Have you ever had a coworker that you felt was a bit of a bully? Maybe a flat out autocrat, or someone that makes you feel that, most of the time, he is just not cooperating. How do you deal with this?

This can happen when there is a mismatch between the collective and the individual interests of the parties. Then, each actor must decide whether they want to cooperate (seek the collective interest) or defect / compete (pursue their own interest).

Assume that you are buying a house. The collective interest is for the transaction to occur (the seller wants to sell, you want to buy). So a cooperative approach is for each party to make some reasonable concessions to allow the transaction to occur. But the parties' individual interests differ. If the seller adopts a competitive stance, he won't want to drop the price. If you, as a buyer, also adopt a competitive position, you might not want to pay the full price. As a result, the transaction might not happen.

Buying a house is a one-off transaction, but you could face a similar situation in long-term relationship. Assume you want to go to dinner with your spouse. She wants to go to a French restaurant. You (foolishly) prefer Italian food. Should you push to have it your way? How is that going to influence your long-term relationship?

In recurring negotiations, start nice then mirror

Axelrod and Hamilton offers a simple strategy: First, cooperate, then mirror—that is, imitate the other party's action. The key is to realize that you and the other party are communicating with one another through your actions. Starting nice (cooperating) sends the message that you are willing to make some accommodations. If the other party adopts a competitive strategy, then the next time you are in that situation, reciprocate. Carry on imitating their last move on each subsequent instance.

This creates a cooperative environment where the parties learn to search for an integrative agreement. In the words of Harvard professor Kathleen McGinn: "Never be the first to defect. If you start nice, you're signaling that it's appropriate."

And don't let the simplicity of  this this tit-for-tat approach fool you: Introduced by Antol Rapoport in simulated negotiation tournaments in the 1980s, it has proved to be consistently superior to pretty much all other approaches (see Axelrod).

McGinn continues: "Nice might work: Cooperators create a good environment and a competitor in it will be short lived. So, if you can create a cooperation environment, being nice pays off."

Bazerman and Neale summarize the approach in four prescriptions:

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  Don't be envious. If they are the first to defect, they will have it their way one more time than you, accept this and move one

• 
  Don't be the first to defect.

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  Reciprocate both cooperation and defection.

• 
  Don't hide your game. Communicate unambiguously to your negotiation partner that you will reciprocate their action.

So if you are in a one-off situation—buying a house from someone whom you can safely assume you won't have a relationship with in the future—it might be preferable to adopt a competitive stance. But if your negotiation takes place with a recurring partner, you're better off to start nice and then mirror their action.

Unless your spouse wants to eat French food. French food is always the better answer.

References:

Axelrod, R. M. (1984). The evolution of cooperation. New York, Basic books.

Axelrod, R. and W. D. Hamilton (1981). "The evolution of cooperation." Science 211(4489): 1390-1396.

Bazerman, M. H. and M. A. Neale (1992). Negotiating rationally. New York, The Free Press.Chevallier, A. (2016). Strategic Thinking in Complex Problem Solving. Oxford, UK, Oxford University Press, pp. 2002–221.

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