Introduction to Negotiation: A Strategic Playbook for Becoming a Principled and Persuasive Negotiator

About this course: This course will help you be a better negotiator. Unlike many negotiation courses, we develop a framework for analyzing and shaping negotiations. This framework will allow you to make principled arguments that persuade others. It will allow you to see beneath the surface of apparent conflicts to uncover the underlying interests. You will leave the course better able to predict, interpret, and shape the behavior of those you face in competitive situations. In this course, you will have several opportunities to negotiate with other students using case studies based on common situations in business and in life. You can get feedback on your performance and compare what you did to how others approached the same scenario. The cases also provide a setting to discuss a wide-ranging set of topics including preparing for a negotiation, making ultimatums, avoiding regret, expanding the pie, and dealing with someone who has a very different perspective on the world. Advanced topics include negotiating when you have no power, negotiating over email, and the role of gender differences in negotiation. To close out the course, we will hear insights from three negotiation experts: Linda Babcock, Herb Cohen, and John McCall MacBain. Enjoy.

Created by:  Yale University

  • Barry Nalebuff
    Taught by:  Barry Nalebuff, Milton Steinbach Professor
    Yale School of Management
How To PassPass all graded assignments to complete the course.
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Introduction / What is the Pie?
I've promised that this course will help you be a better, smarter, more strategic negotiator. To do that, we begin by laying a foundation for negotiation, a theory of the “pie.” Over the years, I’ve discovered even the most experienced negotiators tend to lack a framework that grounds their approach to negotiation. While some folks try to bully their way to a larger share, most people make arguments that sound fair to them. But what sounds fair to them often doesn’t sound fair to the other side. Their criteria for what's fair may be biased in their favor. The theory of the pie is useful because it doesn’t depend on which side you are taking. It provides principles that will change the way you approach negotiations—in this course and in life. It will allow you to make arguments that persuade others. That’s why I am teaching you about it first.
7 videos8 readings2 readings
  1. Video: Introduction to the Course
  2. Reading: Course Outline
  3. Reading: Requirements and Grading
  4. Reading: FAQ
  5. Reading: Recommended Books
  6. Video: What is the Pie?
  7. Reading: Takeaway
  8. Video: Airline Cost Sharing
  9. Practice Quiz: Baltimore
  10. Video: Limo Ride
  11. Video: The Principle of the Divided Cloth (a historical context for how to divide the pie)
  12. Video: Sea Corp
  13. Reading: Looking Ahead
  14. Reading: Caution: Math Ahead
  15. Video: The Shapley Value (solving the runway problem)
  16. Practice Quiz: Detour
  17. Reading: Nucleolus (advanced and very much optional)
Negotiation Caselets
You've got the theory. Now let's use it. I'll show how the pie framework applies to some mini cases, or caselets. The Merger Case considers how the synergy gains from a merger will be shared by the two parties. While this is still a stylized case, you'll see how it directly applies to some very real merger negotiations. "Start By Asking" shares a salary negotiation done by one of my students and provides a chance to introduce the idea of one's reservation value, or BATNA. You'll also learn why it's best to never say no. We end the week with our first interactive exercise—the Ultimatum Game. Here you have an opportunity to negotiate with your fellow classmates and with me. You also have the first mastery quiz for the course. I've tried to make it as much a learning opportunity as it is a test of your ability to apply the concepts presented.
7 videos7 readings1 reading
  1. Reading: Planet–Gazette Case
  2. Video: Planet–Gazette Results and Analysis
  3. Practice Quiz: Adding a Second Buyer
  4. Video: Things Go Better with Coke
  5. Video: Rio Tinto–BHP
  6. Video: BATNA
  7. Video: Start by Asking
  8. Reading: ZOPA
  9. Discussion Prompt: Negotiating With Others
  10. Video: Never Say No
  11. Reading: More Examples of Never Say No
  12. Video: Ultimatum Game
  13. Reading: Back and Forth Bargaining
  14. Reading: FAQ
  15. Reading: Preview of Mastery Quiz
  16. Reading: Congrats
Graded: Mastery Quiz 1 – 2
Zincit Case
The Zincit case provides an opportunity to discuss a wide-ranging set of topics including how to prepare for a negotiation, making ultimatums, alternating removals, avoiding regret, expanding the pie, and dealing with someone who has a very different perspective on the world.
