{"id":411623,"date":"2010-03-10T09:43:34","date_gmt":"2010-03-10T14:43:34","guid":{"rendered":"http:\/\/www.pon.harvard.edu\/?p=10355"},"modified":"2010-03-10T09:43:34","modified_gmt":"2010-03-10T14:43:34","slug":"the-installment-plan","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/411623","title":{"rendered":"The installment plan"},"content":{"rendered":"<p><em>Adapted from \u201cThe Fine Art of Making Concessions,\u201d by <a href=\"http:\/\/www.pon.harvard.edu\/tag\/deepak-malhotra\/\">Deepak Malhotra<\/a> (associate professor, Harvard Business School), first published in the <\/em><a href=\"http:\/\/www.pon.harvard.edu\/tag\/negotiation\/\">Negotiation<\/a><em> newsletter.<\/em><\/p>\n<p>Which of these scenarios would make you happier?<\/p>\n<p>Scenario A: While walking down the street, you find a $20 bill.<br \/>\nScenario B: While walking down the street, you find a $10 bill. The next day, on a different street, you find another $10 bill.<\/p>\n<p>The total amount of money found is the same in each scenario\u2014yet the vast majority of people report that Scenario B would make them happier. More generally, extensive research demonstrates that while most of us prefer to get bad news all at once, we prefer to get good news in installments.<br \/>\nThis finding suggests that the same <a href=\"http:\/\/www.pon.harvard.edu\/tag\/concession\/\">concession<\/a> will be more positively received if it is broken into installments. For example, imagine that you are negotiating the purchase of a house and that a wide gap exists between your initial offer and the seller\u2019s asking price. You are willing to increase your offer by a maximum of $40,000. You will be more effective if you make two smaller concessions, such as $30,000 followed by $10,000, than if you make one $40,000 concession.<br \/>\nThere are other reasons to make concessions in installments. First, most negotiators expect that they will trade offers back and forth several times, with each side making multiple concessions before the deal is done. If you give away everything in your first offer, the other party may think that you\u2019re holding back even though you\u2019ve been as generous as you can be.<br \/>\nInstallments may also lead you to discover that you don\u2019t have to make as large a concession as you thought. When you give away a little at a time, you might get everything you want in return before using up your entire concession-making capacity. Whatever is left over is yours to keep\u2014or to use to induce further <a href=\"http:\/\/www.pon.harvard.edu\/tag\/reciprocity\/\">reciprocity<\/a>. In the real estate example, you might discover that the initial $30,000 increase in your offer was all that you needed to sign the deal!<br \/>\nFinally, making multiple, small concessions tells the other party that you are flexible and willing to listen to his needs. Each time you make a concession, you have the opportunity to label it and extract goodwill in return.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Adapted from \u201cThe Fine Art of Making Concessions,\u201d by Deepak Malhotra (associate professor, Harvard Business School), first published in the Negotiation newsletter. Which of these scenarios would make you happier? Scenario A: While walking down the street, you find a $20 bill. Scenario B: While walking down the street, you find a $10 bill. The [&hellip;]<\/p>\n","protected":false},"author":4300,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-411623","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/411623","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4300"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=411623"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/411623\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=411623"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=411623"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=411623"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}