What is Positional Bargaining?
Positional bargaining is a negotiation strategy that involves holding on to a fixed idea, or position, of what you want and arguing for it and it alone, regardless of any underlying interests. The classic example of positional bargaining is the haggling that takes place between proprietor and customer over the price of an item. The customer has a maximum amount she will pay and the proprietor will only sell something over a certain minimum amount. Each side starts with an extreme position, which in this case is a monetary value, and proceed from there to negotiate and make concessions. Eventually a compromise may be reached. For example, a man offers a vendor at the flea market $10 for a rug he has for sale. The vendor asks for $30, so the customer offers $15. The merchant then says he will accept $25, but the customer says the highest he will go is $20. The vendor agrees that $20 is acceptable and the sale is made at $20. So the customer pays $10 more than he originally wanted and the vendor receives $10 less.
Why is Positional Bargaining Important?
Positional bargaining tends to be the first strategy people adopt when entering a negotiation. This is often problematic, because as the negotiation advances, the negotiators become more and more committed to their positions, continually restating and defending them. A strong commitment to defending a position usually leads to a lack of attention to both parties’ underlying interests. Therefore, any agreement that is reached will “probably reflect a mechanical splitting of the difference between final positions rather than a solution carefully crafted to meet the legitimate interests of the parties.”1
Therefore, positional bargaining is often considered a less constructive and less efficient strategy for negotiation than integrative negotiation.2 Positional bargaining is less likely to result in a win-win outcome and may also result in bad feelings between the parties, possibly arising out of the adversarial, “you vs. me” approach or simply a result of one side not being truly satisfied with their end of the outcome. Positional bargaining is inefficient in terms of the number of decisions that must be made. The example above demonstrates the back-and-forth nature of positional bargaining. The more extreme the opening positions are, the longer it will take to reach a compromise.
Can Positional Bargaining Be Good?
Despite criticism of positional bargaining, supporters of this negotiation strategy do exist.
It has been argued that consideration of all underlying interests in a negotiation process is unnecessary. In fact it may sometimes be counterproductive. This is because of the distinction and relationship between issues and interests. Issues are universal; they are shared between each party in a conflict. Interests, on the other hand, are specific to each party: what the buyer of the rug in the market wants is a bargain, what the seller wants is profit. This relationship is quite simple. The problem arises when the issue at hand stirs up dramatically opposing interests between the parties, a situation in which it would be very difficult to bring them into agreement. If this is the case, it may sometimes be better to negotiate in terms of positions and go for a compromise.
For example, two nations are in a dispute over water rights. However, they also differ on many other issues, including trade, immigration, religion, and politics. Broadening the debate to include these underlying interests will only polarize the sides further. In this case it may be much easier to reach agreement if the two sides focus on the smaller issue of water, and set aside their other concerns. This involves negotiating in terms of positions. This may help the sides reach a compromise without creating any larger, interest-based conflicts. So, for issues that involve extremely conflicting underlying interests, it may be best to just focus on positions and aim for compromise.3