Colosseum

Criteria

How do we evaluate options?

We look for neutral, third-party sources of fairness.

On a deeper level Criteria also relates to the process of the negotiation.

Our favorite demonstration of the power of fairness is The Ultimatum Game.

Objective standards of fairness

Working Assumption:

It is easier, faster, and more pragmatic to resolve issues on the basis of objective criteria, than on the basis of will.

Problem

Issues are often decided by a contest of will that puts the agreement and relationship at risk. Negotiations can be decided on the basis of willpower (i.e., which side can force the other to comply?) or on the basis of legitimate criteria (i.e., which side can persuade the other that its proposed approach is fair and appropriate, based on standards or criteria independent of the will of either party?).

Cause

People forget about the other side’s desire to be treated fairly. Human beings like being treated fairly. Whether it is superpowers trying to decide appropriate levels of arms reductions, or corporate executives deciding on specific contract terms, no one wants to be unfairly treated.

Negotiators often assume that what they want is fair because they want it, and what the other side wants is unfair because the other side wants it. The parties don’t engage in a joint inquiry about what might be fair.

Approach

Use legitimacy firmly but flexibly, as a sword and as a shield. After generating options for dealing with specific issues, you must decide how to choose among them.

Criteria of fairness – precedent, the opinion of a neutral party, etc. – can be used to persuade others of the appropriate answer and to protect you against coercion.

Particularly in complex negotiations, using external criteria helps produce wise, durable agreements while enhancing the working relationship. In contrast, reliance on willpower tends to reward intransigence, produce arbitrary outcomes, damage working relationships and set bad precedents.

Consider the following guidelines

  1. As a sword: In preparation.

    Search for a range of standards that might be applied, especially those which may persuade the other side.

    In negotiation, start with the most favorable argument that you would be willing to put before an impartial arbitrator.

  2. As a shield: Do not yield to pressure, only to principle.

    If the other side applies illegitimate pressure and you give in, you reward their bullying and encourage them to repeat it.

    However, if they use reasoned arguments to persuade you and you change your approach in response, you demonstrate to them that legitimacy works and encourage them to continue its use.

  3. Frame each issue as a search for legitimate standards.

    Rather than asking what the other side is willing to do: “If I reduce my price by 10%, will you say yes?

    Ask how the issue should be decided: “What standards should we use to decide the indemnification issue? Why?

  4. Inquire into their reasoning.

    To convert a positional negotiation to one based on legitimacy, respond to the other side’s demands by asking about the reasoning that underlies their proposal.

    You have proposed that I swap one metric ton of commodity X for 3 metric tons of commodity Y.

    Why is that ratio a fair one? If you were in my shoes, how would you justify acceptance of this ratio to my superiors?