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3.18.99  
Where Nice Guys Do Finish Last: In Negotiations
A study reveals what qualities a good bargainer needs and how to improve your odds

Are you involved in hot and heavy price negotiations? Here's some advice: Drive a hard bargain, and don't worry about being pleasant. That's one message that booms out of a study of what works at the bargaining table, done by two management professors from Vanderbilt University.

"If you're agreeable, there's no upside for that kind of bargaining," says Raymond Friedman, one of the professors. Don't be discouraged though, if you're the conciliatory type. "We assume all people can overcome their personalities," he says. His advice: Consider the study's findings strategic knowledge you can use to prepare for negotiations by working on your weak points or by choosing someone better suited to the task.

The professors began their study (which was published in 1998 in the Journal of Personality & Social Psychology) a few years ago. They subjected two groups of MBA students to simulated bargaining exercises, to see if they could ascertain how personality and intelligence affected the outcome -- something that had eluded researchers in the past, in part because of poor methodology.

The first exercise, involving 378 students, looked at "distributive bargaining." That's where one side's loss is clearly the other's gain, as in haggling over the price of merchandise. The second exercise, using 98 people, involved "integrative bargaining," where the parties have to find a solution to a problem in which their interests are basically aligned. A few weeks before the studies, the students took a standard personality test to assess their salient traits.

POKER-FACED EDGE. Some of the results confirmed common sense. It's no revelation that poker-faced bargainers who don't care if people like them have an uncanny way of besting those who do care. Other findings were more subtle. It turned out that talkative extroverts didn't do well either, at least not in the opening gambits. That's because after they counteroffered, they quickly became focused on a range of solutions that actually were in the other party's interest. Later on in talks -- when each side is more focused on explaining their needs -- extroverts' sociability did help them advance their cause, the study found.

On the bright side, the research showed that nice people can overcome their natural pleasantness and win when they're really determined to do so. However, when their hearts aren't in it, "increased levels of agreeableness have a dramatically negative effect on outcomes," was the study's gloomy conclusion.

There is such a thing as trying too hard, it appears. The extroverts actually did better when they took a Zen-like attitude -- the classic case of the casual rug-buyer in the bazaar who ends up with a great deal because he can really walk away if he doesn't like the price.

So does it help at least to be smart and well-prepared? Not in haggling, the study suggests. An impervious attitude was the best predictor for success, the researchers found.

WHERE SMARTS HELP. "Integrative bargaining," the more cooperative situation, produced somewhat different results -- and Friedman hastens to point out that in the real world, most negotiations have both adversarial and cooperative aspects. There, too, being nice or open or sociable didn't advance a person's interests. What did? Being good at abstract reasoning and problem-solving (as measured by results on the GMAT test that MBA students take). And when both people were smart, they both got more satisfactory results.

Friedman says when he teaches students to become better bargainers, the agreeable ones are taught to come in with a strong idea of what they want and not to let themselves be swayed. Where do they practice all this resolve? "We have an exercise where people haggle over fruit or over shirts at Dillard's [a department store chain]. We have people bargain over things they're absolutely not supposed to," he says, such as retail prices in stores. "I've sicced my students on many a car dealer," he adds. One actually went so far as to buy a car, he says. Presumably, he got it loaded -- for the price of a stripped-down model.

By Julia Lichtblau in New York
julia_lichtblau@businessweek.com

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