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When Not to Negotiate
Gabriella Blum & Robert H. Mnookin*
Editors’ Note: “I shouldn’t enter into negotiations at all” is an instinctive reaction of many disputants. Mnookin and Blum provide a useful theoretical framework to demonstrate what a party should consider before making this decision. While they suggest that sometimes it can be entirely rational to refuse to negotiate, their framework shows how disputants may often make distorted assessments, exaggerating the costs and underestimating the benefits of entering into negotiations.
This chapter is republished from the same editors’ Negotiator’s Fieldbook (American Bar Assoc. 2006). We appreciate the ABA’s courtesy in agreeing to this republication. Although this chapter was not updated for the NDR, we believe it continues to be a unique and valuable resource. Some formatting has been updated; the text of the chapter and the authors’ bios are unaltered.
The negotiation canon largely focuses on the benefits of the process, particularly when compared to more coercive means of dispute resolution. While conflicts characteristically involve distributive dimensions, negotiation—in contrast to litigation or warfare—provides value-creating, pie-expanding opportunities. Accordingly, negotiation scholars, drawing from a variety of disciplines, have set out to identify and offer prescriptive advice to overcome various barriers to the negotiated resolution of disputes.
We certainly agree that there are a variety of potential benefits that parties can only achieve if they enter into negotiations. The most conspicuous potential benefit is a resolution of the conflict that serves the interest of both parties to better their alternatives. Moreover, even if an agreement is not reached, the parties may through negotiation reduce the total costs of resolution, learn valuable information, sharpen their understanding of their own interests as well as those of their counterpart, and even improve their relationship. At the same time, however, we feel that the literature has often ignored the possible costs of entering into and conducting negotiations. Indeed, the negotiation process itself is not costless and it often entails risks. This inevitably raises the question that we wish to address in this chapter: how should a party to conflict decide whether the benefits of negotiation outweigh the costs? Sometimes these potential costs outweigh the potential benefits. In such circumstances, a rational party should refuse to negotiate, and instead, pursue a unilateral alternative.
Our goal here is to offer a decision-making framework that exposes the relevant considerations, both benefits and costs, that a party should appropriately take into account in thinking whether or not to enter a negotiation process. We then wish to use the same framework to expose the risk that parties to a conflict may too often go through the calculus in a biased way and refuse to negotiate in circumstances when in fact it might well make sense. Finally, we will show how the design of institutional arrangements may affect the relative costs and benefits of a refusal to negotiate, thus influencing parties’ decision about whether to negotiate.
The focus of this chapter is on the decision whether or not to enter into a negotiation in the first place, and not decisions about the scope of a negotiation (what issues are “on the table” and what other issues are “non-negotiable”), or tactics within a negotiation that involve claims that one will negotiate no further.[1] For purposes of this current work, we define negotiation as a joint decision-making process involving interactive communication in which parties lack identical interests but attempt to reach agreement.[2] This definition requires active communication, as well as a mixed-motive game, in which not all interests are aligned.
A Framework for Decision-Making
While negotiation involves joint decision-making, the decision whether to enter into negotiation or instead pursue some other alternative can be framed in terms of decision analysis, [Senger, Risk] in which a decision-maker independently assesses the expected costs and benefits of negotiation and its alternatives. As we noted above, many negotiation scholars have emphasized the potential benefits of negotiation, without due regard to its potential costs.
At the outset we wish to acknowledge that performing the cost-benefit analysis of entering into a negotiation is a challenging task for three reasons: (1) The consequences of different actions are inevitably marked by uncertainty: there is always some uncertainty surrounding the estimation of short and long-term costs and benefits of negotiation, as well as the potential costs and benefits of the disputant’s alternatives to negotiation. ….
For full contents please purchase The Negotiator’s Desk Reference.
Endnotes
*(from The Negotiator’s Fieldbook, ABA 2006)
Gabriella Blum is Learned Hand Visiting Assistant Professor at Harvard Law School, teaching and researching International Law and International Negotiations. Blum studied law and economics at Tel-Aviv University, and then served for five years as a Senior Legal Advisor in the International Law Dept., Military Advocate General’s Corps, Israel Defense Forces, advising military and other government branches on international legal issues and working on the peace negotiations between Israel and its Arab neighbors. Subsequently, she studied at Harvard for LL.M. and SJ.D. degrees, served another year in the IDF, specializing in counter-terrorism, and was then appointed as Strategic Advisor to the Israeli National Security Council. While at the NSC, she taught negotiation at the College of Management and Tel-Aviv University.
Robert H. Mnookin is the Samuel Williston Professor of Law at Harvard Law School, where he chairs the Program on Negotiation and directs the Harvard Negotiation Research Project. He has written or edited numerous scholarly articles and nine books, including Beyond Winning: Negotiating to Create Value in Deals and Disputes (with Scott Peppet and Andrew Tulumello) and Barriers to Conflict Resolution, a joint project with members and associates of the Stanford Center on Conflict and Negotiation. Professor Mnookin has applied his interdisciplinary approach to negotiation and conflict resolution to a remarkable range of problems, both public and private, as a neutral arbitrator and mediator and as a consultant to governments, international agencies, major corporations and law firms.
This chapter draws on and extends earlier work, a portion of which was previously published as Robert H. Mnookin, When Not to Negotiate: A Negotiation Imperialist Reflects on Appropriate Limits, 74 University of Colorado Law Review 1077 (2003).
