The Trump administration demanded funding of its border wall as part of a deal to keep the government open, proposed a huge cut in taxes on businesses
that would reduce government revenue by trillions, and leaked plans to abandon the North American Free Trade Agreement to try to force Canada and Mexico to agree to better conditions.
“The benefit of starting aggressively is that if a deal is reached, it is likely to be more advantageous to you,” said Deepak Malhotra, a professor at Harvard Business School
and author of “Negotiating the Impossible.” “But there are also many risks, and these risks are much greater in politics.”
In particular, staking out an extreme position can very well shut down any further negotiating.
In Mr. Trump’s 1987 negotiation over buying an airplane, staking out an extreme offer carried minimal risk
and probably resulted in his getting a better price than if he had been less aggressive.
He sensed that the seller of the Boeing 727 was desperate, so he first offered a mere $5 million, “which was obviously ridiculously
low,” he wrote in “Art of the Deal.” He boasts of buying the plane, worth $30 million new, for just $8 million.
Think of a bluff and a lowball offer as tools that are often used in tandem — any time someone makes an extreme offer
but is either explicitly or implicitly lying about what will happen if it is not accepted.
“In many years of teaching negotiations, I’ve seen many people becoming enthralled with the apparent
power of making extreme first offers,” said Daniel Ames, a professor at Columbia Business School.
“Aggressive offers make it hard for parties to save face or declare victory later in the negotiation process —
and this is especially crucial in politics,” Mr. Malhotra said.