Why People Sometimes Get “Greedy,” and How to Manage Early-Stage Concession-Giving

Every year the community of Calabasas, CA has a “pumpkin festival,” where friends and family gather for two days of food, games, and of course, pumpkin-carving. This year while I was walking around the festival I couldn’t help but notice several instances of children pleading, some even demanding that their parents buy them ice cream, soda, a hot dog, a large pumpkin…whatever happened to be their focus at the time. Watching these interactions caused me reminisce back to my own childhood, and reminded me of a point in psychology I learned some time ago: As a child, whenever I received what I wanted, the natural tendency was for me to next want more than I had just received. … Now I admit it, sometimes I was indeed “spoiled” as they say … but don’t judge me too harshly, because this tendency is perfectly human, and not a concept limited to children. In fact, many adults’ expectations change in just the same ways mine did when I was a child and wanted an ice cream cone. Sometimes when people get what they want, they react by simple “resetting” their “starting point” and demand more. In a way, we “recalibrate” what it means to be “satisfied” in a situation. If I was given an ice cream cone at some point, I may well ask for a cone with sprinkles the next time (and I did).

And from an evolutionary psychology standpoint this tendency makes sense: As animals, human beings have evolved with the instinctual drive to accumulate what they can in order to survive. Thousands of years ago, the ability to acquire and maintain hunting territory, good shelter, etc. often meant the difference between life or death for a human being and his or her family. Indeed, for centuries many ancient Romans held a belief about imperium Romanum (“Roman imperialism”) whereby Rome wasn’t “healthy” unless it was growing. … Literally, most people assumed something was “wrong” if territories were not expanding. Many societies constantly vied (and still do) for land, resources … you name it. It’s in our blood.

So what do ice cream sprinkles and ancient Rome have to do with mediation? Everything. Especially when it comes to forming strategies for concession-giving. When people are bargaining for something of value (say, payment according to contract terms, or redress for a perceived harm) they are – in some very distant yet very powerful ways – engaging in the same kind of “give and take” in which humans have engaged for thousands of years. Of course, parties are rarely mediating over disputes that may determine the very rise and fall of civilization boundaries (a contemporary exception being, say, negotiations over potential Palestinian territories within Israel). Nonetheless, there is still a very strong, deeply ingrained predisposition for humans to seek more than they currently have, regardless of what “starting point” at which they begin. But how does this work? Let me give you an example of a simple negotiation I recently went through myself that illustrates the point clearly.

I recently sought to replace the old convertible top on my car. Now, there are two main components to most convertible tops…the “headliner,” which is the fabric that lines the inside of the car, and the actual outside of the top (in my case, made of canvas). At first when I sought price quotes for a new top, I assumed I should replace both pieces (running me several hundred dollars more in part costs than if I just replaced one). Because of this, I estimated that I would have to pay price ‘x’ for both pieces, and began to reluctantly adjust to the idea of paying ‘x’ amount. However, I later realized that in fact, my headliner was in great condition, and that I could easily save that several hundred dollars by just replacing the canvas top. Great news, right? Well … sort of. Psychologically my original “starting point” for payment was ‘x,’ but even though early in the process I was able to “reset” my “starting point” to only having to pay “x – y,” my desire to still save “more” than my “starting point” remained. Some might think that since I was now able to pay only ‘x - y’ that I would probably be satisfied with that number, knowing that even if I didn’t “drive a hard bargain” I was still saving well more money than I had originally anticipated. Wrong! When I called back to check prices on just the one piece, I again negotiated for the best deal I could find. There was no motivation whatsoever for me to see the original price shift as “savings,” because to me it was independent of the bargaining I was to do regardless. Even though I had a new, “better starting point” I still wanted a lower price (just like I wanted sprinkles after given a cone as a kid, and just like Rome always wanted more land, people, and resources…).

Now, I do not mean to generalize that all negotiating parties are going to automatically “seek more” than they feel they come into negotiations already having obtained. There are many factors that may guide a party to accept “less” than they might have been able to obtain had they “pushed hard” during negotiations – including the personality of a party, a party’s motivations to create and/or maintain relationships with other parties, a party’s willingness to engage in conflict, a party’s personal moral constructs regarding “hard bargaining,” how much energy a party has left to continue negotiations (discussed more below), and other reasons. Moreover, it may seem a “simple” fact that many parties in negotiation will keep “pushing” for “more” regardless of how “much” they enter the negotiation with. But this is a very important dynamic to be aware of and to think about, especially when it comes to the pattern and timing of concessions throughout the negotiation process.

