Bargaining Power as Threat of Impasse
![handle is hein.journals/marqlr87 and id is 877 raw text is: POWER
BARGAINING POWER AS THREAT OF
IMPASSE
RUSSELL KOROBKIN**
In an ideal world, all negotiators would have what are sometimes called
common interests.1 The old chandelier that to me is clutter in the basement
would be an antique to you, and your pleasure in receiving it would be
outweighed only by my joy in getting rid of it. In most bargaining situations,
however, negotiators' interests are in conflict. You might like the chandelier
more than I do, which makes a mutually advantageous bargain possible, but it
is currently lighting my dining room and I would prefer to keep it rather than
give it away. You are interested in buying the chandelier from me, but you
want to pay a low price. I will consider selling it to you, but I want a high
price. Who will succeed in achieving his goal will most likely depend on who
has more bargaining power, defined as the ability to convince the other
negotiator to give us what we want even when the other would prefer not to
do so.
The source of bargaining power is misunderstood by many negotiators,
who wrongly assume that the indicia of success in other realms of life are
directly related to power at the negotiating table. Wealth, brains, beauty,
political power, prestige, and social influence are nice to have, but none of
these items guarantee you the ability to exercise power in any particular
negotiation. Bargaining power is situational, not personal. In some labor
disputes, unions have more power than management; in others, management
has more power than unions. In some merger negotiations, the target
company enjoys more power than the suitor; in others, the dynamic is
reversed. In some litigation settlement negotiations, the plaintiff has more
power than the defendant; in others, the defendant enjoys the advantage. An
employee seeking a raise from his boss might enjoy a relative power
advantage, or he might not.
In each of these situations, relative bargaining power stems entirely from
the negotiator's ability to, explicitly or implicitly, make a single threat
credibly: I will walk away from the negotiating table without agreeing to a
deal ifyou do not give me what I demand. The source of the ability to make
such a threat, and therefore the source of bargaining power, is the ability to
Professor of Law, UCLA.
1. See e.g., DAVID A. LAX & JAMES K. SEBENIUS, THE MANAGER AS NEGOTIATOR (1986).
2004]](ViewImageLocal?handle=hein.journals/marqlr87&div=50&collection=&method=preview&ext=.png&size=3)
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Bargaining Power as Threat of Impasse
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