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By Steven G. Mehta
A new study published in Economic Inquiry addresses the question: “If we can make a deal, why fight?” The authors conclude that a combination of each side recognizing the probable outcome and both sides considering the use of time similarily allow a potential loser of a conflict to use small concessions to successfully appease an expected winner. Given those conditions, small negotiated concessions can work, but in situations where clear and specific inequities exist, small concessions to avoid a fight won’t work.
The article offers support for their theory that “in the baseline case of common beliefs and identical time preferences, if the size of indivisibility is sufficiently small, conflict can always be avoided by a series of small concessions, with both parties recognizing that there will be additional concessions in the future.”
According to the research, both sides to the conflict must recognize the relative strengths of their positions and conflict can only be avoided when both parties agree that peace is preferable. However, if the perceived winner is more impatient than a likely loser, then this factor is a major consideration in talks failing and conflict being inevitable.
Although this research is not in the field of mediation, some of this research can be translated to litigation. First, the research supports the concept of ripeness for mediation. See my prior article on ripeness. There is a time that is better for mediation than others. Both sides must recognize their strengths and weaknesses, and must be willing to consider peace.
Second, how each side views time is also important to resolution. Recently, I had a mediation that nearly failed because of time perception disparities. The defense had a very strong case to demonstrate that there was limited to no liability. The plaintiff, however, was extremely emotional about the underlying facts, regardless of whether liability was good or bad. As the mediation progressed, the defense got increasingly more impatient with the progress of the mediation because the defense could not understand why the plaintiff wasn’t making more concessions and would not accede to what the defendants thought was a fair offer.
Each side had a different perception of time: Plaintiff believed that the process was about her and her emotions. She was not looking at the clock. She was not paying hourly to her attorney. Defense on the other hand felt that if the mediation was not going to work, why waste time when they would eventually win at trial. Only after both sides could understand the other’s perception of time, then the case became ready to resolve.
- · Practice Point — In all aspects of litigation and life, people will have different times in which they can handle a certain matter. No two people react to the same scenario in the exact same way. If you are finding yourself stressed because of time constraints, step back and pause to consider why the time constraints are important. Are the time constraints necessary? Consider whether the other side has the same perceptions as you and whether they perceive time in the same way as you. If they don’t, and if time is critical, consider letting the other side know of your time constraints. Often a little patience can go a long way.
- Jack Hirshleifer, Michele Boldrin, David K. Levine. The Slippery Slope Of Concession. Economic Inquiry, Volume 47 Issue 2 , Pages 197 – 393 (April 2009) DOI: 10.1111/j.1465-7295.2008.00154.x
By Steven G. Mehta
On many playgrounds, you will often hear the phrase “that’s not fair.” Those three words also have a huge impact in dispute resolution. That is because the principle of fairness is often overlooked.
Fairness is hardwired.
First, and foremost it is important to understand that the concept of fairness is hardwired into our brains. Several recent neuropsychological studies have discovered that the belief that things should be fairly apportioned or divided is an emotion that is built into the brain and not just a cultural norm. One study conducted by researchers at Stanford and the University of Illinois found that there are different parts of the brain that respond to concepts of fairness and equity. As one of the researchers, Brian Knutson from Stanford explained, “When people see an unfair offer, they actually have a negative emotional reaction to it…They have a visceral reaction to unfairness.”
Another study from UCLA also found similar results. Participants were asked to divide a certain sum of money in any way that they wanted between themselves and another person. The second person could only accept the sum or reject the sum. There was no negotiation. The study found that regardless of the dollar amounts at issue, the participants were much happier with fair offers and much more disdainful of deals that were lopsided or unfair. Just as with the Stanford study, they did brain scans of the participants and found that different areas of the brain were activated when dealing with fair and unfair offers.
