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Managing Emotions in Buy/Sell Negotiations

Business transactions, especially mergers and acquisitions (my specialty), involve both head and heart — cognition and emotion. However, we focus far more on the price and terms in an agreement than on the emotions that almost always play a major role in the outcome, even to the point of determining whether negotiations end in a deal or a deadlock. Instead of understanding emotion and using it to our benefit either through insight or action, we often let emotion drive an outcome, usually to the detriment of everyone involved.

Photo by Tommaso Urli (sourced from Unsplash)

I am not suggesting that we leave our emotions outside the door of the conference room, if that were even possible. Emotions play a valuable role in negotiating. For example:

  • Desire pulls parties together to initiate a transaction.
  • Eagerness gives us the energy to persevere when the negotiation drags on.
  • Fear can encourage us to examine a contract more closely.
  • Disappointment can signal the need for further discussion.
  • Anger is sometimes used to make an overly aggressive party realize they need to back off.

What is important is that we maintain our poise and manage the emotions (both our own and our counterpart’s), so these emotions do not control us or the deal.

Alleviating Anxiety

In a study entitled “Can Nervous Nelly Negotiate? How Anxiety Causes Negotiators to Make Low First Offers, Exit Early, and Earn Less Profit,” Alison Brooks and Maurice Schweitzer of The Wharton School of Business at the University of Pennsylvania, conclude that “compared to negotiators experiencing neutral feelings, negotiators who feel anxious expect lower outcomes, make lower first offers, respond more quickly to offers, exit bargaining situations earlier, and ultimately obtain worse outcomes.”

Anxiety is prevalent at the negotiating table, and it is usually rooted in a common fear of the unknown; you cannot predict the outcome or what the other party will do or the future value of a deal. Also, by its very nature, negotiation involves relinquishing some control, because the desired outcome for both parties is not something that either party can achieve unilaterally. This lack of control, combined with the unpredictability of the outcome can generate a great deal of stress, which makes most people anxious.

There are several techniques to alleviate anxiety before or during a negotiation, such as the following:

  • Know what you want and envision the ideal outcome. Keep the goal in sight.
  • Do your homework. Identify your core interests and those of your counterpart, crunch the numbers, research the industry and current market conditions, and consider your walkaway options. The more you know, the more confident and less anxious you will be with your decisions.
  • Relax. You can use several relaxation techniques, such as mindfulness meditation, deep breathing, or even listening to soothing music. (In their study, Brooks and Schweitzer played music from Alfred Hitchcock’s movie Psycho to induce anxiety in study participants.)
  • Practice negotiating. Psychologists often use exposure therapy — slowly increasing a patient’s exposure to the source of the patient’s anxiety — to help the patient overcome an anxiety disorder. This works for negotiating, as well. The more often you negotiate, the less anxious you will be.

Also, keep in mind that your counterpart in the negotiation is probably also feeling anxious, which is something that can work to your benefit. If your counterpart finds the negotiating process painful and just wants to get it over with, you may be in a good position to achieve a better outcome for yourself.

Using Anger to Your Benefit

In a study entitled “The Influence of Anger and Compassion on Negotiation Performance,” Keith Allred, John Mallozzi, Fusako Matsui, and Christopher Raia of Teachers College at Columbia University found that negotiators who felt high anger and low compassion for each other:

  • Have less desire to work with each other in the future
  • Achieve fewer joint gains
  • Failed to claim more value for themselves than did negotiators who had more positive emotional regard for the other party

However, in another study entitled “Power and Emotion in Negotiation: Power Moderates the Interpersonal Effects of Anger and Happiness on Concession Making,” Canadian and European researchers concluded that low-power negotiators concede more to an angry opponent than to a happy one, whereas high-power negotiators do not. According to one of the researchers, Gerben Van Kleef of the University of Amsterdam, “anger signals toughness and high limits, and thereby elicits concessions.” However, he also cautions that “anger also contributes to negative impressions and low levels of satisfaction, suggesting that the apparent benefits of anger may backfire in the long run.”

Emotion in Buy Sell Negotiations

Photo by Chris Lawton (sourced from Unsplash)

Based on these two studies, it is possible to draw three reasonable guidelines for potentially using anger as a negotiating tactic:

  • Generally, you are better off tempering your anger and choosing a more positive approach, especially if you plan to have an ongoing relationship with your counterpart or if expressing your anger is likely to harm your reputation in the community in which you do business.
  • If you are negotiating with a stranger who is a low-power negotiator and with whom you are unlikely to have an ongoing relationship, expressing anger over what you feel is a bad deal may result in a better offer for you and additional one time concessions.
  • Be aware that your counterpart may be using anger to get a better offer or more concessions. Maintain your poise in the face of anger.

