Negotiators have much to learn from game theorists. In the book, Higgling: Transactors and Their Markets in the History of Economics, edited by Mary S. Morgan (Duke University Press: Durham 1994) contributor Robert J. Leonard, lists six factors that affect bargaining outcomes as follows:

1. General bargaining dispositions. Tough bargainers are dogmatic, possess a strong sense of themselves and have a highly competitive orientation in regard to personal strength.

2. Payoff system. A negotiator's willingness to make concessions is strongly influenced by what he believes to be the minimum or maximum necessary to provide him with any benefit of the bargain. Other "payoff system" factors include time pressure, the cost of no agreement, the threat capacity of one's bargaining partner and the size of payoffs.

3. Social relationship with the opponent. Not surprisingly, negotiators tend to be more cooperative when they have a friendly social relationship or when there are reasons to be concerned about the other's interests. This is why hostage negotiators always ask captors to take food orders from, and inquire about the medical needs of, their captives. Once the captors begin to take care of their victims, they begin to actually care about their charges.  

4.  Moral Appeals.  Research has proven that moral appeals result in greater concessions by the one from whom concessions are sought. The negotiator who suggests that certain concessions are necessary to satisfy his basic needs or expresses the belief that his negotiating partner will treat him fairly does better than the negotiator who does not appeal to moral considerations. This is an example of "trading power for sympathy," a bargaining tactic often referenced in Ken Cloke's writings.

5. Social relationship with significant others. Extremely significant to negotiators representing clients is the tendency of representatives to be more competitive than the parties whose interests are at stake. This higher degree of competitiveness is increased even further when the representative is being monitored by her client.

The mediator's injunction to "have all stakeholders present" is therefore a double edged sword. If you are reprsenting a client with extremely high aspirations, there is some wisdom in resisting the mediator's insistence that your clients be present because you are more likely to cut a better deal in their absence. On the other hand, as all mediators know, settlement itself is much less likely if the stakeholders are not there to balance their own interests (known and unknown to their representatives) in creating a deal that maximizes benefits for everyone.

6. Situational factors. I've never met a litigator who was not attuned to the benefits of the home court advantage. Nevertheless, if closing the deal is your goal, it may well be better to negotiate in neutral territory. Researchers have also found that colorful and pleasant surroundings induce cooperative behavior but may also reduce the sense of urgency of reaching agreement.

7. Bargaining strategy. This, of course, is its own discipline. The balance between cooperation and intransigence is the art of negotiation and is covered more extensively elsewhere.

But How About Settling My Lawsuit?

The most important lesson to learn from these highly influential factors on our bargaining behavior is that we can alter our negotiating position for the better based upon factors other than the strength of our arguments, the power of our personalities or the level of threat we are able and prepared to use if we "don't get our own way."

Chief among the malleable characteristics of any negotiation session are the presence or absence of stakeholders, the physical location of the negotiation and the quality of the relationships among the stakeholders. Even if those relationships have become strained or broken during the course of the dispute, mediators can help the parties repair relationships so that the best business deal available can be reached.

Reparative social strategies can be as simple (though not always easy) as sitting the warring parties in the same room and letting them discuss the weather, sports, hobbies, children's and spouse's well-being, recent accomplishments or challenges and other non-controversial matters that serve as social lubrication at any gathering. If the parties are willing to sit down with one another (alone or with their representatives) this reparative process can break years- even decades-long relational impasses that are preventing the parties from resolving a business dispute.

Misunderstandings that have led to grudges and lead parties to seek retributive outcomes often surface during these "shoot the breeze" sessions, after which the parties often quickly reach agreement. In more than one mediation, I have put the business disputants together without mediator or counsel (often with advance mediation-coaching) only to have them emerge from a conference room within twenty minutes, smiling and back-slapping, proud to have settled the dispute that their lawyers were unable to resolve after hours to days of negotiations and months to years of litigation.

Let me be clear about the power of the personal interaction between the business decision makers. They often have not shared with their attorneys the sometimes petty sleights that once put the entire conflict into motion, disabling their attorneys from ever addressing the actual heart of the conflict. It is not my opinion (as I have heard from others) that attorneys want to keep the dispute alive for their own economic benefit. While there may be a few bad apples in the attorney-barrell, nearly all of the litigators I've ever worked with (over 25 years of practice) are good and highly ethical people looking out only for their clients' best interests.

The adversarial system, effective as it is, is simply not conducive to the types of settlements that can be made by good neighbors over the garden fence. And business competitors are often not that much different from those neighbors. They share similar concerns and achievements and often have more in common with one another than they have with their legal counsel. They are risk-takers and opportunity-makers. Give them back their dispute and 9 times out of 10, they will surprise you with the ease with which they can resolve seemingly intractable disputes.