The Ultimate Guide to Interest-Based Bargaining

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What is interest-based bargaining? And how can it help you negotiate successfully?

Interest-based bargaining is a negotiation strategy that focuses on the interests of the parties (what they really want) rather than their positions (what they think the solution is).

Learn why interest-based negotiation is more effective than positional bargaining and how to use it for successful negotiations.

Why Interest-Based Bargaining?

In standard negotiations, the focus is on coming up with a compromise on conflicting positions, for instance splitting the difference between a union’s pay request and a company’s smaller offer. This is called positional bargaining. Such negotiations over firm positions often reach an impasse.

But underlying each side’s position are interests — the reasons for the positions. Addressing interests rather than positions often opens the way to an agreement. This is the idea behind interest-based negotiation.

An example illustrates the difference between positional bargaining and interest-based bargaining. Two men get into an argument at a library because one wants to keep a window open while the other wants to close it; neither is willing to go halfway. The librarian asks each man for his reasons. One wants the window open to get fresh air; the other wants it closed to avoid a draft. So, the librarian opens a window in an adjoining room to provide airflow and avoid creating a draft. She resolved the conflict by focusing on the men’s underlying interests rather than their positions on opening or closing a particular window. The librarian used the technique of interest-based bargaining.

Interests Explain the Problem

In negotiations, you can’t come to an agreement without understanding both sides’ interests. Interests involve people’s needs, desires, fears, and concerns — they drive people to take the positions they take. 

For example, the Egyptian-Israeli peace treaty reached at Camp David in 1978 succeeded in part because negotiators considered the interests behind the two countries’ positions on the issue of what to do with the Sinai Peninsula, which Egypt had occupied since 1967. Each side wanted control over it and neither would compromise. Egypt’s interest was in sovereignty over land of historical importance to them. Israel’s interest was security — they didn’t want Egyptian tanks positioned on their border. The solution addressing both interests was to give Egypt sovereignty but create large demilitarized zones. Interest-based bargaining allowed negotiations to succeed.

Reconciling interests works better than trying to compromise on positions because:

  • For every shared interest, there are several positions that would satisfy it. But people often pick the most obvious position, and don’t move to another if it doesn’t work.
  • Behind conflicting positions, there are more shared interests than conflicting ones.

You may neglect to look for shared interests because you assume that because the other side opposes your position, your interests and theirs are in opposition too. In reality, some underlying interests may be shared among all parties. Finding these shared interests is one key to interest-based negotiation.

For example, if you have an interest in holding the line on your rent, you might think your landlord wants to raise it. However, the landlord may have a different, higher-priority interest, which you share: having a well-maintained property. A compromise might lie in keeping the rent down in exchange for the tenant making improvements to the apartment. A shared, complementary interest is the basis for an agreement.

How to Identify Interests

Identifying interests during interest-based bargaining isn’t as clear-cut as presenting or understanding a position. This is part of what makes interest-based bargaining so hard. While positions tend to be concrete, interests, whether yours or the other side’s, may not be obvious. It may take some effort to uncover them.

Here are some steps you can take:

  • For each position the opposing negotiators take, ask yourself, “Why did they take it?” — that’s the underlying interest. What needs, concerns, or desires does the position serve? 
  • If the other side hasn’t accepted your proposal, ask yourself, “Why not?” Consider what they might have to gain or lose by accepting — for instance, political support or group cohesion. What consequences do they face?
  • Recognize that each side has multiple interests. For instance, a tenant may want stable rent but also more favorable terms, such as the ability to sublet or have a pet. Also, different individuals on the side you’re negotiating with may have differing interests, which their negotiators are taking into account.
  • Understand basic human needs: Our most powerful interests are our human needs for such things as security, control over our circumstances, or recognition. Negotiators may mistakenly think money is the only interest involved, but behind a position involving money may be a need for security. If a basic human need is at risk, negotiations won’t progress.
  • Make a list of the interests of each side to help remember and prioritize them.

Keys to Interest-Based Bargaining

In interest-based bargaining, both sides need to be able to communicate their interests constructively in order to have them served. Here are some steps to take:

  • Be detailed and specific in explaining your interests. If you’re vague, you can’t expect the other side to understand how important your interests are to you and why. In the same way, a doctor can’t help you if you’re unclear or downplay your symptoms. Details add legitimacy and impact.
  • Show that you appreciate the other side’s interests. Ask questions to get clarification and to demonstrate that you’re listening.
  • Explain your reasoning and interests before giving your proposed solution, so it’s more logical. For instance, if you want construction vehicles driving through your neighborhood to slow down, you might first explain to the company how many children play in the neighborhood and your fears of kids being hurt or killed. Then ask for a speed reduction.
  • Talk about where you want to go. Instead of debating and arguing about the past, talk about what you’d like to see happen in the future. You’re more likely to satisfy your interests if you avoid making the other side feel defensive.
  • Know what you want, but be flexible. Have some options in mind that meet your interests but also be open to additional options.
  • Be strongly committed to your interests. Don’t be afraid to be forceful about what it will take to address the problem; just don’t blame or attack anyone personally.
The Ultimate Guide to Interest-Based Bargaining

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Amanda Penn

Amanda Penn is a writer and reading specialist. She’s published dozens of articles and book reviews spanning a wide range of topics, including health, relationships, psychology, science, and much more. Amanda was a Fulbright Scholar and has taught in schools in the US and South Africa. Amanda received her Master's Degree in Education from the University of Pennsylvania.

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