Advanced negotiation: does the time already invested justify continuing?
After months of discussions, ending a negotiation can seem harder than making another concession. The management question is specific: how can we decide whether to continue without allowing resources already committed to dictate future concessions?
What the literature establishes
Hal R. Arkes and Catherine Blumer (1985, Organizational Behavior and Human Decision Processes) describe the sunk cost effect: having already invested money, time or effort can increase the tendency to continue an activity. Their research highlights, in particular, the desire not to appear to waste resources already committed. Applied to negotiation, this mechanism calls for a distinction between what has already been spent and what continuing might still deliver.
When defending the deal means defending a decision
Barry M. Staw (1976, Organizational Behavior and Human Performance) shows, in an investment decision experiment, that personal responsibility for an initial decision can encourage further commitment after negative outcomes. Continuing may then serve to justify the earlier choice rather than respond solely to future prospects. In negotiation, this suggests a reason for caution when the person recommending another concession is also the person who has championed the deal from the outset.
The premature conclusion
One might infer that a stalled negotiation should be terminated; these studies do not support that conclusion. Continuing remains rational if the expected future benefits justify the costs and risks still to be incurred. An irrecoverable past expense should not determine the decision on its own, but the future contractual, commercial or relational consequences of walking away remain relevant. (our executive and employee training programmes)
What these findings cannot settle
These studies concern investment decisions and decisions to continue an activity, not professional negotiations in Geneva's business sectors. They support a possible mechanism without establishing a universal threshold of time or concessions beyond which negotiators should withdraw. Replacing a negotiator or introducing an independent review is therefore an option to test, not a proven guarantee of better decisions.
A practical check in Genève
Within SHR's “Advanced Negotiation” programme, an exercise applicable in Geneva is to introduce, before every substantial new concession, a decision sheet separating sunk expenditures, expected future benefits, additional costs and the consequences of walking away. In private banking, an international organisation, luxury watchmaking or commodity trading, an authorised person who did not champion the initial decision can review this sheet, subject to confidentiality requirements. Over a trial period defined in advance, measure the proportion of substantial concessions preceded by a complete sheet and a documented review. This indicator checks decision-making discipline, not the profitability of agreements or the elimination of bias. To go further: explore the Advanced Negotiation training in Geneva, or browse our executive and employee training programmes in Switzerland.
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