COMPLICATING A CHICKEN GAME.

August 8, 2011 at 3:18 PM · Economics

COMPLICATING A CHICKEN GAME. I heard about a situation as a young lawyer which exemplifies how a negotiator can introduce additional issues into a negotiation. A businessman was negotiating to buy a large company. He offered to buy the company for a combination of cash and a note. Most of the negotiations involved the terms of the note—the interest rate, the payment terms, how long it would be. The day after the sale was completed, to the seller’s astonishment, the buyer paid off the note. There was litigation, and the buyer was asked why he had negotiated so hard on the note when he was going to pay it off anyway. He said that he didn’t want the negotiations to be only about price, so he had come up with another issue to negotiate about.

2 comments

Dick Weisfelder August 8, 2011 at 10:29 PM

It’s very complicated, but I think the Republicans played chicken very successfully with Obama. He yielded, they did not. I agree with the article in this week’s Economist, “An Underperforming President.” He is a complete failure as a negotiator. Unfortunately, no better alternative seems likely to emerge.

Philip August 9, 2011 at 10:47 AM

It is complicated. My opinion right now (which changes from time to time) is that the result of the negotiations was inconclusive—that everything was deferred. I think that the dip in the market reflects fears about Europe and unemployment. Obama, like Carter and Clinton, has problems with his own majority party coalition in Congress that complicate his negotiating.