How belief in free will can get you a better bargain
“We’re sorry, but this is the best we can do …”
It’s a common response we hear from the hiring manager during interview negotiations. The internal dilemma follows: Do I continue to persist, or should I accept their less-than-ideal offer? A team of researchers led by Dr. Anyi Ma from Duke University set out to explore the idea further.
Ultimatums can often produce optimal results for the employer, which is why over 90% of negotiators use them. The team of researchers began to question whether the effectiveness of this technique could be diminished, thus benefiting the person on the other side of the bargaining table. They hypothesized that developing a choice mindset would allow an individual to look past the ultimatum and push on.
A choice mindset is a state of mind that places a higher value on free will. Individuals with this mindset are more likely to believe that, no matter what the situation is, there’s always a choice. These individuals ascribe higher agency to themselves and others, thus believing that every action is intentional.
We’ll come back to this in a moment.
Overcoming the effects of an ultimatum
Ultimatums can be a persuasive tool to convince you to agree to the terms on the table. They indicate that there isn’t any room left to negotiate. Additionally, a study showed that negotiators who use ultimatums such as “this is the best I can do” are seen as more trustworthy, helpful, cooperative, and less aggressive or selfish. Thus, ultimatums can mislead you to believe that a negotiator has your best interest at heart or that any offer he or she gives you is an honest attempt to make you happy with the outcome.
In most cases, however, there’s more to an ultimatum than meets the eye. What if you push back against these statements? And how does one get comfortable doing so?
Back to choice mindset.
Dr. Ma and her team hypothesized that having a choice mindset may lead people to believe that the person they’re negotiating with has multiple courses of action, or ‘choices’. In turn, they are less likely to believe a negotiator’s ultimatum claiming they can’t make any more concessions. This would potentially translate into greater persistence during negotiations and improved outcomes. A series of experiments were performed to examine how a choice mindset can affect a person’s performance (and outcomes) during a negotiation.
The study and findings
The researchers proposed the following hypotheses:
Hypothesis 1a: Negotiators in a choice mindset believe that there is more room to negotiate compared to those in a constraint mindset.
Hypothesis 1b: Upon receiving an ultimatum, negotiators in a choice mindset would be more willing to persist compared to those in a constraint mindset.
Hypothesis 2: An individual’s perception of how much room is available to negotiate (e.g. whether the other party is open to further discussing the conditions of a potential deal) can affect the link between choice mindset and their willingness to persist following an ultimatum.
Hypothesis 3: Negotiators in a choice mindset achieve better outcomes than negotiators in a constraint mindset.
The first study examined hypothesis 1a. Five-hundred and nine participants were randomly assigned to a choice mindset condition or a constraint mindset condition. Participants in the choice condition were instructed to think about the various choices they made throughout the previous day. As a matched control, participants in the constraint mindset condition were instructed to reflect on the previous day and think about every time they did something, whether they wanted to or not.
Each participant was asked to assume the role of a new recruit and urged to negotiate on issues such as number of vacation days and amount of work-related travel. Participants were then given a survey with questions such as “How much room do you think there is to negotiate?” Responses were assessed using a seven-point scale and ranged from not at all to extremely. The result of this experiment showed that individuals in a choice mindset were more likely to believe that there would be more room to negotiate.
The second study tested hypothesis 1b. This assessed whether negotiators in a choice mindset – compared to those in a constraint mindset - would be more willing to persist past an ultimatum. Three-hundred and seventeen participants were randomly assigned to either mindset condition.
Participants were then presented with a lengthy interaction between themselves and the employer. This interaction ended with the employer saying, “This is really the best I can offer, take it or leave it.” Following this, participants responded to a survey that assessed the extent to which the participants were willing to persist after an ultimatum.
The results of the second study showed that participants in the choice mindset were more willing to persist in a negotiation after their counterpart issued an ultimatum. Rather than accepting or rejecting the ultimatum, negotiators in a choice mindset were more likely to ignore the ultimatum and continue negotiating.
The third and fourth study were designed to test hypothesis 2. The third study consisted of the same hiring scenario as the previous study, as well a choice mindset and constraint mindset prime manipulation. Two-hundred and fifty-six participants were randomly assigned to either condition. Each participant was presented with an interaction between themselves and the employer that ended with an ultimatum. They measured the extent to which the ultimatum was ignored or accepted.
In the fourth study, participants in the two conditions were told they would be negotiating with a real person, through a computer. In reality, all responses were issued by the computer itself. During the negotiation, participants were issued an ultimatum on round 1, 3 and 5. Participants weren’t aware, but if an agreement wasn’t met by the 6th round, negotiations ended.
The results from the third and fourth study provided support for hypothesis 2. That is, the link between choice mindset and willingness to ignore an ultimatum was affected by one’s perception of how much room is available to negotiate.
The fifth study consisted of a used car negotiation. This was designed to test hypothesis 3 which proposed that negotiators in a choice mindset achieve better outcomes than negotiators in a constraint mindset. Participants were randomly assigned as a buyer or a seller. Buyers were further assigned to either the choice or constraint condition. Buyers were told not to pay more than $58,000 for the car. Sellers were told not to sell the car for less than $52,000.
The results of this study showed that buyers in the choice condition bought the car at a significantly lower price than buyers in the constraint condition. In other words, people primed with a choice mindset got the better deal.
Overall, these studies showed that negotiators in a choice mindset are more willing to persist following an ultimatum, allowing them to attain a better outcome.
Results applied: Be persistent during negotiations
Develop a choice mindset
As previously mentioned, a choice mindset can encourage you to persist following an ultimatum, which can lead to a superior outcome. A choice mindset can be primed by reflecting on past choices.
Within the last week, was there a situation that made you upset or frustrated? If so, write it down. If not, think further back.
Now, write down every choice you made that may have contributed to this situation.
Next to each individual choice, write an alternative choice that could have been made.
Take a moment to read what you wrote and ask yourself: If you had made different choices, would this situation have been different?
The goal here is to develop a state of mind that allows you to understand the power of choices.
Know your BATNA
BATNA stands for best alternative to a negotiated agreement. It provides an alternative if negotiations are unsuccessful and allows you to determine the lowest offer you’re willing to accept. For example, let’s pretend you’re negotiating a contract for a new job. Your potential employer says you will need to travel 40% of the time. However, another potential employer offered you 20% travel time. In this case, 20% is your BATNA. You will not accept an offer with more than 20% travel time.
Entering a negotiation with a clear goal in mind can be essential to your success. Unsurprisingly, negotiators with a better BATNA tend to perform better overall. Here are a few tips for creating a BATNA:
Create at least two: your BATNA will constantly change. For example, the alternative job offer that served as your reservation point may fall through. Your BATNA should be updated every time your situation changes.
Research the other party’s BATNA: It’s helpful to know where the other party stands. For example, if there is a large pool of other candidates applying for the same job, you may have to adjust your BATNA.
Negotiate with a level head
Negotiations can be anxiety-inducing. This anxiety can drastically affect the likelihood of walking away with a good outcome. A study showed that when you enter a negotiation with high anxiety, you’re more likely to make a lower first offer, expect a lower outcome, respond more quickly to an offer, leave the bargaining table too soon, and obtain a worse outcome overall. In other words, it’s hard to be persistent during a negotiation when you’re too anxious. Luckily, you can combat this anxiety using the following techniques:
Stimulate your vagus nerve: The vagus nerve is a cranial nerve that is connected to your parasympathetic nervous system, also known as the ‘rest and digest’ system. Activating this nerve has been shown to reduce anxiety. There are multiple ways to activate the vagus nerve, such as taking a cold shower or chanting the word ‘OM’.