outcome tends to be in their favour (Galinsky & Mussweiler, 2001). Furthermore, the value of the first offer has an effect on the outcome, with those that are more extreme leading to an even better outcome for the negotiator who makes it, (Galinsky, 2004). Making an extreme first offer no doubt helped Andrew to come out of the negotiation with a more favourable deal.
One reason for why Andrew made the first offer may be related to his confidence and sense of power in the situation, due to the urgency of Margaret’s situation. Indeed, Margaret is at a disadvantage because she has a low value BATNA (Best Alternative To a Negotiated Agreement), her alternative should the negotiator fail to reach an agreement. If she does not reach an agreement with Andrew, she has no choice but to be deported and lose her job. She is therefore limited with regards to what her lowest offer may be and is more likely to accept relatively less profitable settlements. Andrew, on the other hand, has a better BATNA and is more willing to walk away from the negotiation, which he does (literally) when Margaret refuses his initial deal, stating that he will simply quit. Research shows that more attractive alternatives bring better outcomes, and what’s more, the better your alternative relative to that of the other party, the greater your benefit (Pinkley et al., 1994).
It could be said that Andrew has an exit option while Margaret does not. Such a negotiator is in a more favourable position as they are less dependent on their opponent, who must adjust their offers in an attempt to keep them from using the option (Giebels et al., 2000). During the scene it becomes increasingly evident that Margaret’s terms are reliant on what Andrew says.
Andrew’s position is strengthened by the fact that they are bargaining under differing time pressure since Margaret needs to secure her right to remain in the country as soon as possible; this is one of the conditions of a negotiation that may contribute to the advantages of one party. Time pressure causes a dramatic shift in an individual’s offers to be on the losing side of the negotiation (Benton et al., 1972).
Benton, A. A., Kelley, H. H., Liebling, B. (1972). Effects of extremity of offers and concession rate on the outcomes of bargaining. Journal of Personality and Social Psychology, 24(1), 73-83.
Pinkley, R. L., Neale, M. A., & Bennett, R. J. (1994). The impact of alternatives to settlement in dyadic negotiation. Organizational Behavior and Human Decision Processes, 57(1), 97-116.
Giebels, E., De Dreu, C. K. W., & Van de Vliert, E. (2000). Interdependence in negotiation: effects of exit options and social motive on distributive and integrative negotiation. European Journal of Social Psychology, 30(2), 255-272.
Galinsky, A. D. (2004). Should you make the first offer? Negotiation, 7, 3-5.
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(4), 657-669.