21 videos7 readings
  1. Video: Stop! In the Name of Learning
  2. Reading: Zincit Case
  3. Reading: Negotiation Logistics (or how do I find a partner anyway?)
  4. Video: Lights, Camera, Action
  5. Reading: How to Record Your Negotiation
  6. Reading: Report Your Results
  7. Reading: Unpacking Zincit
  8. Video: Zincit Numbers
  9. Video: Pareto Optimality
  10. Video: Using Fairness to Choose Among Existing Options
  11. Video: I Need to Make Copies
  12. Video: About the Videos
  13. Video: Beating by $1 / Failed Ultimatum
  14. Video: Going Around in Circles
  15. Video: Alternating Removals
  16. Video: What Have You Given Me?
  17. Video: Ultimatum
  18. Video: Don't Fight Fire with Fire
  19. Video: Creating New Options
  20. Video: Beets versus Broccoli
  21. Video: 50/50 Then More Pie
  22. Video: A Really Big Pie
  23. Video: Post-Settlements / A Deal Better than C?
  24. Video: Slow Down and Understand the Logic
  25. Video: Need to Make Both Happier
  26. Video: Lawyer Fee
  27. Reading: Zincit FAQ
  28. Reading: Preview of Mastery Quiz
Graded: Zincit Code
Graded: Zincit Negotiation
Graded: Mastery Quiz 3
Outpsider Case
Our second case study is more difficult. Here each party has some hidden information to which the other is not privy. Much like real life, neither party has enough information to figure out a solution on his or her own. Sharing and revealing information thus becomes a critical part of the negotiation. What should each party share? What should they keep to themselves? This case provides an opportunity to discuss critical questions around revealing information, along with some negotiation tactics: who should make the first offer, what the first offer should look like, and how you should respond to threats.
31 videos10 readings
  1. Video: How to Prepare: The Dog Bite
  2. Video: Step Zero: What Is Important to You?
  3. Reading: Outpsider Case: Instructions and Common Information
  4. Reading: Outpsider Case: Next Steps
  5. Reading: Outpsider Case: Confidential Information for Cade and Helen (Sellers)
  6. Reading: Report Your Results: Cade and Helen
  7. Reading: Outpsider Case: Confidential Information for Pat Bennett (Buyer)
  8. Reading: Report Your Results: Pat
  9. Peer Review: Outpsider Negotiation (Optional)
  10. Video: Cade's BATNA
  11. Video: Just Say No (Simpsons)
  12. Video: Anchoring
  13. Video: Good Cop, Bad Cop
  14. Video: Great Place to Start
  15. Reading: Commentary
  16. Video: Toilet
  17. Video: Too Low
  18. Video: Where Do I Sign?
  19. Video: Out of Your Tree
  20. Video: Losing Control
  21. Video: Load of BS
  22. Video: Lying Eyes
  23. Reading: Lying Eyes: Commentary
  24. Video: Don't Lie
  25. Video: Herb Cohen on the Pay Stub
  26. Video: We Will Crush You
  27. Video: Giving an Inch
  28. Video: Herb Cohen on The Nibble
  29. Video: Awkward Silence
  30. Video: Put out the Fire
  31. Video: Suits
  32. Video: The Boat Trip Case
  33. Video: What Goes Wrong?
  34. Video: Mistakes Were Made
  35. Video: What Are Your Plans?
  36. Video: White Lies?
  37. Video: Ads at Cost
  38. Video: Expanding the Pie as a First Resort
  39. Video: Discover What They Want
  40. Video: Contingent Deal
  41. Reading: Outpsider FAQ
  42. Reading: Preview of Mastery Quiz
Graded: Outpsider Code
Graded: Mastery Quiz 4
Advanced Topics
This module is a collection of short lessons. We cover everything from negotiating when you have no power to negotiating over email. There is a test-taking detour, showing how the game theory approach we use in negotiation can help you (or your kids) do better on standardized tests. I end with some key lessons I learned from a taxi ride that went the wrong way.
