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April 16, 2014

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 POLITICS:

Art of the deal: Get inside head, not heart

I remember after Halloween my brother and I would gather our piles of sweets and begin negotiating potential trades. I liked 3 Musketeers, he liked Kit Kat bars, or some such. But my brother would invariably refuse to trade, because he said allowing me the pleasure of some of his candy would hinder his own enjoyment of it.

He would say with a diabolical giggle: It’s a bipolar, zero-sum game. Whenever you win, I lose.

He’s now an attorney.

I tell this story because legislators in Carson City are steeling themselves for what are expected to be tough negotiations this spring.

The state faces a $2.3 billion shortfall, and a tax increase seems likely, but that means constitutionally mandated two-thirds majorities of both houses will have to pass the measure.

So the proceedings require lots of give-and-take, with many variables on tax increases and spending cuts.

Legislators might consider some recent research about effective negotiation.

Adam Galinsky, professor of ethics and decision management at Northwestern’s Kellogg School, published work in the journal Psychological Science last year evaluating the techniques that can lead to win-win settlements.

Most people have some sense that when negotiating you need to walk in the other person’s shoes.

But there’s a bit more nuance to it, Galinsky said in an interview.

“Perspective taking” is the ability to see the world from another person’s perspective, to understand his cold, rational self-interest — what he’s thinking.

Empathy, on the other hand, is the ability to intuit how another person feels and what emotions he’s experiencing.

Thinking vs. feeling.

Turns out that perspective taking leads to better deals all around, Galinsky said. Empathy clouds the issue.

Galinsky set up an experiment with 150 MBA students divided into pairs: One person was attempting to buy a gas station, but with less money than the seller wanted; price couldn’t be the only negotiating point, so the two sides had to work on alternative incentives.

When the buyer was a “perspective taker,” the deal worked best for everyone.

I was surprised a little empathy (feeling) did worse than perspective taking (thought). The research found that when you empathize too much with someone, you give too much away, Galinsky said.

“When two friends negotiate, they come to a less creative deal,” he said. “They trust more, but they’re too concessionary, too self-sacrificing and miss creative solutions that would help both sides.”

Translation for Nevada: The important players, including Assembly Speaker Barbara Buckley and Senate Majority Leader Steven Horsford, the Las Vegas Democrats, and Bill Raggio, the Reno Republican minority leader in the Senate, should keep their distance a bit. They should consider what they want and what others want. But they should disregard feelings and beware empathy as they negotiate.

The key will be integrating interests, Galinsky said. “Is there something out there that helps both sides? Something that allows them both to go their constituencies and say, ‘I got a good deal,’ rather than just sacrificing.”

This probably means Raggio could tell Republicans he’s won concessions on the state’s big unfunded liabilities in its state worker pension and benefit programs, while Democrats get funding for education, health care and other programs.

But getting there will be tough, especially if the two sides take my brother’s Cold War attitude. Other than meeting his daily quota of spite, that non-deal helped no one.

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