Haggling: Let's Dance

In its basic form, negotiation is pretty simple and probably already familiar to you, even if you've never formally engaged in it. For instance, deciding on a price for a used car or a house are typical situations in which two parties negotiate. These classic examples represent a kind of negotiation commonly known as haggling. Here, when arguing over price, negotiation entails a simple give-and-take until the parties reach a compromise or fail to agree. Skilled negotiators will often include arguments for why a price should be more or less. Here's an example of a negotiation for a used car:

Buyer: It's alright, but it has an awful lot of miles on it. I'll give you $2,000 for it.

Seller: I couldn't possibly let the car go for just $2,000 -- it's a classic. It's worth at least $6,000, but I like you, so I'll let you have it for $5,000.

Buyer: A classic? This thing is an antique and a gas guzzler; I guess I could raise my offer to $3,000, but no more.

Seller: I can see you recognize a good deal when you see it, so I'll let it go for $4,000 -- my final offer.

haggling for used car
Erik Rank/Photonica/Getty Images
Most people associate negotiation with haggling the price of a used car.

Of course, this tug-of-war could go on until the two parties agree on a price between $3,000 and $4,000, or they could simply never reach an agreement and give up. But this scenario demonstrates the basic formula for a negotiation:

  1. Recognizing Conflict: In the transaction, the buyer wants to spend as little as possible, while the seller wants to receive as much as possible.
  2. Stating claims: The buyer claims he deserves the car for a certain dollar amount while the seller claims he deserves more money.
  3. Conceding points: The buyer and seller make concessions by altering their claims --lowering or raising their offers -- in an attempt to reach a compromise that will satisfy both parties.

Man Up & Keep Asking
To get something you want, especially a raise, the first thing you need to do is ask. As it turns out, women usually don't realize they should or don't like to ask. The book "Women Don't Ask" spell outs statistics showing that, compared to men, women rarely initiate negotiation. As a result, women miss out on thousands of dollars in wages. The authors say that women can and should stay tough on the issues without being aggressive toward other people. Women should also keep in mind that many things in life -- at home and at work -- are negotiable [source Babcock].

The process of negotiation appears everywhere, from arranging who will run the errands to discussing which country can continue building nuclear weapons. It's a good idea to understand the different tools you'll need to be a successful negotiator. We'll equip you with those next.