Trump's Negotiating Expertise and Blinders

The place to discuss politics and policy issues that are not directly related to matters of faith.

Moderator: Jon Estes

Trump's Negotiating Expertise and Blinders

Postby Haruo » Sun Jul 22, 2018 7:03 am

David Honig wrote:I’m going to get a little wonky and write about Donald Trump and negotiations. For those who don't know, I'm an adjunct professor at Indiana University - Robert H. McKinney School of Law and I teach negotiations. Okay, here goes.

Trump, as most of us know, is the credited author of "The Art of the Deal," a book that was actually ghost written by a man named Tony Schwartz, who was given access to Trump and wrote based upon his observations. If you've read The Art of the Deal, or if you've followed Trump lately, you'll know, even if you didn't know the label, that he sees all dealmaking as what we call "distributive bargaining."

Distributive bargaining always has a winner and a loser. It happens when there is a fixed quantity of something and two sides are fighting over how it gets distributed. Think of it as a pie and you're fighting over who gets how many pieces. In Trump's world, the bargaining was for a building, or for construction work, or subcontractors. He perceives a successful bargain as one in which there is a winner and a loser, so if he pays less than the seller wants, he wins. The more he saves the more he wins.

The other type of bargaining is called integrative bargaining. In integrative bargaining the two sides don't have a complete conflict of interest, and it is possible to reach mutually beneficial agreements. Think of it, not a single pie to be divided by two hungry people, but as a baker and a caterer negotiating over how many pies will be baked at what prices, and the nature of their ongoing relationship after this one gig is over.

The problem with Trump is that he sees only distributive bargaining in an international world that requires integrative bargaining. He can raise tariffs, but so can other countries. He can't demand they not respond. There is no defined end to the negotiation and there is no simple winner and loser. There are always more pies to be baked. Further, negotiations aren't binary. China's choices aren't (a) buy soybeans from US farmers, or (b) don't buy soybeans. They can also (c) buy soybeans from Russia, or Argentina, or Brazil, or Canada, etc. That completely strips the distributive bargainer of his power to win or lose, to control the negotiation.

One of the risks of distributive bargaining is bad will. In a one-time distributive bargain, e.g. negotiating with the cabinet maker in your casino about whether you're going to pay his whole bill or demand a discount, you don't have to worry about your ongoing credibility or the next deal. If you do that to the cabinet maker, you can bet he won't agree to do the cabinets in your next casino, and you're going to have to find another cabinet maker.

There isn't another Canada.

So when you approach international negotiation, in a world as complex as ours, with integrated economies and multiple buyers and sellers, you simply must approach them through integrative bargaining. If you attempt distributive bargaining, success is impossible. And we see that already.

Trump has raised tariffs on China. China responded, in addition to raising tariffs on US goods, by dropping all its soybean orders from the US and buying them from Russia. The effect is not only to cause tremendous harm to US farmers, but also to increase Russian revenue, making Russia less susceptible to sanctions and boycotts, increasing its economic and political power in the world, and reducing ours. Trump saw steel and aluminum and thought it would be an easy win, BECAUSE HE SAW ONLY STEEL AND ALUMINUM - HE SEES EVERY NEGOTIATION AS DISTRIBUTIVE. China saw it as integrative, and integrated Russia and its soybean purchase orders into a far more complex negotiation ecosystem.

Trump has the same weakness politically. For every winner there must be a loser. And that's just not how politics works, not over the long run.

For people who study negotiations, this is incredibly basic stuff, negotiations 101, definitions you learn before you even start talking about styles and tactics. And here's another huge problem for us.

Trump is utterly convinced that his experience in a closely held real estate company has prepared him to run a nation, and therefore he rejects the advice of people who spent entire careers studying the nuances of international negotiations and diplomacy. But the leaders on the other side of the table have not eschewed expertise, they have embraced it. And that means they look at Trump and, given his very limited tool chest and his blindly distributive understanding of negotiation, they know exactly what he is going to do and exactly how to respond to it.

From a professional negotiation point of view, Trump isn't even bringing checkers to a chess match. He's bringing a quarter that he insists of flipping for heads or tails, while everybody else is studying the chess board to decide whether its better to open with Najdorf or Grünfeld.

That's certainly the way it's been looking to me. The guy has no sense of "win-win"; when he seems to, it's because he sees an opportunity to pull a rug from under someone.
Haruo (呂須•春男) = ᎭᎷᎣ = Leland Bryant Ross
Repeal the language taxLearn and use Esperanto
Fremont Baptist ChurchMy hymnblog
User avatar
Haruo
Site Admin
 
Posts: 12205
Joined: Sat Aug 14, 2004 7:21 pm
Location: Seattle

Re: Trump's Negotiating Expertise and Blinders

Postby KeithE » Sun Jul 22, 2018 4:51 pm

All part of Trump’s “post-truth” approach to everything.

“Post-truth” is Oxford dictionaries' international word of the year 2016. “Post-truth” is an adjective defined as: relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief.


What works up his base the most (as he imagines in his mind), he goes with publicly. Other “Trump First” stances are hidden from the public to the degree possible. He does not objectively study the likely outcomes of his stances in any manner (immediate cost-effectiveness -e.g tariffs as we are seeing already, long term risks/rewards - never seen life-cycle cost/benefit analysis from his team, game theory - chess moves from other countries (see Haruo’s article), or any such approach). The only consistent result he gravitates towards are ones that help him financially - no regard for the poor or middle or even upper middle class. He will even throw his friends under the bus (e.g. Michael Cohen). "America First" is really a "Trump First with enough Demagoguery/Corptocracy to stay in power” policy. He might have a bit of justification/Messiah complex in his mind by taking conservative stances, but I doubt that, given the variability of his long term political stances (he was a Democrat and supported abortion) and exploitation of women and other people (like the many workers he has stiffed) - those are not “conservative values”.

The American people are the loser as will increasingly become apparent.
Informed by Data.
Driven by the SPIRIT and JESUS’s Example.
Promoting the Kingdom of GOD on Earth.
User avatar
KeithE
Site Admin
 
Posts: 8819
Joined: Thu Aug 12, 2004 8:02 pm
Location: Huntsville, AL

Re: Trump's Negotiating Expertise and Blinders

Postby Sandy » Sun Jul 22, 2018 7:05 pm

https://www.washingtonpost.com/business ... 97423febf0

Call it "How to start a recession in one easy step by Donald Trump." A lot of those foreign corporations and companies own productive businesses in the US that employ a lot of Americans. It didn't take very long after the tariffs went up for unemployment to tick up and wipe out a good month of job gains. Some of those auto makers he's complaining about employ literally tens of thousands of Americans.
Sandy
 
Posts: 8800
Joined: Thu Aug 12, 2004 4:10 pm
Location: Chicago


Return to Politics and Public Policy Issues

Who is online

Users browsing this forum: Jon Estes and 2 guests