Barry Nalebuff

The reason for a negotiation is to do better than what they would get without an agreement. And the question is, how do you measure that? So let me give you a real world example. My mother had the opportunity to buy the house that she was renting from the person who she was renting it from. And if she did the transaction with him, there would be no real estate agent involved.

The reason for a negotiation is to do better than what they would get without an agreement. And the question is, how do you measure that? So let me give you a real world example. My mother had the opportunity to buy the house that she was renting from the person who she was renting it from. And if she did the transaction with him, there would be no real estate agent involved.

And therefore they could save a 5% real estate commission, which in this case was around $40,000. So the question is, how much of the $40,000 should my mother get and how much of it should the seller get? The seller could say, well, if you buy this kind of house from anybody else, you'd end up having to pay $800,000. So I should get the full $40,000 or you can pay $799,000.

And therefore they could save a 5% real estate commission, which in this case was around $40,000. So the question is, how much of the $40,000 should my mother get and how much of it should the seller get? The seller could say, well, if you buy this kind of house from anybody else, you'd end up having to pay $800,000. So I should get the full $40,000 or you can pay $799,000.

And therefore they could save a 5% real estate commission, which in this case was around $40,000. So the question is, how much of the $40,000 should my mother get and how much of it should the seller get? The seller could say, well, if you buy this kind of house from anybody else, you'd end up having to pay $800,000. So I should get the full $40,000 or you can pay $799,000.

And my mother could say in response, if you sell this house to anybody else, after the real estate commission, you're only going to get $760,000. So I'll give you $761,000 and I'll keep almost all of the $40,000. My view is that the negotiation here is over saving the $40,000 real estate commission. Each of them are equally powerful, equally necessary. And so they should split it $20,000, $20,000.

And my mother could say in response, if you sell this house to anybody else, after the real estate commission, you're only going to get $760,000. So I'll give you $761,000 and I'll keep almost all of the $40,000. My view is that the negotiation here is over saving the $40,000 real estate commission. Each of them are equally powerful, equally necessary. And so they should split it $20,000, $20,000.

And my mother could say in response, if you sell this house to anybody else, after the real estate commission, you're only going to get $760,000. So I'll give you $761,000 and I'll keep almost all of the $40,000. My view is that the negotiation here is over saving the $40,000 real estate commission. Each of them are equally powerful, equally necessary. And so they should split it $20,000, $20,000.

And so what happened? He agreed to that at the end of the day. Essentially, he said, well, it's a hot market. And so therefore, you know, I should be getting more of it. And the answer is the hot market is what determines the price from which we subtract the $20,000, not how it is that we divide up the $40,000.

And so what happened? He agreed to that at the end of the day. Essentially, he said, well, it's a hot market. And so therefore, you know, I should be getting more of it. And the answer is the hot market is what determines the price from which we subtract the $20,000, not how it is that we divide up the $40,000.

And so what happened? He agreed to that at the end of the day. Essentially, he said, well, it's a hot market. And so therefore, you know, I should be getting more of it. And the answer is the hot market is what determines the price from which we subtract the $20,000, not how it is that we divide up the $40,000.

I like even more the idea of starting off with the rules for how we'll negotiate. To say to the other side, can we agree?

I like even more the idea of starting off with the rules for how we'll negotiate. To say to the other side, can we agree?

I like even more the idea of starting off with the rules for how we'll negotiate. To say to the other side, can we agree?

that our objective is to create a large pie together and split it equally and understand is this the person who's going to be a jerk and says no my view is I want to engage in a zero-sum negotiation where I get as much as possible take advantage of you and the process shrink the pie or are they say yes great let's figure out how to make a big pie together that we can split and equally benefit from

that our objective is to create a large pie together and split it equally and understand is this the person who's going to be a jerk and says no my view is I want to engage in a zero-sum negotiation where I get as much as possible take advantage of you and the process shrink the pie or are they say yes great let's figure out how to make a big pie together that we can split and equally benefit from

that our objective is to create a large pie together and split it equally and understand is this the person who's going to be a jerk and says no my view is I want to engage in a zero-sum negotiation where I get as much as possible take advantage of you and the process shrink the pie or are they say yes great let's figure out how to make a big pie together that we can split and equally benefit from

It's true that a lot of people find emotions to be dominant when they're doing a negotiation. So I'm a little bit like Spock in the sense that I'm trying to bring some logic back into negotiations. And if you can combine Spock logic with Captain Kirk's emotional intelligence, you've really got it made.

It's true that a lot of people find emotions to be dominant when they're doing a negotiation. So I'm a little bit like Spock in the sense that I'm trying to bring some logic back into negotiations. And if you can combine Spock logic with Captain Kirk's emotional intelligence, you've really got it made.

It's true that a lot of people find emotions to be dominant when they're doing a negotiation. So I'm a little bit like Spock in the sense that I'm trying to bring some logic back into negotiations. And if you can combine Spock logic with Captain Kirk's emotional intelligence, you've really got it made.