Planet Money
9:28 am
Fri December 28, 2012

What A Former FBI Hostage Negotiator Can Teach Us About The Fiscal Cliff

Originally published on Fri December 28, 2012 10:27 am

The tortuous negotiations involved in the "fiscal cliff" talks are like a chess game.

To shed some light on the kinds of negotiation techniques that members of Congress might be using during the talks, we asked two negotiators to walk us through their tactics with examples from their everyday lives.

Adam Galinsky teaches negotiation at Columbia University's business school. He was recently at an airport in North Carolina, waiting to fly home. The flight was woefully overbooked, and the gate was crowded.

Then a crackling voice announced over the PA system: "We're looking for volunteers to fly tomorrow instead of today. And we're offering a voucher."

To Galinsky, this was a negotiation with two players: the airline, which needed seats; and the passengers, who had seats. What would it take for the airline to convince passengers to give up those seats?

First, the airline offered $300. That wasn't enough for Galinsky. They raised the voucher value to $500, then $700, and eventually to $1,000. Galinsky took the $1,000 voucher — but he thought there was room for more negotiation.

So he asked the airline: "If I get bumped off this flight, will you put me in first class tomorrow?" The airline agreed. Then he asked for a hotel room for the night. He got it. He continued: a food voucher to cover his dinner. He got it. He even convinced the airline to provide him a car service for his ride home.

This technique is called "the nibble," and politicians know it well. Any agreement on the fiscal cliff is bound to include little extra provisions that get added in at the last minute.

The nibble is the easy part. What does it take to get to the core agreement? Former FBI hostage negotiator Chris Voss shares a story about a recent experience at a car dealership.

Voss says he "fell in love" with a certain SUV. He knew getting the price he wanted would take a lot of negotiation, so he had a strategy in mind. First, he carefully chose his opening offer.

"If you're going to play the bargaining game, you just need to make the other side mad," Voss said. "You want them to get a little annoyed. Then you know that you've come in with a good price."

Voss offered significantly below the sticker price. The salesman came back with a counteroffer.

Typically this process would continue back and forth until the price landed somewhere in the middle, but Voss had another trick up his sleeve.

He used a technique called "disarming empathy." He praised the truck, and said the price the salesman offered was phenomenal. But he also said he couldn't afford to pay that price.

The salesman went to talk to his boss and came back with a price closer to what Voss had offered. Voss turned it down. The salesman went back and forth four times, each time offering Voss a lower price. Voss refused to take the deal — until the salesman finally agreed to his price — the price he said was the most he could afford.

Negotiating with someone like Voss isn't that far off from the negotiations taking place in Congress right now. You've got seasoned, patient negotiators trying to get the best deal. The difference: There aren't two people at the table, there are 535.

The surprising thing about the fiscal cliff situation is not that it's taking so long for them to reach a deal — it's that a deal is even possible.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

DAVID GREENE, HOST:

At the end of the day, the fiscal cliff negotiations are just that: negotiations. They come down to people in a room who want different things, trying to reach an agreement.

It's something of an art form. And to help us understand it, David Kestenbaum of NPR's Planet Money team asked two specialists about their everyday negotiations.

DAVID KESTENBAUM, BYLINE: Adam Galinsky was at an airport in North Carolina. He was waiting to fly home, it's crowded, and he hears this announcement over the PA system. We're looking for volunteers who can fly tomorrow instead of today. And we're offering a voucher.

ADAM GALINSKY: It's way overbooked. And so they started out at about $300.

KESTENBAUM: Three hundred dollars was not enough for Adam. He teaches negotiations at Columbia University. And if you think about it, this is a negotiation. The amount keeps going up: $500, then $700.

GALINSKY: Eventually, they're offering a $1,000 voucher...

(LAUGHTER)

GALINSKY: ...for a flight that I paid $180 for.

KESTENBAUM: Now the price is right. And for most rookie negotiators, this would be the end. But for Adam, things are just getting started. So he goes up to the desk and makes a counter-offer.

GALINSKY: I said: If I get bumped off this flight, would you put me in first class tomorrow? Yeah, we can do that.

KESTENBAUM: Then he says something else.

GALINSKY: I need to stay somewhere tonight, since it's tomorrow. Will you put me in a hotel? They said, yeah, we can do that.

KESTENBAUM: Thousand-dollar voucher, first-class seat, hotel.

GALINSKY: A boy's got to eat, so will you pay for my dinner tonight? And they said, yeah, we can do that. And I said, now, someone was supposed to pick me up in a car tonight. Can you get a car service to take me home tomorrow? And they said, yes, we can do that.

KESTENBAUM: This is the nibble. That's a technical term. You reach a general agreement - $1,000 is good for me - and then you say, oh, one more thing, one more thing. Politicians know about the nibble. It's one reason any agreement on the fiscal cliff is likely to have all sorts of little provisions that got added in at the last minute. The nibble, though, that's the easy part. Coming to that core agreement, that is where the advanced tactics come in, which brings us to this other story about a hostage negotiator buying a car - not just any car.

CHRIS VOSS: There was an SUV that I fell in love with. It was this gorgeous color.

KESTENBAUM: What color was it?

VOSS: The manufacturer calls it salsa red pearl - sort of this sexy burgundy, great deep burgundy color.

KESTENBAUM: Chris Voss was a hostage negotiator with the FBI. Now he teaches at Georgetown. Chris went into a car dealership, and he made the salesman an offer. Everyone knows you want to start low, but he says there's an art to deciding how low.

VOSS: If you're going to play the bargaining game, your first offer really needs to just start to make the other side mad, that you want them to get a little annoyed, and then you know you've come in with a good price.

KESTENBAUM: Chris says his number, which is significantly below the sticker price.

VOSS: I threw out the price, and the guy looked at me really, really hard, and he got up and walked away from the table.

KESTENBAUM: But the guy comes back with a counter-offer. Normally, you end up meeting at a price somewhere in the middle, but Chris does not want to do that. So, he needs to neutralize the other guy's argument, which is: Hey, we came down from the sticker price. Chris uses a technique called disarming empathy - stay firm, but be nice.

VOSS: So, I said, you know, I'm really sorry. That's a phenomenal price. The truck is worth more than that. It's a gorgeous truck. It's beautiful. But I just can't pay your price. And that leaves them nowhere to go.

KESTENBAUM: Is this all stuff that's straight of the FBI hostage negotiation handbook?

VOSS: It's kidnap bargaining - I wouldn't say 101, but it's kind of master's level kidnap bargaining.

KESTENBAUM: The car sales guy says let me talk to my boss, and he comes back with an offer that's closer to Chris's asking price.

VOSS: And this time, he had smiley faces written all over the offer sheet, and you win underlined three or four times. If he'd had balloons, he'd have brought balloons out to me, I think. And I said I just, I'm sorry, I can't do it. I just - I can't do it.

KESTENBAUM: Chris still does not change his offer.

VOSS: He got up and walked away from the table about four times, came back with a lower offer every time until he came back with my price.

KESTENBAUM: He came back to the original price that you'd asked for?

VOSS: Yeah. I beat him all the way down.

KESTENBAUM: Now imagine if you had someone like Chris Voss negotiating across the table from someone like Chris Voss: two seasoned, patient negotiators trying to get the best deal. That's the fiscal cliff situation, except that there aren't two people at the table. There are 535 members of Congress, and it's all happening in the public eye. When you think about the negotiations that way, the surprising thing is not that it's taking so long to reach a deal. It's that deals get made at all. David Kestenbaum, NPR News. Transcript provided by NPR, Copyright National Public Radio.

Related Program