Advanced negotiation: does a profitable agreement necessarily seem fair?
In negotiation, demonstrating that a proposal is profitable is not always enough to secure the other party’s agreement. The managerial question is specific: how should a fairness objection be handled when the economic terms appear acceptable?
What the literature establishes
George Loewenstein, Leigh Thompson and Max Bazerman (1989, Journal of Personality and Social Psychology) show, using experimental situations, that evaluations of interpersonal outcomes depend on more than what individuals receive themselves. They also depend on what the other party receives and on the relationship between the parties. An objection to the gap between the parties’ gains therefore does not necessarily amount to a demand for more money.
The mechanism: different readings of the same outcome
In her review, Leigh Thompson (1990, Psychological Bulletin) distinguishes between the economic and social-psychological dimensions of negotiation and examines the role of negotiators’ perceptions. This distinction helps explain why a profitability calculation cannot, on its own, answer a fairness objection. The reference point still needs to be clarified: the division of gains, each party’s contribution, the risk assumed or the treatment of a comparable partner.
The premature conclusion
One might conclude that gains must be equalised to facilitate any agreement. The cited research does not support this universal rule: relationships and circumstances affect how differences are evaluated. A more cautious response is to make the comparison criterion explicit before deciding whether a concession is necessary. (our executive and employee training programmes)
What the evidence cannot settle
Experimental situations reproduce neither banking confidentiality, nor commercial dependencies, nor the history of a family business. Nor do they establish which allocation would be legally or morally fair in a particular contract. In practice, a fairness objection may express a genuine preference or serve as a bargaining argument; the cited studies provide no test for distinguishing the two in a specific case.
A practical check in Lugano
Within SHR’s “Advanced Negotiation” programme, one application to test in Lugano is an anonymised log of fairness objections in authorised cases from banking, fashion, trading or Italian-speaking family SMEs. For each objection, record the criterion invoked in Italian, ask the counterpart to confirm its wording and separately document any change to the offer. The indicator is the proportion of objections for which a comparison criterion has been explicitly confirmed, without retaining confidential information. This measure checks whether clarification has been achieved, not whether the contract is fair or whether the training has a causal effect. To go further: explore the Advanced Negotiation training in Lugano, or browse our executive and employee training programmes in Switzerland.
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