The Difference Between Positional and Interest Based Bargaining

Central to this blog is the profound difference between Positional aka win-lose and Interest Based aka win-win Bargaining. I posted on this last year:

https://creativeconflictwisdom.wordpress.com/2010/12/09/the-top-ten-differences-between-positional-and-interest-based-bargaining/

In a nut shell, in conflict we adopt almost instant positions or demands. This is positional thinking and we set out to ‘win’. Interest-based approaches in contrast suggests we challenge our own positions and ask ‘why?’. ‘Why do we want that?’ We set out to look for win-win possibilities. It is much easier to reach a good outcome in conflict, if we interrogate our interests and seek to meet those, rather than dig into our positions and try to ‘win’. Which often results in what the Romans said: Eremus pacem fecerunt et invocabant’ aka ‘they made a wasteland and they called it peace’.

I have been making very successful multi-million dollar conflict deals that were in both sides’s interests, are sustainable, and which build the on-going relationship, in the 25 years since I first used interest-based bargaining to dig my company out of a riot. But I rarely can get anyone else to look at conflict through the lens of their interests until they have suffered disaster and have no alternative: ‘now what?’

So it  sometimes feels like I waste my breath. Writing this to you dear reader. The resistance to moving from Positional Thinking to Interest Based thinking is overwhelming. It often seems impossible in conflict situations for most people to make the journey.

Why is this? Why do very smart people stick to Positional Thinking until catastrophe happens? Why do they want to take a self-righteous stand and be prepared to go to war to sustain it, regardless of their interests? Von Clausewitz cautions on how unpredictable the outcomes of wars are, but we wage them at the personal and national level nevertheless. We seem to be an inherently positional species.

One way to explore this is via one interesting development in neuroscience: the recognition that something like 95% of our mental processing is automatic and unconscious.  Keith Stanovich invented the distinction between TASS, The Autonomous Sensory System and ACS, the Analytical Control System in his ‘Robot’s Rebellion’. Howard Margolis elaborated on it in his ‘Patterns, Thinking and Cognition‘ and Jon Haidt took it further as the Elephant and the Rider metaphor in his forthcoming ‘Righteous Mind’ and now in his latest book ‘Thinking Fast and Slow’, Nobel Prize winner Daniel Kahneman is calling it System 1 and System 2.

Essentially our TASS/Elephant/System 1 is a pattern recognition device that instantly evaluates a situation for its upside and downside to us. This is an essentially positional process and is intensely self righteous. Indeed, it usually recruits our conscious ACS/Rider/System 2 not to improve the quality of its pattern recognition, but as a sort of attorney or PR manager. System 1 uses all the smarts of System 2 to justify the pattern recognition we have automatically achieved, and to defend any actions, decisions based on this automatic process. In a social species, there must have been more evolutionary advantage in appearing right, which is easier if we believe we are right, than actually being right. Hence Positional Bargaining is an automatic, TASS/Elephant/System 1 default that requires major effort to over-ride.

Kahneman has a famous case that illustrates the power of our TASS/Elephant/System 1, our automatic pattern recognition. Try it out.

Linda is 31 years old, single, outspoken and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.

Which alternative is more probable?

A. Linda is a bank teller

B. Linda is a bank teller and active in the feminist movement

Approximately 85% of Harvard undergraduates pick alternative B, even though it is logically impossible for it to be more probable that Linda is a feminist bank teller than just a simple bank teller. i.e. feminist bank teller is a subset of all bank tellers. A fair number of undergraduates deny this answer even when the logic is pointed out.

Perhaps this is why positional bargaining is so hard. We find it almost impossible to override our automatic pattern recognition when it screams ‘we are right, they are wrong‘ and ask ourselves the simple question: what is in our interests? We know Linda is a feminist bank teller! It is obvious she is not a boring non-feminist bank teller, but we are not being asked to judge the latter, only feminist bank teller versus all bank tellers.

It takes wars, intense suffering, extensive loss before our TASS/Elephant/System 1 comes round to questioning it’s knee jerk pattern recognition and self-righteousness. I found the same in labor relations: the management and unions had to suffer real losses before their ACS/Rider/System 2s were given a hearing. Which really sucks. The Seven Step Creative Conflict Model behind this blog is an attempt to tame the Elephant and direct her/him in the direction of his/her long term real interests, not the instant often delusional self righteous take on the conflict we face.

