Table Of ContentBETTING THE COMPANY
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B E T T I N G T H E
C O M PA N Y
Complex Negotiation
Strategies for Law
and Business
Andrew Trask
Andrew DeGuire
1
3
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Library of Congress Cataloging-in-Publication Data
Trask, Andrew, author.
Betting the company : complex negotiation strategies for law and business/Andrew Trask,
Andrew DeGuire.
pages cm
Includes bibliographical references and index.
ISBN 978–0-19–984625–2 ((pbk.) : alk. paper)
1. Commercial law—United States. 2. Negotiation in business—United States.
I. DeGuire, Andrew, author. II. Title.
KF889.T73 2013
658.4'052—dc23 2012044824
9 8 7 6 5 4 3 2 1
Printed in the United States of America on acid-free paper
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For Nikki, Eileen, & William and Kathleen & Alexandra
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Contents
|
Acknowledgments xiii
1. Elements of Complex Negotiation | 1
1.1 When Good Deals Go Bad | 1
1.2 Th e Nature of Negotiation | 6
1.3 Th e Problem of Complex Negotiations | 11
2. Nonrational Judgments | 17
2.1 Heuristics—When Our Mental Shortcuts Get Us
into Trouble | 2 1
2.1.1 Priming and Anchoring—Taking Cues from
Context | 23
2.1.2 Hyperbolic Discounting—Birds in Hands | 2 6
2.1.3 Loss Aversion | 27
2.1.4 Herding Behavior and Normality Bias—
Th e Lemming Urge | 28
2.2 Professional Biases—How Training Colors
Our World | 31
2.2.1 Businesspeople | 32
2.2.1.1 Executives | 32
2.2.1.2 Entrepreneurs | 33
2.2.2 Lawyers | 34
vii
viii | CONTENTS
2.3 Personality and Emotion—Nobody Is Spock | 3 5
2.3.1 Personal Attraction—Don’t Fall in Love with
the Deal | 39
2.3.1.1 Charisma | 41
2.3.1.2 Trust | 45
2.3.2 Personal Animosity—“Th at F@$%ing Guy” | 48
2.3.2.1 Anger | 4 9
2.3.3 Overconfi dence—Everyone’s Above
Average | 52
2.3.3.1 Practical Implication | 55
2.4 Conclusion | 58
3. Multiparty Negotiations | 60
3.1 Multilateral Negotiations—More People,
More Problems | 63
3.1.1 Auctions—What’s Your Bet on the Future? | 66
3.1.2 Necessary Th ird Parties—You Can’t Avoid the
Tollbooths | 69
3.1.3 Spoilers—Th e People from Left Field | 71
3.2 Team Negotiations—I Love My Team/I Hate
My Team | 73
3.3 Negotiations with Organizational Constituents—
Behind the Table | 77
3.3.1 Board of Directors | 80
3.3.2 Lawyer-Client Relationship | 82
3.3.3 Shareholders | 82
3.3.4 Th e Other Side’s Constituents | 83
3.4 Practical Applications | 84
3.5 Conclusion | 88
4. Multiple Decisions | 89
4.1 Multiple Options | 94
4.1.1 More Options, More Problems | 94
4.1.2 Filtering | 96
4.1.3 Information Leaks | 97
Contents | ix
4.2 Multiple Issues | 98
4.2.1 Contingent Issues—Do Not Pass Go | 99
4.2.2 Linking Issues—Leverage | 101
4.2.3 Subtracting Issues—Making Th ings
Simpler | 106
4.3 Agendas—Th e Secret Weapon | 107
4.3.1 Sequential vs. Simultaneous Negotiations—
Chess vs. “Rock, Paper, Scissors” | 109
4.3.2 Strategic Ordering | 110
4.4 Practical Applications | 112
4.5 Conclusion | 114
5. Transactions Over Time | 115
5.1 Path Dependence—Starting Points Matter | 119
5.2 Time Asymmetries—Why Someone Prefers to
Go Slow | 1 23
5.3 Exogenous Shocks—What Happens When Stuff
Happens | 127
5.4 Learning—Why Some Confl ict May Not Be
So Bad | 131
5.5 Sequential Strategy—Why It Pays to Be Nice | 133
5.6 Practical Implications | 136
5.7 Conclusion | 142
6. Regulated Negotiations | 143
6.1 Information and Disclosure—Basic Concepts | 148
6.2 Obligations/Duties to Constituents
(Corporate Law) | 151
6.2.1 Th e Corporate Form | 152
6.2.1.1 Board of Directors | 153
6.2.2 Th e Duty of Loyalty | 156
6.2.3 Th e Duty of Care | 159
6.2.4 Th e Business Judgment Rule | 162
6.2.5 Other Duties to Constituents (Lawyers’ Duty
to Clients) | 163
