Volume V, Number 2 • February 2012 • Archives of Past Issues An E-Publication of the Los Angeles County Bar Association Written by Linda B. Bulmash
This Month's Topic:
You can influence your counterparts' choice by wisely framing an offer!
Example A: Choose either option 1 or 2:
Option 1: You receive $1000
Option 2: There is a 20% chance you will receive $5000 and an 80% chance you will receive nothing.
Example B: Choose either option 1 or 2:
Option 1: You lose $1000
Option 2: There is a 20% chance you will lose $5000 and an 80% chance you will lose nothing.
When faced with certain gain or the possibility of a greater gain/no gain, people will be risk adverse and choose the certain gain (see example A above). On the other hand, when faced with certain loss or the possibility of greater loss/no loss, people tend to be risk-takers (see example B above).
So how can you use this knowledge to your benefit? Frame your offer as a gain so as to Induce your counterpart to see your offer as getting a benefit rather than avoiding a risk or loss.
Do you have a question about negotiation?
Do you have ideas for upcoming One Minute Negotiation Tips?
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