Concessions can serve many useful functions, but buyer beware. They can be given early in mediations as gestures of goodwill and as inducements for other parties to reciprocate. They can be “saved” strategically only to be used late in negotiations for trades of important concessions a party seeks from the other side – especially when a mediation may be approaching, or in, stalemate. But just as importantly, concessions also serve the role of providing a means by which parties “size up” what they have “been able to get” from the other side, and it behooves us as mediators to consider this last “function” of concessions before we recommend concession-giving to a party. Giving concessions early can change the mental “starting point” of the recipient, and thus can run the risk of creating a desire in the recipient to seek “more” later in the game. Put another way, when early concessions are offered, receiving parties may not interpret concessions as simply offers deserving reciprocity, but instead merely continue to “push for more”…only from a less favorable “starting point” for the conceding party!

Why does it matter when in the game a concession is given? It’s not a hard-and-fast rule, but I find that concessions given relatively “early” in a negotiation – say, during initial caucuses or in the first round or two of shuttling – can sometimes only “reset” the “starting point” of a party, if anything because parties are not yet tired of negotiating and/or because they are still “primed” and full of energy to “push for more.”I find it helpful to think of the decision-making of a party receiving early concessions as a simple mathematical ratio:

A party’s likelihood to “push for more” = “perceived opportunity to do so” + “motivation to push.”

Whenever a party offers a concession, they are automatically giving the other party a potentially “perceived opportunity” to “push for more.” As mediators we have relatively little ability to guide a party’s “motivation to push,” but we can work with a party’s motivations by either not recommending or encouraging concessions when inappropriate, or at least by having the conceding party wait until the recipient might “value” the concession more later in the game. How can we as mediators tell when this might happen, and thus when it might not be prudent to offer concessions “early” in the negotiation process? Usually, it’s more straightforward than you might think… Ask them!

Of course, sometimes it is imprudent to directly ask a party whether or not being “offered” certain concessions would change their negotiating posture, but there are more subtle – and honestly I find, much more useful – ways to gain direct feedback on how parties may interpret concessions early in the negotiation. Naturally from the beginning of any mediation you want to observe the party’s rhetoric and non-verbal cues – trying to gain a sense of their affect and temperament, as well as any “roles” they may see themselves playing that may motivate them to be “hard-bargainers.” (Say, a CEO has taken personal interest in a business case and sees the mediation as not just a business negotiation but also as an opportunity for him or her to appear “strong” as a leader, etc). But if simple observation isn’t enough, begin probing for their “interests” in the process. Ask questions that will help you answer the following: “What does this party value in this mediation?” It really comes back to basic mediation skills and techniques, and that’s probably why going through this process can sometimes be so elusively simple that mediators forget to probe early-on before shuttling concessions between-parties. Woe unto any mediator who attempts to encourage an early concession when the receiving party is primed to “push for more!” If the concession fails, sometimes a mediation can be stopped dead in its tracks before it even had a chance – with the receiving party not only not reciprocating but still driving a hard bargain, and with the conceding party feeling jilted that the other party did not reciprocate. Concessions are a powerful tool, especially when trying to push along slowing or stalled negotiations. But because concessions can be interpreted in different ways, and because of humans’ inherent tendency to consider “new starting points” only new bases from which to “push for more,” it is important to fully understand what value an early concession represents to receiving parties before suggesting or encouraging concessions from the other party.

One final note: The tendency to “push for more” has historically been considered a primarily “male” trait, but I argue that this is an inaccurate generalization. All parties in mediations inherently play “roles” as they mediate – whether it is the role of “client” or of “lawyer,” or even more abstractly the roles of “victim” or of “hero.” I have always seen the gender roles of “male” and “female” as archetypical “ways of acting” that typically conform to our society’s “assumptions” about how different people act, nothing more. Moreover, being a man or a woman is absolutely no guarantee that a person will act more “male” or “female.” I have encountered many females who “act as males,” and vice versa many males who “act like females,” in variegated ways, throughout mediations. You rarely know what roles parties will assume – or more importantly, why they have assumed those roles – until the parties begin to communicate. Always stay alert, use your instincts, and if necessary ask questions to clarify the “interests” and values of parties early in negotiations. If you are aware of the potential interpretations of concessions early on during negotiations, you will be much less likely to misinterpret parties’ desires to “push for more,” and therefore much less likely to inadvertently allow a conceding party to become offended by the recipient’s refusal to reciprocate.

by Zachary Ulrich

Zachary P. Ulrich is currently a researcher for Pepperdine School of Law’s Straus Institute for Dispute Resolution. He holds a JD, Masters in Dispute Resolution, and Masters in Psychology (Clinical). Zach is an alumnus of General Electric’s highly-esteemed Financial Management Program, where he held several financial analysis positions of increasing responsibility and completed a graduate-level education in business management and operations. He has published over twenty-five articles and commentaries on organizational conflict resolution and mediation psychology.