Positional Bargaining

Positional bargaining is a negotiation approach where each party takes a position, argues for it, and makes concessions to reach agreement. This traditional method focuses on stated demands rather than underlying interests, with success measured by how close the final agreement is to one's original position. While intuitive and widely practiced, positional bargaining often leads to inefficient agreements that damage relationships and miss opportunities for mutual gain.

Historical Context

Positional bargaining represents the oldest and most intuitive approach to negotiation, practiced across cultures throughout history. Its formal analysis emerged in the mid-20th century:

• Early game theory models examined positional strategies in zero-sum contexts
• Walton and McKersie's 1965 work "A Behavioral Theory of Labor Negotiations" formalized the concept of distributive bargaining
• Fisher and Ury's 1981 "Getting to Yes" critiqued positional bargaining and proposed principled negotiation as an alternative

Despite growing criticism from negotiation theorists, positional bargaining remains the default approach in many contexts, particularly in traditional business settings, bazaar-style markets, and certain cultural environments.

How Positional Bargaining Works

The typical positional bargaining process follows a predictable pattern:

1. Opening positions: Each party states an initial demand that favors their interests
2. Argumentation: Parties defend their positions and critique the other's demands
3. Concessions: Gradual movement from initial positions through a series of compromises
4. Haggling: Back-and-forth exchanges focused on splitting the difference
5. Agreement or impasse: Either reaching a compromise or failing to find common ground

This approach treats negotiation as a contest of wills, with success measured by how little one concedes from their original position.

Variants of Positional Bargaining

Soft Positional Bargaining

This approach emphasizes relationship preservation and agreement at almost any cost:

• Making generous offers and concessions
• Trusting the other party and disclosing information freely
• Changing position easily to avoid conflict
• Accepting one-sided losses to reach agreement
• Yielding to pressure and threats

While this approach may preserve relationships in the short term, it often leads to exploitation and poor outcomes.

Hard Positional Bargaining

This approach treats negotiation as a contest of wills to be won at all costs:

• Taking extreme initial positions
• Making minimal concessions
• Using threats, pressure, and deception
• Demanding one-sided gains as the price of agreement
• Engaging in brinkmanship and wearing down the other party

While this approach may yield short-term gains, it typically damages relationships and reputation.

Common Tactics

Positional bargainers typically employ several tactical approaches:

• Extreme anchoring: Starting with an ambitious position to shift the bargaining range
• Limited authority: Claiming to need approval from others to make concessions
• Commitment tactics: Making public or binding statements that limit flexibility
• Calculated concessions: Making decreasing concessions to signal approaching limits
• Nibbling: Asking for small additional concessions after the main agreement
• Good cop/bad cop: Using contrasting approaches from team members
• Deadline pressure: Imposing or emphasizing time constraints
• Emotional displays: Using anger, disappointment, or enthusiasm strategically

When Positional Bargaining May Be Appropriate

Despite its limitations, positional bargaining may be suitable in certain contexts:

• Simple transactions: When negotiating over a single issue like price
• One-time interactions: When there's no future relationship to preserve
• Time constraints: When quick decisions are needed without extensive exploration
• Cultural expectations: When operating in contexts where positional bargaining is the norm
• Defensive situations: When responding to another party's positional approach
• Signaling value: When demonstrating commitment to a particular outcome

Limitations and Criticisms

Negotiation theorists have identified several significant problems with positional bargaining:

• Inefficient outcomes: Often fails to identify value-creating opportunities
• Relationship damage: Creates adversarial dynamics that erode trust
• Impasse risk: Increases the likelihood of deadlock and failed negotiations
• Implementation problems: Agreements reached through pressure may face compliance issues
• Resource intensity: Consumes time and emotional energy in unproductive posturing
• Missed interests: Focuses on positions rather than underlying needs and concerns

Case Examples

Example 1: Traditional Car Negotiation

A classic example of positional bargaining occurs in traditional car sales:

• Dealer lists the car at an inflated price (e.g., $35,000)
• Buyer counters with a lowball offer (e.g., $25,000)
• Dealer rejects but comes down slightly (e.g., $33,500)
• Buyer increases offer incrementally (e.g., $27,000)
• Multiple rounds of haggling continue with decreasing concessions
• Final agreement reached near the middle (e.g., $30,000)
• Both sides feel they've "won" by moving the other party from their initial position

This process often misses opportunities to address other interests like financing terms, service packages, or delivery timing that could create additional value.

Example 2: Salary Negotiation

Positional bargaining in employment contexts often follows this pattern:

• Employer offers a starting salary (e.g., $70,000)
• Candidate counters with a higher request (e.g., $85,000)
• Employer increases slightly (e.g., $73,000) citing budget constraints
• Candidate reduces demand somewhat (e.g., $82,000) citing market value
• After several exchanges, they settle in the middle (e.g., $77,500)

This approach typically neglects other elements of compensation (benefits, flexibility, development opportunities) that might better address both parties' interests.

Alternatives to Positional Bargaining

Several alternative approaches have been developed to address the limitations of positional bargaining:

• Principled negotiation: Focusing on interests, options, and objective criteria
• Integrative bargaining: Seeking to create value before dividing it
• Interest-based negotiation: Addressing underlying needs rather than stated positions
• Problem-solving approach: Treating negotiation as a joint challenge to overcome

These approaches generally produce more efficient agreements and preserve relationships better than positional bargaining.