Post No.: 0133
This post requires understanding what a ‘pie’ means in negotiation contexts, which has been explained in Post No.: 0124.
If one creditor is owed £300 and another creditor is owed £100, but the person in debt to these two creditors only has £300 to give – a ‘proportional division’ strategy would say that the first creditor should be paid £225 and the second paid £75 since the debt ratios are 3:1. This is what most people would intuitively think of as being ‘common sense’ and a ‘fair’ deal for the creditors.
But another, strongly arguably fairer, division strategy would be to use ‘the principle of the divided cloth’, which is based on a story from the Talmud and happens to employ the main pie-splitting strategy discussed in the aforementioned post. Here, the pie is the part that’s actually at stake or in dispute, and so it’s this that really needs to be split.
So with ‘the principle of the divided cloth’, one should give the first creditor £250 and the second creditor £50. This is because the first creditor should receive all of the conceded £200 portion (since the second creditor only lays claim to £100 of the £300) and so the pie that’s actually in dispute is thus the remaining £100, which should then be split 50:50 because no creditor has a greater claim than the other for that portion.
Fairness is a key principle in negotiations as well as in many other contexts. We all seek (the perception of) fairness, but this example shows how different people can have different conceptions of what is ‘fair’; and this is not just down to cultural differences but individual differences. The above example also shows that ‘common sense fairness’ can be inferior to arguably more logical conceptions of fairness.
Many of us find fairness means getting/giving an equal share of something, but there are many ways to reason how something can be fair. And what happens is that we rationalise the fairness rule that self-servingly suits our own motivations and situation – be it ‘first come, first served’, a random selection, weighing out who needs something the most, or whatever. As you can see, these different methods won’t always produce the same outcomes but they can all be considered ‘fair’. Therefore arguing based on fairness rules – although still very important – can still create stalemates because for all parties to feel a sense of fairness there must be a shared conception of fairness i.e. one side cannot simply dictate their own conception of fairness and expect the other side to accept it (whenever we feel a sense of unfairness then that’s exactly how the other party feels when we do the same to them).
To increase trust and improve the perception of fairness – be transparent (provide meaningful visibility into your own objectives and interests. This doesn’t mean disclosing everything! Just enough for the other party to understand your position better), be honest (this doesn’t mean answering everything to the fullest detail. It means that if you do choose to disclose anything then be honest. Albeit it’s also deemed honest to voluntarily disclose anything pertinent to the situation too even if no one directly questioned it. Don’t misrepresent, and do allow them to be able to verify what you say), be kind (this doesn’t mean caving in but one can be firm yet understanding), and reciprocate (give then receive, receive then give, in relatively equal value. This is a fundamental rule in negotiation, such as in the exchange of information or concessions. In some situations, even if you give without allowing the other party a chance to reciprocate, this can create distrust i.e. one can be too kind here and arouse suspicion, whether they’re right or wrong to feel that way).
It’s a process that must be seen as legitimately fair. If the results are verifiable then the results will be deemed fair. If the negotiation process is perceived to be fair then the outcome will very likely be perceived to be fair too. (Hence even if someone did ‘undoubtedly’ commit a crime – they must still be afforded due legal process.)
Salespeople who prey on the perception of fairness tend to do well (e.g. exploiting the sense of reciprocation or obligation by giving a small gift away). People often seek the perception of fairness even more than (arguably rationally) seeking a position that’s better off than they were before. For example, people may hurt themselves in order to punish the perceived unfairness from another party – people’s desire for revenge can be so great that they’d even endure net costs to themselves to seek it (e.g. going through personal efforts and expenditure looking to kill someone just because they killed someone you loved, even though this won’t bring this person back to life and this action may even escalate violence in the community rather than deter it (so best leave it to law enforcement), or trade unionists going on strike and thus losing earnings if they think it’s necessary to advance their perception of fairness, although this strategy aims to be long-term rational even though it seems to be short-term irrational).
…So most people agree that fairness comes down to applying some fluffy form of equal treatment – but the equality of what? ‘Proportional division’ treats all units of currency equally but ‘the principle of the divided cloth’ and using the pie framework treats all people equally.
Of course, if the other party doesn’t know about this alternative way of dividing things up then use whichever strategy is to your own advantage and keep any strategy that’d work against you schtum!
Greater knowledge gives you an advantage over those who know less!