The Elephant is in control, is the Rider most of the time:

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About creativeconflictwisdom

I spent 32 years in a Fortune Five company working on conflict: organizational, labor relations and senior management. I have consulted in a dozen different business sectors and the US Military. I work with a local environmental non profit. I have written a book on the neuroscience of conflict, and its implications for conflict handling called Creative Conflict Wisdom (forthcoming).
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2 Responses to The Difference Between Positional and Interest Based Bargaining

  1. Kyrie Eleison says:

    It’s a tough position to take since most people would put forth the idea that from the very beginning you put yourself behind the 8-ball in employing this technique. It’s not true of course, and is very egocentric to think this way – being conditioned to always think the worst of someone else (or maybe to only think of oneself) when conflicts arise.

    I think it may very well be a cultural phenomenon, regarding what resolution method one decides to use. People tend to be a product of their environment. If that environment is cooperative, then one could expect that most would be inclined to get along with one another, be willing to listen, and work together. If it is competitive, then one could expect that most would draw lines in the sand, plant flags, go forth and conquer (or be conquered).

    In my opinion, this mindset translates into everything we do, whether we realize it or not. For example, when we trade with one another, do we approach the situation on the assumption that the transaction should be one of mutual benefit and an equal exchange of value? Or is it one where we tend to overvalue our own contribution while undervaluing the other person’s in order to get a “fair” deal? That sounds like a conflict just waiting to happen.

    Perhaps I should elaborate a little. Suppose two different people purchase some widget for $100. One person is a wage-laborer who performs a large amount of very difficult work in order to earn that money. The other person is an investor who collects that money in dividends or interest earned on savings over an equal time period. Do both buyers place the same value on said widget? It cost them both the same amount of money: $100.

    Could one put forth the argument that perhaps the laborer is undervalued, while the investor is overvalued in this example? Or is it the other way around? I wonder how differently each “side” would view things if put in the position of the other. Would the value placed on the widget change with circumstance?

    Without considering the background of both sides I don’t think these questions would even come up for consideration – we’d just focus on the widget itself. It’s far too easy to become entrenched in our own interests and points of view that it becomes nearly unconscionable to see things in any other way.

    Another example would be the case of Easter Island, which may well be a miniature version of events to come. It may have started out as a very cooperative environment, when resources were plenty. As time went on, though, maybe it became easier to construct large stone monuments in the hopes that some supernatural being would deliver them from peril instead of looking inward on their own actions and attitudes to save themselves.

    So, to address the above directly, in my view it is essential to focus on interest based bargaining. Anything that is based solely on win-lose is not really solving the problem, it is just an elaborate exhibition of arrogant dominance while kicking the can down the road for the same problems to just keep resurfacing over and over again. An elephant never forgets.

    • @Kyrie. Great comment. I have actually negotiated with people who I really disliked: some called them Neo-Nazi, union members who were holding my company to ransom. They could cost us about $50 million a day. I hated everything they stood for, but nevertheless managed to build a good relationship with them. I listened to them and understood perfectly their point of view without ever agreeing with it. So I could bargain with them on an interest based approach and for 30 months we kept on a knife edge over an issue and never fell off. At one time, I was the only person these union guys would talk to on the Company side. Yet at one time in private I was also able to say to their leader: ‘you have immense power to damage our company but you know it is a like a nuclear bomb: you will only use it once and then next time the market is down and we don’t need production, we will annihilate you.’ Their leader smiled and said nothing. We understood each other. When I left he told me that none of my predecessors had tried so hard to understand them, or spoken so bluntly about the reality they faced. He said he respected me and in a way, I respected him.

      Easter Island is interesting. Jared Diamand thinks that it was a status competition that drove the deforestation and the stone figures: competing to impress the Gods. I find it hard to imagine you would destroy your society for this, but I guess that is exactly what we are doing with our SUVs etc. I inherited from my Dad a complete disinterest in what other people have relative to me and much positional thinking is some sort of status competition, which personally leaves me cold. We share a planet and even the Israelis and Palestinians have a shared interest in it continuing to exist, but you would not think so from their rhetoric.

      And of course, interest based bargaining aims to meet our interests! Not our knee jerk positions….

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