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IEET > Staff > Marcelo Rinesi

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Harry Potter and the Negotiation Table


Marcelo Rinesi
Marcelo Rinesi
Frontier Economy

Posted: Jul 21, 2009

There’s a dark magic in every negotiation table. No matter what the stakes — political, economical, personal — there’s a sinister spell worthy of a Voldemort clouding minds and making what should be impossible a daily occurrence.

Just as the wizards sharing the magic school with Harry Potter show surprise at the most mundane muggle technology and are completely accustomed to their magic environment, when dealing with each other we encounter the illogical and the supernatural so often that we find the rational, should we even met it, thoroughly alien.

Otherwise, how could we explain that having more people around a negotiating table, or a better seating position, seems to confer a ‘psychological advantage’? Why, when discussing dry, technical issues of economics or politics, negotiators pay so much attention to tones of voice, choice of words, and even posture and clothing?

Why, for that matter, do poker players attempt to intimidate their opponents? Or why do highly-paid professional athletes perform better in their home stadiums?

None of these things would happen if we weren’t magical, or at least illogical. Whenever we are negotiating taxes or playing a soccer game, our bodies, including our brains, are doing much more, whether we like it or not, watching and reacting to other people and to the environment in ways that have nothing to do with our conscious goals. What a team’s fans are yelling has as little to do with the biomechanics of kicking a soccer ball into a goal as the height at which somebody is sitting has to do with the strategic strength of their position in a negotiation, and yet we all behave as if those things matter, and empirically they do seem to matter.

From the point of view of a robot playing soccer or negotiating, it’s dark and powerful magic. Ten thousand people chant, and the performance of a soccer team improves. Heated words are exchanged about a topic irrelevant to a negotiation, and the performance of one of the negotiators falls.

It doesn’t need to be like that. Well, perhaps for soccer, but not for negotiations. In every place in which ‘manual’ negotiation has been replaced for automated protocols (exchanges, Google ad auctions, load balancing in computer networks and power grids), efficiency has skyrocketed, making possible operations with a new scale and speed.

Why don’t we do this everywhere? Why aren’t we trying to replace, as much as practical, emotional, psychological, inefficient negotiation protocols with speedy automated ones? We certainly have the technology, and would benefit very much.

Except that, on average, we believe that we are better than the average. We believe that we are better at this (‘this’ being poker, corporate politics, coordinating with friends what movie to watch) than an automated system could be. We know the system is inefficient and often unfair, but we believe we can get it to be unfair to our benefit.

That belief, which is at the root of every scam we fall to, every Ponzi scheme, and every choice not to apply an innovation because we think we can make the old system work for us, is the darkest spell of them all.


Marcelo Rinesi is the Assistant Director of the IEET. Mr. Rinesi is Data Intelligence Analyst at Vostu.
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