Our recent book club discussion featured Split the Pie: A Radical New Way to Negotiate by Barry Nalebuff (HarperCollins, New York 2022). While I understand the author’s concept, I am not sure if I am able to implement it as a mediator.

In the simplest of terms, in a  two-party negotiation, there are three things to consider. Party’s A BATNA, Party  B’s BATNA and how much more there is over and beyond each party’s BATNA. BATNA is defined as the Best Alternative to a Negotiated Agreement. Thus, in a two-party  negotiation, one must ask party A what her best outcome is if she does not negotiate and proceeds alone. And we ask the same of Party B- what is the best that Party B can accomplish if she does not negotiate and goes it alone?  Anything above these two BATNA’s is what (to use a Louisiana term) I call lagniappe (or extra) and according to Professor Nalebuff should be evenly split. The lagniappe is the pie, and it is to be evenly split. (Id. at 258).

As an example, Professor Nalebuff discusses splitting a pizza. Bob and Alice are given ( by the store owner) a 12-slice pizza and must decide how to split it.  Initially, they could not agree how to divide it and so the store owner  gave them  6 slices with 4 slices going to Alice and 2 slices going to Bob. Thus, in terms of BATNA, Alice’s best alternative to a negotiated agreement or by going it alone is 4 slices while Bob’s BATNA is 2 slices.  The lagniappe or extra or negotiation pie (no pun intended) is the additional six slices. According to Professor Nalebuff, this lagniappe should be evenly and equally  split. He argues that the negotiators should not fall into a trap of thinking that Alice has more power than Bob since she has  4 slices to his 2.(“…the power perspective confuses power outside the negotiation with power inside the negotiation. (Id. at 9). (Emphasis original)) They also should not fall into a fairness trap of thinking that each side should end up with the same: 6 slices to Alice and 6 slices  to Bob. (Id at 7-9.)(“… fairness has to be applied to the relevant negotiation pie not to the total.” (Id. at 10.)

Rather,  Bob and Alice  should split the extra or lagniappe evenly so that each gets 3 slices of the remaining 6 slices. Thus, Alice ends up with 7 slices ( her 4 original slices plus 3) and Bob ends up with 5 slices (his original 2 slices plus 3) (Id. at 9.)

In sum, “[e]ffective negotiation is about beating your fallback.” (Id. at 10.)  It is not about proportionality  such that if one has a 75% interest in a business and the other has a 25% interest in that business, the outcome should be a 75/25 split of profits et cetera.  Rather it is about symmetry- splitting the pie 50/50 so that there is a fair outcome. (Id. at  259.)

One other valuable point is to “…give the other side what they want.” (Id. at 260, 165-179.). As Professor Nalebuff explains,  it is in your interest to give the other party what she wants. “If the other parties are getting what they want, they will be motivated to reach an agreement. To get what you want, it helps if the other side is motivated to do a deal. “ (Id. at 166-167.) That is, by addressing  the other  party’s needs and interests so that the party accomplishes its goals,  the other party will have every incentive to help you meet your needs and interests and thus conclude a deal.

The book contains many of the traditional negotiation tips  such as be empathetic, be curious and ask questions, show that you understand the other party’s perspective, create options, employ contingent deals, do not tell white ( or even serious) lies and be aware of cultural differences (Id. at 260-264.)

However, the main thesis of the book is to figure out your fallback position, figure out the other party’s fallback position and then evenly split any and everything that is over and beyond each party’s fallback position; that is, the lagniappe aka the pie.

While it is a theory of negotiation that is extremely fair, I am not sure if I will be able to  convince parties to my mediation to implement it.  It is a whole new way of thinking and negotiating that I am not sure the parties will accept.

… Just something to think about.

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