[1] Refusals to negotiate can often simply be a tactic that is used as part of the negotiation process. See id. at 1081-82.
[2] The term “negotiation” is hardly self-defining. Negotiation scholars have defined “negotiation” in a variety of ways. See id. at 1079-80 for a discussion of the definitional issues.
This chapter is republished from the same editors’ Negotiator’s Fieldbook (American Bar Assoc. 2006). We appreciate the ABA’s courtesy in agreeing to this republication. Although this chapter was not updated for the NDR, we believe it continues to be a unique and valuable resource. Some formatting has been updated; the text of the chapter and the authors’ bios are unaltered.
The negotiation canon largely focuses on the benefits of the process, particularly when compared to more coercive means of dispute resolution. While conflicts characteristically involve distributive dimensions, negotiation—in contrast to litigation or warfare—provides value-creating, pie-expanding opportunities. Accordingly, negotiation scholars, drawing from a variety of disciplines, have set out to identify and offer prescriptive advice to overcome various barriers to the negotiated resolution of disputes.
We certainly agree that there are a variety of potential benefits that parties can only achieve if they enter into negotiations. The most conspicuous potential benefit is a resolution of the conflict that serves the interest of both parties to better their alternatives. Moreover, even if an agreement is not reached, the parties may through negotiation reduce the total costs of resolution, learn valuable information, sharpen their understanding of their own interests as well as those of their counterpart, and even improve their relationship. At the same time, however, we feel that the literature has often ignored the possible costs of entering into and conducting negotiations. Indeed, the negotiation process itself is not costless and it often entails risks. This inevitably raises the question that we wish to address in this chapter: how should a party to conflict decide whether the benefits of negotiation outweigh the costs? Sometimes these potential costs outweigh the potential benefits. In such circumstances, a rational party should refuse to negotiate, and instead, pursue a unilateral alternative.
Our goal here is to offer a decision-making framework that exposes the relevant considerations, both benefits and costs, that a party should appropriately take into account in thinking whether or not to enter a negotiation process. We then wish to use the same framework to expose the risk that parties to a conflict may too often go through the calculus in a biased way and refuse to negotiate in circumstances when in fact it might well make sense. Finally, we will show how the design of institutional arrangements may affect the relative costs and benefits of a refusal to negotiate, thus influencing parties’ decision about whether to negotiate.
The focus of this chapter is on the decision whether or not to enter into a negotiation in the first place, and not decisions about the scope of a negotiation (what issues are “on the table” and what other issues are “non-negotiable”), or tactics within a negotiation that involve claims that one will negotiate no further.[1] For purposes of this current work, we define negotiation as a joint decision-making process involving interactive communication in which parties lack identical interests but attempt to reach agreement.[2] This definition requires active communication, as well as a mixed-motive game, in which not all interests are aligned.
A Framework for Decision-Making
While negotiation involves joint decision-making, the decision whether to enter into negotiation or instead pursue some other alternative can be framed in terms of decision analysis, [Senger, Risk] in which a decision-maker independently assesses the expected costs and benefits of negotiation and its alternatives. As we noted above, many negotiation scholars have emphasized the potential benefits of negotiation, without due regard to its potential costs.
At the outset we wish to acknowledge that performing the cost-benefit analysis of entering into a negotiation is a challenging task for three reasons: (1) The consequences of different actions are inevitably marked by uncertainty: there is always some uncertainty surrounding the estimation of short and long-term costs and benefits of negotiation, as well as the potential costs and benefits of the disputant’s alternatives to negotiation. ….
For full contents please purchase The Negotiator’s Desk Reference.
Endnotes
*(from The Negotiator’s Fieldbook, ABA 2006)
Gabriella Blum is Learned Hand Visiting Assistant Professor at Harvard Law School, teaching and researching International Law and International Negotiations. Blum studied law and economics at Tel-Aviv University, and then served for five years as a Senior Legal Advisor in the International Law Dept., Military Advocate General’s Corps, Israel Defense Forces, advising military and other government branches on international legal issues and working on the peace negotiations between Israel and its Arab neighbors. Subsequently, she studied at Harvard for LL.M. and SJ.D. degrees, served another year in the IDF, specializing in counter-terrorism, and was then appointed as Strategic Advisor to the Israeli National Security Council. While at the NSC, she taught negotiation at the College of Management and Tel-Aviv University.
Robert H. Mnookin is the Samuel Williston Professor of Law at Harvard Law School, where he chairs the Program on Negotiation and directs the Harvard Negotiation Research Project. He has written or edited numerous scholarly articles and nine books, including Beyond Winning: Negotiating to Create Value in Deals and Disputes (with Scott Peppet and Andrew Tulumello) and Barriers to Conflict Resolution, a joint project with members and associates of the Stanford Center on Conflict and Negotiation. Professor Mnookin has applied his interdisciplinary approach to negotiation and conflict resolution to a remarkable range of problems, both public and private, as a neutral arbitrator and mediator and as a consultant to governments, international agencies, major corporations and law firms.
This chapter draws on and extends earlier work, a portion of which was previously published as Robert H. Mnookin, When Not to Negotiate: A Negotiation Imperialist Reflects on Appropriate Limits, 74 University of Colorado Law Review 1077 (2003).
[1] Refusals to negotiate can often simply be a tactic that is used as part of the negotiation process. See id. at 1081-82.
[2] The term “negotiation” is hardly self-defining. Negotiation scholars have defined “negotiation” in a variety of ways. See id. at 1079-80 for a discussion of the definitional issues.