How to Avoid Unintentional Anger

Despite the tactics discussed above, anger often plays a role in negotiation without anyone using it intentionally as a negotiating tactic. If you feel anger, it is often a sign that you feel threatened in some way; for example, you may feel as though you are being treated unfairly or disrespectfully, or not being heard. To prevent and reduce anger in the negotiating process, here are a few suggestions:

  • Build rapport with your counterpart, which you can start doing even before negotiation begins.
  • Frame the negotiation in your mind as a collaborative effort to reach an agreement that is in both parties’ best interests. Avoid approaching the negotiation as a zero sum game (for one party to gain something, the other must lose). See my previous post “How to Avoid Zero Sum Thinking.”
  • If the other party expresses anger, ask questions to uncover its source and address it. You can start by simply pointing out that you sense that the other party feels upset. Do what you can to reduce any hostility, knowing that doing so places you in a better position to get what you want.
  • When tensions are rising, take a break to let everyone cool down and regroup. A five- to ten-minute break may be all that is needed to de-escalate the situation.

Expressing Your Disappointment

If you have an ongoing relationship with your counterpart or have been able to build rapport, you can often express disappointment instead of anger to signal your dissatisfaction and start a constructive dialogue.

In a study entitled “Does communicating disappointment in negotiations help or hurt?” researchers concluded that “in contrast to the common belief that weakness is a liability in negotiations, expressing disappointment can be effective under particular circumstances.” The particular circumstances the study refers to is when the person expressing disappointment has an ongoing relationship or a good rapport with his or her counterpart in the negotiation. Under such circumstances, the expression of disappointment evokes guilt in the counterparty, which tends to make the counterparty present a more generous offer or back away from a demand that triggered anger.

However, disappointment can have the opposite effect if you are negotiating on behalf of someone else (third-party negotiation) or do not have a good rapport with your counterpart. In such situations, expressing disappointment is often taken as a sign of weakness, which commonly evokes exploitation. So, it is important to understand the players in the negotiation and which roles you are playing.

Keeping Your Happiness in Check

Although you certainly want to be happy at the end of a negotiation, avoid any urge to gloat over your success. Reining in your joy is not only common courtesy, but it also prevents the other party from leaving the negotiation feeling anger or regret, which can lead to future problems for you. An angry or resentful counterpart is more likely to try to rescind or renegotiate the agreement, and it will ruin any future opportunities you may have to deal with this person in the future.

Instead of reveling in what you gained at the expense of the other party, express your satisfaction with the deal and your excitement at the future prospects you and your counterpart have to look forward to as the result of the deal you just made, even if there may not be post-closing interaction. Ideally, everyone should walk away feeling like winners.

Preparing Emotionally for a Negotiation

The key to managing emotions before, during, and after a negotiation is to acknowledge them and dig deeper to find their source. Ask yourself how you feel and how your counterpart seems to feel — eager, anxious, frustrated, angry, disappointed, sad, surprised? After identifying an emotion, ask questions to root out the source of that emotion. For example, anxiety and anger are often triggered by fear — fear of the unknown, in the case of anxiety, and fear of loss, in the case of anger. Keep digging to find the cause, whether it exists within the agreement or something outside of the agreement, such as a lack of information needed to put yourself or your counterpart at ease. What do you or your counterpart know, think you know, or do not know that is eliciting a certain emotion?

Instead of reacting to emotions emotionally, look at negative emotions, such as anxiety, anger, and disappointment as flags that signal distress and a need for further investigation. Use your head and your heart together to identify, investigate, and remove any obstacles that may be triggering counterproductive emotional responses.


Disclaimer: The information in this blog post is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Stephen Dietrich, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.


About the Author: Stephen Dietrich is an attorney and author who has a passionate interest in the human side of business. His distinctive combination of legal and business knowledge, human insight, and dedication to clients makes him uniquely qualified to help corporate leaders and other C-level executives navigate high-value mergers and acquisitions, restructure transactions, and manage day-to-day operations. Through this blog, Stephen shares his extensive experience and unique personal and professional insights in the hope of stirring thought and dialogue that leads to ever deepening insights and understanding. For more information, please visit

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