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  • Jonathan E. Pearl

How to make concessions like a boss!

Make sure you Anchor

Most important first step in making any concessions in negotiation is to anchor the original offer. Spend some time legitimising your original offer and it will act as an ‘anchor’. The anchoring and adjustment phenomena, first studied by Amos Tversjy and Daniel Kahneman in 1995, is strong. And don’t give up on your original demands too easily. If the other side considers your first offer to be frivolous, your willingness to move away from it will not be seen as concessionary behaviour. By contrast, your concessions will be more powerful when your counterpart views your initial demands as serious and reasonable.


Shout Your Concessions from the Rooftop!

Don’t assume that your generous concessions in negotiation will speak for themselves. Your counterpart will be naturally predisposed to overlook, ignore, or downplay your "give-aways" in order to avoid the strong social obligation to reciprocate. So, it’s your responsibility to make it clear when you make concessions. Thump the table if you have to.


First, tell the other side what you have given up or what you have stopped demanding. By doing so, you clarify that a concession was, in fact, made. Second, emphasise the benefits to the other side - not the cost to you. Research at Leuphana University (2015) found in studies that when a person offers a resource, his or her counterpart will make greater concessions than when the person concerned asks for a resource—even though the offers are objectively identical. Parties reciprocate concessions based on benefits they recognise as having received, while downplaying how much others are sacrificing.


Demand And Define Reciprocity - Those who don't ask, don't get!

Emphasising your concessions helps trigger a social obligation to reciprocate, but sometimes your counterpart will be slow to act on that obligation. To increase the likelihood that you get something in return for your concession, you can explicitly and diplomatically demand reciprocity.


Sometimes it helps if you actually spell out the precise form that reciprocity should take, such as an extension to a related deadline, or a reduced rate of interest payment. Negotiators often overlook the need to define reciprocity, even when they are in the best position to know what they value, and what they don’t. Sometimes there’s a fear of letting people know what you value in negotiation. Personally, I live by the maxim: “Those who don’t ask, don’t get!


Be Big!

Don’t be small-minded and petty regarding concessions. Through the process of reasonable give-and-take each side learns about the interests and concerns of the other and makes good-faith efforts toward achieving joint gains.


Make Contingent Concessions

It's easy to be "big" about concessions when there is likely to be a long-running relationship, or where there is already a good deal of trust built up. It can be more difficult being “grown-up” about giving concessions where there’s little or no trust between the parties, or where it's a one-shot deal.

In those cases the 'contingent concession' can be a useful tool. A concession is contingent when you make it clear that you are only making a particular concession on the condition that the other party agrees to make a specified concession in return. Contingent concessions are low-risk and allow you to signal to the other side one of your ‘anchors’.


But an over-reliance on contingent concessions can get in the way of building trust – because they aren’t actually concessions at all.


Don’t concede all in one go!

Extensive research by Amos Tversky and Daniel Kahneman in the 1970s demonstrates that while most of us prefer to get bad news all at once, we generally prefer to get good news in instalments.

All the research suggests that the same concession will be more positively received if it is broken into instalments than if it is conceded in one go. I know that sounds crazy, but it is true.


There are other good reasons to make concessions in instalments. First, most negotiators expect that they will trade offers back and forth several times. If you give away everything in your first offer, the other party may think that you’re holding back even though you’ve been as generous as you can be. Galinsky's research (Columbia University) showed that a counterpart’s quick acceptance of an offer can cause a negotiator to regret that s/he didn’t ask for more.


Instalments may also lead you to discover that you don’t have to make as large a concession as you had originally calculated. When you give away a little at a time, you might get everything you want in return before using up your potential trading items. Whatever is left over is yours to keep—or to use to help prompt further reciprocity from the other side.


Finally, making multiple, small concessions indicates to the other party that you are flexible and willing to listen to his needs. Each time you make a concession, you have the opportunity to label it and extract goodwill in return.

This bloke won't haggle!!


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