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Negotiation psychology: test yourself (the answers)

 In Business decisions, Insights, Negotiating, Realizer Blog

Here are the answers to our negotiation quiz. If you haven’t seen the quiz go back here to answer it first.

Answers in bold, and explanations are in the third column.

 

 

Question 1

You walk into a room, about to start a difficult negotiation. What’s the best thing to do when you see your counterpart(s)?

A. Establish your power by giving a firm handshake and a penetrating stare

B. Start by finding something to agree on like, “this is a nice room, don’t you think?”

C. Wait for them to say something

Answer B. The insight: Instead of identifying and starting with areas of disagreement, it can create positive psychological momentum if you start with small things you agree on. Even down to the weather.

 

Question 2

Two people have been negotiating and you’ve noticed that one has been doing more of the talking and one has been much more quiet. Who is most likely to achieve their goals?

A. The talker: Talking is important; you can’t persuade people if you don’t talk

B. The listener: Understanding their position, and tailoring your strategy accordingly, is more persuasive.

C. It depends on body language more than words

Answer B. The insight: Although the movies portray negotiations as talkers, persuaders and influencers it’s more likely that good negotiators move beyond pushing their own position to working out what the other party really wants, sometimes called their underlying need(s). This can then be used to develop more creative, win-win solutions.

 

Question 3

You’ve had an initial meeting and now it’s time for one party to name a price. Should you be the one to make the first offer?

A. Yes, make the first offer

B. No, wait for them to make the first offer

C. It depends on your knowledge of the market

Answer C. The insight: The anchoring effect is a psychological bias where any information, even a random number, can influence what happens next. In negotiations, there is often an advantage to being the first to name a price – but this only works if you have enough knowledge of the market to make an offer which is in the zone of reality. If you drop an anchor which is way too high/low you risk losing goodwill and credibility.

 

Question 4

You’ve been looking for a house for a while and you’ve finally found one for sale which you have fallen in love with. But you have to get it within your budget. What’s the best strategy?

A. Tell the real estate agent you’ve fallen in love with it and put an offer on the table

B. Double down your efforts to find another house you also love

C. Put an offer on the table with a strict time limit

Answer B. The insight: A lot of the power in a negotiation comes from who has the best plan B, sometimes called a BATNA (best alternative to a negotiated agreement). So the best way to help you get that house without breaking your budget is to find yourself a plan B, another great house – and not be blinded by love for the first house.

 

Question 5

The house has gone to auction. What’s the best thing you can do to maximize your chance of getting the house within your budget?

A. Try and influence other bidders not to go over their budget by coming in late and looking like you have bottomless pockets

B. Assume that other people will pick a round number for their budget so pick a number for your budget which is slightly more than a round number, like $1,527,000

C. Hire a professional bidder

Answer A. Insight: All three of these strategies are worth a try. It always amazes me how people who have never even negotiated for a TV at Bing Lee rock up on Saturday afternoons ready to negotiate $1.5m (and a 30-year mortgage) with no real strategy. All things being equal, your best bet is to set and stick to your limit and then do everything you can to stop everyone else breaking their limit – the reason why real estate agents love auctions is that people bid higher than they would do otherwise just because they observe what other people are doing.

 

Question 6

It’s a big negotiation and you’re in the room with your boss and a colleague. What is the best way of working together as a team?

A. Specialize roles – listener vs speaker vs observer

B. “Man marking” – each person build rapport with one of them

C. Help each other out when your colleague makes a false step

Answer A. Insight: This is a tip taught to me by a very experienced negotiator. When in a negotiation with multiple people on your side, make sure you have clearly defined roles for each person. Often the best bet is for one to act as the mouth (speaker, presenting persuasive arguments), one to act as the ears (the listener, picking up the exact words being used by the other party, working out their underlying needs) and one as the eyes (focusing on body language for extra clues around who’s in charge and how they react to proposals). Using this technique allows your team to pick up considerably more information from the other party, especially when you have time outs to review what you’ve gleaned.

 

Question 7

Your counterparty has just named their offer over the phone. You go silent. What are they likely to do?

A. Ask you to give a counter offer

B. Give you a better offer

C. Go silent too

Answer B. Insight: Going silent is a deliberate and surprisingly aggressive tactic. It can be interpreted as disappointment. And therefore, it can trigger the speaker to better their own offer. Without you saying anything. This strategy is not recommended unless you have a reasonably powerful position and are comfortable being more aggressive.

 

To find out more

These 7 psychological tips are the tip of the negotiation iceberg. Negotiation is a very complex process, involving many skills from emotional intelligence, persuasiveness, analytics, math, resilience, decisiveness, risk-taking and more. And that’s why it’s one of the most challenging and rewarding areas to learn. We’ve been lucky enough to teach several hundred people our negotiation process and tips. What are your best tips? Leave them in the comments below and we’ll respond.