15 videos8 readings2 readings
  1. Video: The Card Game
  2. Video: Sweet Nothings
  3. Practice Quiz: Planet-Gazette-Sun: Adding a Second Buyer II
  4. Reading: Photo Op Case: Instructions
  5. Reading: Photo Op Case: Confidential Information for Willcox
  6. Reading: Photo Op Case: Confidential Information for Bachrach
  7. Video: Photo Op Results
  8. Reading: Backstory
  9. Video: Photo Op Debrief
  10. Video: Herb Cohen on Bachrach
  11. Video: Herb Cohen on Hiding Mistakes
  12. Video: Game Theory and the SAT
  13. Video: What Does Winning Mean? A Classroom Experiment
  14. Reading: Prologue
  15. Video: Rubinstein Bargaining
  16. Reading: More Advanced Rubinstein Bargaining (Optional)
  17. Video: Settlement Escrows
  18. Video: Virtual Strike
  19. Video: Texas Shoot-Out
  20. Practice Quiz: Case Study: Gringotts v. Agrabah
  21. Video: Gringotts v. Agrabah: Mediation or Arbitration
  22. Video: Getting Informed — A Rug Story
  23. Video: Taxi Ride
  24. Reading: FAQ
  25. Reading: Preview of Mastery Quiz
Graded: Mastery Quiz 5
Linda Babcock: Ask for It
In this module, we are joined by Professor Linda Babcock, the James M. Walton Professor of Economics at Carnegie-Mellon University and a world-renowned expert on negotiation. Her specialty is the role of gender differences in negotiation. She is the coauthor of many well-cited journal articles and two award-winning books: Women Don’t Ask and Ask for It. In a series of presentations, Linda puts some dollars and cents on the value of asking, shows you how to prepare and then how to ask. The value of this material isn’t just for women. We can all learn how to better prepare for a negotiation, be soft in style and hard in substance, and aim high without crashing. As a bonus section, Ayana Ledford, the Founding Executive Director of PROGRESS at Carnegie-Mellon University, explains how they are teaching negotiation to teens as a life skill.
21 videos1 reading
  1. Video: The Value of Negotiating
  2. Video: Men Negotiate More
  3. Video: Listen to Noise
  4. Video: When Women Negotiate
  5. Video: How Women Can Become Better Negotiators
  6. Video: Change Your Thinking
  7. Video: Negotiation Gym
  8. Reading: The Cost of Not Asking slides
  9. Video: Step Zero: What is Important to You?
  10. Video: Soft in Style, Hard in Substance
  11. Video: Activating a Joint Problem Solving Frame
  12. Video: Justifying Your Value
  13. Video: Dealing with a No
  14. Video: Lying
  15. Video: Thanks
  16. Video: Introduction (Ayana Ledford)
  17. Video: Win-Win Patch
  18. Video: Explain Your No
  19. Video: Helping Kids Negotiate with Adults
  20. Video: Joint Problem Solving
  21. Video: Not Just Win-Win
  22. Video: Advice for Teens: Negotiating Jobs and Dating
Herb Cohen: You Can Negotiate Anything
In this module, we are joined by Herb Cohen. Herb is a negotiation sensei, and we are fortunate to have his insights. He is the author of two classics in negotiation: You Can Negotiate Anything and Negotiate This! 
21 videos
  1. Video: Everything is Negotiable (almost)
  2. Video: Care, Really Care, but not THAT Much
  3. Video: It's a Game
  4. Video: Power
  5. Video: Time
  6. Video: Information
  7. Video: Deadlines
  8. Video: Negotiating Style
  9. Video: Smartest Guy in the Room?
  10. Video: Negotiating Online
  11. Video: Negotiating a Salary
  12. Video: Buying a House
  13. Video: First Offer / Last Offer
  14. Video: Embarrassment
  15. Video: Responding to Liars
  16. Video: Lowball
  17. Video: Aim High
  18. Video: What Really Matters
  19. Video: Moppo
  20. Video: Two Watches
  21. Video: The Nibble
John McCall MacBain: The Consummate Dealmaker
In 1987, John purchased a classified advertising magazine in Montreal called Auto Hebdo, the first of what would become a worldwide portfolio of Auto Trader, Buy and Sell and other classified ad papers. Over the next twenty years, he purchased some 500 papers and websites literally all around the world -- China, Russia, Poland, Australia, Columbia, Sweden, Hungary, Italy, Canada, Argentina, Brazil. He sold the business, bought it back, took it public, and then ultimately maximized shareholder value by selling off the whole business in five pieces. He is now a philanthropist focused on education. I've known John for 35 years, ever since we were classmates at Oxford. And I had a front row seat to his dealmaking as I served on the board of his company, Trader Classified Media. His papers were all about buying and selling, but when it comes to buying and selling, there's no one better. He exemplifies principled negotiation. You are in for a special treat.
7 videos
  1. Video: Listening
  2. Video: Taking Items Off the Table
  3. Video: Have the Champagne Ready
  4. Video: Negotiating in Good Faith
  5. Video: Put Your Foot Down
  6. Video: Speed
  7. Video: Thanks
Acknowledgments and Further Readings
2 videos5 readings
  1. Reading: Checklist of Key Negotiation Principles
  2. Reading: Exit Survey
  3. Reading: Actor Credits
  4. Reading: Thank Yous
  5. Reading: Further Readings
  6. Video: Lecture Version of "What is the Pie?"
  7. Video: Lecture Version of Week 1
How It Works
Each course is like an interactive textbook, featuring pre-recorded videos, quizzes and projects.
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