The Prisoner’s Dilemma is an intriguing illustration of why win-win negotiating usually yields the best results. The purpose of this article is to explain what the Prisoner’s Dilemma is, why win-win negotiations produce better results, and how to deal with a win-lose negotiator when seeking a win-win result. Here is the Prisoner’s Dilemma, as described by Wikipedia:
Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated the prisoners, visit each of them to offer the same deal. If one testifies for the prosecution against the other (defects) and the other remains silent (cooperates), the defector goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other (win-lose) or to remain silent (win-win). How should the prisoners act?
At first glance, it appears that a win-lose strategy (defect) gives one person a great advantage and the other a terrible result: “I go free and you go to jail!” The problem is that when both prisoners defect or employ a win-lose strategy, each loses. Cooperation (staying silent or win-win), however, yields the lowest total time spent in prison.
Day-to-day business negotiations are subject to the same dilemma. If both sides want a win that involves the other side losing, they will usually not achieve a compromise. If, however, both sides seek an accommodation that requires each to give in a bit or to find a creative solution to resolve the dispute, then losses of time and money are minimized. Win-win outcomes are inherently superior because each side can get a small win and avoid a big loss. As well, the toll of a protracted dispute is often quite high, and the costs (time, treasure, and well-being) usually result in both sides ending up the loser.
The problem with win-win negotiating, however, is obvious. If one side is trying to achieve a win-win compromise and the other a win-lose, the win-win negotiator often ends up the loser because he gives up too much to achieve a resolution. A more sophisticated negotiator, however, can refuse to be victimized by the win-lose negotiator. For example, engaging in a process of building trust by making small concessions might cause the win-lose negotiator to consider win-win alternatives. The negotiator can also engage in a cost-benefit analysis of the two negotiating styles as an inducement to seek win-win.
The most important concept in win-win negotiating is to understand that both sides have differing ideas on what winning means. If each negotiator spends time figuring out what the other really needs to win, the negotiators might find a solution that meets each negotiator’s idea of a win.
The win-win can seem paradoxical—how can two competitors both win?—but a person who wants to be a nimble negotiator must understand that this is not a paradox. It is instead a maxim—a principle generally admitted as true.