Studies in the sociological and employment context have also found interesting results that correlate fairness to the outcome of the action. For examples, numerous researchers have found that employees respond both to what happens as well as how it happened. In other words, “it’s not only what you do, it’s how you do it that counts.” The researchers found that the level of negative emotions and anger was lower when the employees perceived that they were treated fairly. Interestingly, anger towards unjust treatment was not reduced by monetary compensation.
This principle is true in many cases in conflict. Often the perceived unfairness of treatment by one of the parties long ago feeds the emotional anger of people during the dispute resolution process. This is especially true, as the researchers suggest, when the people were in times of vulnerability and uncertainty, such as impending unemployment, problems with health due to injury, or the loss of a loved one.
Research has also found that there is a direct relationship between trust and fairness of the process. The more that people consider the process to be fair, the more likely they will be to trust the other party. In turn, the more the person trusts the other person, the less they are concerned with the immediate economic consequence of the deal.
Fairness And Dispute Resolution
First and foremost, do not act disrespectfully to the other person. For example, several studies have shown that people who are treated unfairly or in a manner they deem as disrespectful are more likely to sue the people they perceive created the injustice. The desire for retribution (as opposed to monetary gain) is a common motivation for lawsuits. Here, before the matter gets into litigation, it is important to try and utilize procedures that create as much fairness as possible. For example, in the employment context, simple things such as regular reviews of performance, providing the opportunity to be heard by an independent person, providing a means to air a grievance, and using objective standards, can go a long way to creating an environment that is deemed fair.
Second, it is important to understand that, “it’s not what you say, it’s how you say it.” Many cases can be avoided by being aware of the impact of the action on the other person. Make sure to have good bedside manner. Treat the person with respect, even when you are taking action that is detrimental to the person. Provide the person with an opportunity to be heard and to explain his or her situation, even if your mind is made up.
Let the other person be heard, even if that voicing of opinion won’t change the outcome.
Try to create opportunities to remedy the perceived injustice or disrespect that may have happened to the party. Ask for the other person’s guidance and help as a means of allowing that person to let go of the issue.
As Frank Barron, the UC Berkeley professor, stated, “never take a person’s dignity: it is worth everything to them, and nothing to you.” Helping restore fairness costs you nothing, but can make a difference in helping resolve the dispute.
Many people often assume that innocent flirting in the business environment can’t hurt the deal, and maybe could even help. Imagine the sales representative trying to negotiate a new sale or the party negotiating a deal over real estate. In fact, in recent surveys, the majority of people have used flirting at one time or another to help achieve results in negotiations. However, the common belief that innocent flirting doesn’t hurt, may turn out to be wrong.
Recently, a study conducted by Berkeley professors Laura Kray and Connson Locke found that flirting during negotiations can have a detrimental effect. Kray and Locke had female and male actors play the roles of sellers of a biotech business. Half were told to be straight business and the other half were told to flirt while negotiating.
The study found that:
- Both male and female “buyers” offered the flirts substantially less, on average, than what they offered the straight business only sellers.
- The advantage for flirts, especially women, was that they were deemed more “likable.”
- The study also found that flirting did not affect other person’s perceptions of the flirter’s competence.
- On the other hand, the flirts were also found to be more manipulative and less authentic.
There are several implications for this research. First, if your objective is to be liked because you believe that will help you in negotiations, there are better ways to go about it than flirting. Flirting can seriously backfire and create possible interpersonal catastrophes.
Second, there is fine balance that is necessary for a negotiator to be considered trustworthy. Indeed, being trusted is critical for successful negotiators. Studies have shown that a lack of trust can destroy any meaningful negotiations. Although flirting may either positively or neutrally affect likeability and competence, it detrimentally affects the issue of credibility and thus should be avoided.
Finally, even in occasions where you do not intend to flirt, you should make sure to watch your body language to ensure that the other side does not accidentally interpret your actions as flirting. After all over 90% of communication is done nonverbally.
Kray, L and Locke, C, To Flirt or Not to Flirt? Sexual Power at the Bargaining Table, Negotiation Journal, October 2008, p. 483.