Take it or leave it: How to control a negotiation like a game theorist

Negotiation looks on the outside to be extremely difficult. But if you're confident enough to have some patience from the outset, it's as simple as telling the other person to "take it or leave it."

Kevin Zollman: Game theorists have spent a lot of time analyzing various some models of negotiation. The idea is that you take what feels like a complex interaction, distill it down to it’s very simple elements and then you model it using the tools of game theory. 

One of the things that game theorists have found is that in negotiation, especially in negotiations where we’re debating how to divide up some resource—classic example in game theory is dividing up a pie, but it could be anything, like money or some time with a toy, or anything where we have to decide how to divide it up. 

Game theorists have discovered a couple of central principles that make a big difference to who does better in those negotiations. 

One of the critical things is how patient you are, how willing you are to stay and continue to negotiate. 

So if I come in in a rush to a car dealership and I say “I need a car right now,” everyone knows that the car dealer is going to try and take advantage of the fact that you need a car right now and say, “sorry, we can’t give you a discount.” 

But if you come into a car dealership and you say “I don’t need a car anytime soon… if you give me a good deal today I’ll take it, but if you don’t I’ll leave, maybe I’ll come back tomorrow, maybe the next day, maybe a month later,” then you’ll get a better deal. So patience is very important. 

If you’re trying to win in a negotiation you want to try and find ways to make it so that you are more patient than the other person—that is you have less to lose from letting the negotiation drag out than does the person you’re negotiating with. 

So don’t wait until the last minute to buy a new car, don’t run into the bosses office right before you need that big raise. Always choose situations where you just suggest it. Say “No urgency, but I can come back later.” 

By doing that you create this situation where the other person can’t take advantage of your impatience, they can’t give you a deal that is effectively a “take it or leave it” deal.

Another important thing in negotiation that can lead to better outcomes for you is: you always want to be in the position to be able to offer take it or leave it deals to the other person. 

So if you can say to somebody else “here’s the deal, take it or leave it,” now they’re put in a position where they take it or they get nothing.

Now it’s tricky, of course, because I can say to you “take it or leave it,” but that doesn’t mean that it really is that way. 

So by creating situations where it really is a take it or leave it situation, that can help you, but it’s also nerve-racking and dangerous so it’s a strategy that you have to be very careful about. But if you can be in a situation where you can offer somebody a true take it or leave it deal, that can often times improve the outcomes of the negotiation for you.

 

If you want to be an expert negotiator — or even a savvy game theorist — you must master one thing. Patience. Kevin Zollman, a professor at Carnegie Mellon and one of the leading game theorists in America today, offers us some insight into how to gain the upper hand when it comes to negotiating. Game theory comes in handy in many facets of life, from buying a car to asking for a raise. Zollman even goes as far to tell us not only how to attain negotiating power but how to sustain it, by simply telling the other other party to "take it or leave it." Kevin Zollman and Paul Raeburn are the authors of The Game Theorist's Guide to Parenting: How the Science of Strategic Thinking Can Help You Deal with the Toughest Negotiators You Know--Your Kids.

Europe's new space mission to uncover 'Truths' on climate change

The TRUTHS mission aims to collect extremely precise data on how much radiation Earth absorbs and reflects.

National Physical Laboratory
Surprising Science
  • TRUTHS would use state-of-the-art technology to precisely measure Earth's so-called "radiation budget."
  • The new technology would also help calibrate instruments aboard existing satellites.
  • The European Space Agency and UK Space Agency are expected to launch the mission in 2026.
Keep reading

There is no dark matter. Instead, information has mass, physicist says

Is information the fifth form of matter?

Photo: Shutterstock
Surprising Science
  • Researchers have been trying for over 60 years to detect dark matter.
  • There are many theories about it, but none are supported by evidence.
  • The mass-energy-information equivalence principle combines several theories to offer an alternative to dark matter.
Keep reading

Lincoln’s law: How did the Civil War change the Constitution?

Does the President get to decide when to ignore the law?

Videos
  • During the Civil War, Abraham Lincoln decided to suspend habeas corpus, a protection in the Constitution that prohibited imprisonment without a trial.
  • From Lincoln's point of view, following the law to the letter during that unprecedented and pivotal moment in history (i.e. the threat of war and secession from the Union) would put lawfulness itself at risk, so some restrictions of civil liberties were necessary.
  • The war and the president's actions changed how the founding document is interpreted and sometimes challenged by the rule of men.
Keep reading