“Negotiation Game Theory – Helpful Insights – How To Negotiate By Making Better Decisions”

“The value obtained from negotiation game theory lies in the insights received before negotiators negotiate.” -Greg Williams, The Master Negotiator & Body Language Expert

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“Negotiation Game Theory – Helpful Insights

How To Negotiate By Making Better Decisions”

People don’t realize they’re always negotiating.

Do you use negotiation game theory to improve negotiation outcomes? Savvy negotiators use negotiation game theory to assess the mindset of those participating in the negotiation (hidden and visible), identify decision dependencies, evaluate the risk and rewards of one’s actions, uncover mutually beneficial solutions, and control information flow.

Given that negotiation game theory allows negotiators to better prepare for negotiations by testing strategies and assumptions that might arise during engagements, you should consider using it, too.

So, if you want to understand how negotiation game theory will improve your negotiation efforts and how you can maximize your outcomes, continue. You will gain insights about points to consider when using negotiation game theory.

Principals Of Negotiation Game Theory

Negotiation game theory is a means to assess the strategies negotiators may use during negotiations and how and when they might employ those strategies. Thus, it is a simulation usage of expected and, to a degree, unexpected occurrences that duplicate the negotiation possibilities that may occur during the negotiation.

Initially, negotiation game theory addressed problems confronting negotiators in win/lose scenarios. It sought insights that would offer best-case outcomes to such circumstances. After that, it evolved into other negotiation situations, including cooperative negotiations from weak to strong bargaining techniques.

Understanding Negotiator’s Mindset   

In negotiation, it is essential to identify those that have a stake in the outcome. Negotiation game theory seeks to achieve that by analyzing the goals, incentives, and constraints under which negotiators may engage each other during the negotiation.

It can help answer the question about why a negotiator acts a certain way and on whose behalf they are acting.  Accordingly, negotiation game theory emphasizes the importance of understanding the strategies and sources that motivate negotiators to comprehend why they may behave in a particular manner.

Thus, in your negotiations, you might consider a negotiator’s alternatives, the timing in which they would have to identify another source to obtain what they seek, and the possible goodwill they might lose from not doing business with you. And, you should think about what they are considering about dealing with you, too. This understanding lets you anticipate their moves and align your negotiation strategy accordingly.

Identify Negotiation Strategy Dependencies

Negotiation game theory helps to identify the interdependencies between the decisions made by negotiators based on the strategies they will use. That means you will be better positioned during the negotiation to strategically adjust your approach by recognizing how your choices affect the other party’s decisions.

Consider a negotiation in which you have made assumptions based on the negotiation gaming theory you engaged and determined that the opposition may adopt one of four possible strategies. If you understand the limits of their options, you can offer the approaches that suit your best-case scenario. Even if the other negotiator balks at your position, you still have options to suggest. Accordingly, identifying the negotiation strategy dependencies will give you an advantage in the talks. 

Assessing Risks And Rewards

Negotiation game theory scrutinizes risks and rewards associated with a negotiator’s different strategy usages. That analysis helps them gauge potential risks and rewards related to possible outcomes, which leads to better decision-making.

Depending on the variables of the negotiation, what you want, what the opposition seeks, and what both of you will forgo to achieve your objections, you would weigh those variables against one another and determine the benefits of adopting one course of action versus another.

In making your assessment, you can confidently negotiate, knowing where you are in the negotiation and the direction in which it is heading. That also serves as mile-markers to alter your strategy if you were not where you thought you should be.

Uncovering Mutually Beneficial Solutions

Identifying best-case solution strategies in negotiation game theory entails finding mutually beneficial resolutions to negotiation problems. Having that information can promote teamwork amongst competing negotiators and assist in detecting better negotiation outcomes.

Consider a scenario where two companies compete for a long-term contract. Instead of engaging in aggressive negotiation tactics, which is value-claiming, they could combine their forces to expand the opportunity for both entities – value creation. By engaging cooperatively, they can maximize their gains and build a long-term relationship.

Negotiation Game Theory – Controlling Information Flow

Negotiation information imbalance occurs when one negotiator has more or better information than the other. Thus, the order in which you present and how you control the insights delivered offers substantial advantages in negotiations.

Negotiation game theory offers negotiators insights about the best timing to divulge specific information. By carefully controlling and revealing information, negotiators increase the negotiation forces to serve their objectives better.

But, you should be mindful of the effect of delivering untimely information and how it may impact long-term relationships. In some cases, opposing negotiators may thank you hold back on delivering pertinent information until it suits your interest. And that may leave a bad taste in their mouth about dealing with you.


By using negotiation game theory to replicate possible scenarios, negotiators can effectively evaluate their possible strategies and the other negotiator’s likely behaviors and make more informed decisions to maximize favorable outcomes. But, it is worth noting that game theory does not guarantee negotiators will have an advantageous conclusion; it only enhances that probability to the degree that plans unfold according to expectations.

Nevertheless, negotiation game theory offers negotiators a tool that can significantly enhance overall negotiation preparation and help them understand how a negotiation may unfold. Working with that insight is invaluable.

So, give negotiation game theory a try before your next negotiation. And everything will be right with the world.

Remember, you’re always negotiating!

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After reading this article, what are you thinking? I’d like to know. Reach me at Greg@TheMasterNegotiator.com

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