The Other Person’s Choices Open Access

When analyzing a remarkable action taken by a great negotiator, it is natural to ask whether some insight from the action might apply to other contexts. In particular, for those of us who may not be great negotiators, is there a lesson that we might apply in some future negotiation? This note analyzes an interaction between Charlene Barshefsky, a U.S. trade negotiator, and a Chinese negotiator. Barshefsky describes the interaction in a video discussed in this issue; it is also examined in a Harvard Business School case (Sebenius, Hulse, and Mathews 2001). My analysis is strictly from a game‐theoretic perspective—that is, it focuses only on the players’ actions and the consequences of those actions. This perspective yields the following insight: when confronted with a decision you don’t like, consider creating moves for the other player. This insight is consistent with the well‐known negotiation tactic of allowing the other party to save face. More generally, this insight can be viewed as a natural complement to the notion of commitment emphasized by Schelling (1956). But this complement differs in one significant way: whereas Schelling’s commitment moves focus on what you can do, creating moves for the other player focuses on what the other party can do. For this reason, the note closes with the hypothesis that perspective taking skills may be one of the fundamental sources of Barshefsky’s ability to change the situation in a favorable way.

For readers who do not have access to the video, I use the description from the Charlene Barshefsky (B) case. Charlene Barshefsky has been confronted with a take‐it‐or‐leave‐it offer from a Chinese negotiator. She responds to this offer by saying:

To understand the strategic content of this response, it is useful to analyze the situation both before and after Barshefsky acts. The game tree depicted below in Figure One portrays the situation before her response.

The game tree shows the Chinese negotiator moving first and making the take‐it‐or‐leave‐it offer. We do not know what other actions the negotiator might have taken, so in the tree, there is just one other option, with an unknown consequence (depicted with a question mark). If Barshefsky accepts the offer, I assume that the Chinese negotiator captures a lot, as represented by a payoff of three, and that she captures a little, as represented by a payoff of one. If Barshefsky rejects the offer (Leave it), then there is no deal, and each player captures zero. (The magnitude of the payoffs is somewhat arbitrary. The payoffs of three and one are used to represent a lopsided deal in favor of the Chinese negotiator.)

With Barshefsky’s response, the strategic situation is depicted below in Figure Two.

I assume that continuing the negotiation is preferable to a no‐deal outcome, so if the Chinese negotiator (CN) agrees with Barshefsky, his payoff needs to be less than the three he just proposed and greater than the no‐deal value of zero. A value of two suffices. Similarly, I assume that this agreement will be better for Barshefsky than the CN’s original offer was, so her payoff needs to be greater than one. A value of two again suffices. As Figure Two shows, Barshefsky’s rejection of the original offer no longer necessarily ends the game with an undesirable outcome for both players. Instead, the CN can choose whether to keep negotiating. Because continuing the negotiation is assumed to be preferable to a no‐deal outcome, Barshefsky’s move should—and, in fact, did—succeed.

The game tree in Figure Two shows that Barshefsky changed the situation by creating a move for the other player. Thus, we have the prescriptive advice mentioned at the beginning: when confronted with a decision you don’t like, consider creating moves for the other player. In their case, Sebenius, Hulse, and Mathews describe Barshefsky’s move as “a face‐saving escape hatch.” This description is a reminder that in the specific context of creating face‐saving moves, the advice to create moves for the other player is well‐established in the negotiation field.

For instance, in the book Getting Past No, there is a chapter titled “Build Them a Golden Bridge,” with a subsection titled “Offer Them a Choice” (Ury 1993). For a more historical reference, “build them a golden bridge” is based on an excerpt from the Art of War, in which Sun Tzu’s advice is to generate an escape option for the opponent (Tzu 2011: Chapter 7). The case writers’ use of the term “escape hatch” demonstrates that Barshefsky’s move could certainly be interpreted as generating a “golden bridge” for the other party.

In the context of creating moves more generally, not just face‐saving or escape‐option moves, the notion of commitment provides a complementary perspective. Schelling provides examples in which commitment moves may be beneficial to a given party. He defines commitment as a “…voluntary but irreversible sacrifice of freedom of choice” (Schelling 1956: 282). In other words, commitment involves limiting your options. Quite simply, if it can be beneficial to limit your own options, then shouldn’t there be situations in which it is beneficial to expand the other’s options? The Barshefsky vignette confirms this notion. Thus, creating moves for the other player can be viewed as a natural complement to eliminating your own moves.

In fact, Schelling was probably aware of this fact. He wrote: “If one can demonstrate to an opponent that the latter is not committed, or that he has miscalculated his commitment, one may in fact undo or revise the opponent’s commitment” (Schelling 1956: 282). Demonstrating that the opponent is not committed has the effect of adding back a choice for the opponent. This “adding back” of a choice can be viewed as creating a move for the other player.

Note that Barshefsky didn’t just create a move for the other player—she also employed a commitment strategy by eliminating the possibility of accepting the CN’s offer. This is clear from her choice of words. The “of course I’ll leave it” phrase is the commitment move, while the “I think what you meant” phrase creates the move for the other party. To see the effect of the commitment in a game tree, consider Figure Three below. The game tree includes a more detailed analysis of what would happen if the CN disagreed with Barshefsky’s reinterpretation. By committing to “leave it,” the consequence of accepting the negotiator’s original offer is now worse than no agreement. Barshefsky’s loss of credibility and reputation now outweigh the small gains from accepting the deal. (I represent this with a payoff of negative one. Any payoff worse than the original no‐deal payoff of zero would suffice.) Thus, she would reject the deal if the CN did not agree to her reinterpretation.

Charlene Barshefsky altered an undesirable take‐it‐or‐leave‐it situation by creating a move for her negotiating partner. More generally, creating moves for others can be viewed as a logical counterpart to eliminating your own moves. From a game‐theoretic perspective, the interesting contrast in this pairing would be the addition of moves versus the elimination of moves. But from a negotiation perspective, the interesting contrast might be the change of focus—from what you can do to what the other party might do. Thus, the game‐theoretic advice to consider what moves you can create for the other party implicitly relies on a fundamental negotiation skill: the ability to take the other party’s perspective. In the video of Barshefsky’s interaction, we see her perspective‐taking in action. In describing her reaction to the negotiator’s offer, she says, “He knew he’d made a mistake.” However stressful the situation may have been for her, she was able to maintain the ability to view the other party’s perspective. Consequently, she may have used that ability to devise a solution that utilized the other party’s perspective—namely, a move for the other party.