The Four Horsemen of Negotiator Power
— September 12, 2017
By Joe Magee, Adam Galinsky and Michael Schaerer
At the bargaining table, a negotiator’s primary objective is to reach the best possible outcome, be it a higher salary, additional accessories when purchasing a car, or acquiring a company at a lower price. No matter what one negotiates about, the single most reliable predictor of the outcome is the amount of power one has. Although having power is important for many reasons, there are two fundamental ways in which power benefits negotiators.
Power transforms people into bold negotiators
The first benefit of power is that it emboldens individuals, making them more confident, optimistic and proactive. Power increases the probability that people consider negotiating in the first place due to higher feelings of entitlement and confidence that a positive result can be achieved. Those who have power also set higher aspiration prices, make more ambitious first offers and claim more value from their opponents. This is important because the size of the first offer and which party moves first or second in a negotiation both influence the quality of the outcome. Indeed, research has shown that those who have more power are more likely to make the first offer in a negotiation and end up with better deals.
Read the full article as published in INSEAD Knowledge.
Joe Magee is an Associate Professor of Management and Organizations.