Name: Split the Pie
Rating: 4.1 (275 reviews)
Author: Barry Nalebuff

What’s in it for me? Discover the most logical way to approach any negotiation.

Negotiating is something we all have to engage in throughout our lives. Most of the time, the stakes are low – for example, you’re at a flea market and trying to haggle down the price of an item of clothing. But sometimes the stakes are high – you’re negotiating a higher salary with your boss. Some people make their whole careers out of the art of negotiating. It’s their job to close down huge business deals, or even to negotiate ends to wars.

No matter what the stakes are, negotiations are often stressful. Engaging in them can bring out the worst in us. Sometimes we make unfairly low offers to drive down a price. And if we’re on the receiving end of such behavior, we’re likely to react negatively ourselves. So how can we protect ourselves from the stress and greed that’s so often associated with the act of negotiating? Are there any principles we can apply that can help avoid such situations – and still get our fair share?

Well, it turns out there is a powerful technique that you can start applying to all levels of negotiating in your life. The author calls it the “negotiation pie” approach. It dispels a lot of myths surrounding negotiating and guarantees that both parties will always walk away satisfied.

In this Blink, you’ll discover

why splitting everything 50/50 isn’t the fairest result of a negotiation;
how to enter into a negotiation where the other side is in a position of power; and
why it’s important to fight fire with water – and not with more fire.

The negotiation pie approach is the best way to resolve any negotiation.

So, how does the negotiation pie approach work? Let’s strip things down to the basics. Meet Alice and Bob. They’re sitting at their favorite pizzeria when the waiter makes them an offer. If they can agree how to split a 12-slice pizza, the restaurant will give it to them for free. If they can’t agree, they’ll still get half a pizza, but unevenly split – Alice will get four slices, but Bob only two.

Alice and Bob need to come to an agreement on how to split the twelve slices. There are several ways they can go about it. One is called the power perspective and results in Alice getting eight slices, and Bob four. This reflects the ratio of their fallback option. After all, if they don’t reach a deal, Alice would receive twice as many slices as Bob. The result is meant to reflect Alice’s position of power in the negotiation.

Another approach is called the fairness perspective, where Alice and Bob simply split the pizza in half, with six slices each. Many people would see this as the fairest option.

Both the power and fairness perspectives don’t take into account a very important fact – the negotiation isn’t actually about the whole pizza. Without a deal, they end up with a total of six slices. With one, they get twelve. This means the negotiation is actually only over the six additional slices that a successful deal would result in. It’s these six additional slices that constitute what the author calls the negotiation pie. And when a negotiation starts from this principle, the rationales behind the fairness and power perspectives quickly vanish into thin air.

With the negotiation pie in mind, Alice and Bob realize that they are both equally needed in order to get the six additional slices. This means they have equal power after all. Sure, it seems that Bob is in a weaker position on the surface level. Keep in mind that if they don’t reach a deal, he gets fewer slices than Alice. But in reality, if they don’t reach a deal, Alice and Bob both end up with fewer slices. In other words, they both lose. In order for them to both get more slices, they need each other equally.

Looking at it this way, Alice and Bob have an equal amount of power. And this equal amount of power needs to be reflected in an equal split of the six slices of the negotiation pie. This leaves Alice with her fallback option of four slices plus three from the negotiation pie, leading to a total of seven slices. Bob, on the other hand, takes his two fallback slices and adds three more, netting him five slices. By using the negotiation pie technique, they’re both winners.

Now, some of you might be wondering why splitting the whole pizza 50/50 isn’t the fairest option. Alice and Bob are getting a free pizza here. On closer inspection, though, a 50/50 split isn’t always as fair as it seems. This is because it doesn’t take into account uneven fallback options. For example, imagine the waiter increased Alice’s fallback option from four to seven slices but kept Bob’s at two. In this case, Alice would be losing one slice if they took six slices each. When viewed this way, it turns out 50/50 splits aren’t actually so fair.

Negotiating effectively is all about leaving with more than what you came in with. And by focusing on the negotiation pie, you and your negotiating partner are sure to both walk away happy.

There are different ways to bring the other party around to the negotiation pie approach.

Now that you understand the theory behind the negotiation pie, it’s time to learn how to put it into practice. As with most things in life, doing so involves coming up with an effective game plan. After all, it’s safe to assume that the person you’re negotiating with definitely has one. More often than not, the plan involves projecting an aggressive stance, playing hardball, and naming their price right away. But with the negotiation pie approach in hand, you can craft an action plan that’s all about nurturing a constructive negotiating environment.

The most important part of your plan is to figure out where the other side is coming from: Are they coming into the negotiation expecting a 50/50 split? Do they have preconceived notions of a supposed power imbalance? In all likelihood, your negotiation partner isn’t even aware of what’s being negotiated – the negotiation pie. If this is the case, your first job is to convince your partner that you both share the same goal – to create the biggest pie possible, and then split it evenly. Your goal here is that you both enter the process in good faith with a common purpose. If this is successful, you can then focus on figuring out how to make a bigger pie rather than worrying about your partner trying to trick you.

There are effective ways to deal with a stubborn negotiating partner.

Now, you’ll inevitably run into situations where your negotiating partner is acting like a bully. You try to get them to see the light by explaining the principles of logic and equality behind the negotiation pie. But they don’t buy it. They’ve arrived at the negotiation with a fixed notion of what is rightfully theirs, and it’s their way or the highway.

There are several techniques you can employ to try to get the other party to see the light. But one thing you should definitely avoid doing is fighting fire with fire. If the other party offers an ultimatum, you should never sink to their level and fire one back at them. This only has one possible outcome – to decrease the chance of a deal being made.

Kernaussagen in Split the Pie

Worum geht es in Split the Pie?

Split the Pie (2022) reveals a new approach to how everyone should be negotiating. While negotiations often bring out the worst in people, it doesn’t have to be this way. By employing the “pie” approach, you can enter into any negotiation with the confidence that you’ll end up with your fair share.