Goldtent TA Paradise

Trump negotiating style……..

1. Kewl2 says:

   February 2, 2025 - 12:53 pm at 12:53 pm

   The best, most cogent and elegantly simple explanation into the inexplicably destructive negotiating processes of the president,by Prof. David Honig of Indiana University.

   Everybody I know should read this accurate and enlightening piece…

   “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.”

   — David Honig

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   • Fullgoldcrown says:

     February 2, 2025 - 1:33 pm at 1:33 pm

     BULLSHIT

     TRUMP IS WILDLY MORE SUCCESSFUL THAN THIS OBSCURE ACADEMIC

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2. pedro_deleon says:

   February 2, 2025 - 1:29 pm at 1:29 pm

   aka, a zero sum game.

   but here’s the angle the author misses. In game theory applied to international trade (a field launched by Paul Krugman), some players are price takers and others are price makers. The US sets global prices (as the dominant consumer) and others compete for market share. The US can be the bully, as the powerhouse. Others have to cave (as Gov Abbott indicated).

   That means the US has the leverage to play as if in a zero sum game.
   So not all game optimization strategy boils down to zero sum or not.

   Now, he doesn’t spend much time on this element, but he does allude to repeated games, where reputation matters. Douche someone once, you can’t repeat the trick after that. So the more advanced models of game theory (and I’m no game theorist) are repeated dynamic games. A series of negotiations, where trust plays a role. [Note that Trump isn’t playing hide and seek; he’s very transparent; you may not like it but you can trust him to keep his word.]

   One other thing … tangential … bubbles and excessive credit … they are very destructive, but over the top lending can create things that would not otherwise exist (so quickly), and consumer welfare from their arrival and existence is exponentially high for new products. Meaning, static negotiations over carving up today’s pie, ignores the potential to build reinforcing trade regimes that amplify abundance. Cut off trade, and everybody loses even the zero sum game winner. But Trump (rightfully) sees the world as having corrupted rules run by corrupted bureaucrats, so the game board rules don’t favor constructive negotiation (with WEF acolytes supported by Finks and Soros and various medieval european bankers). No dynamic dealing until the global regime is recast.

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3. Buck says:

   February 2, 2025 - 1:51 pm at 1:51 pm

   My guess is, Trump is taking on too many countries, at the time. Why wouldn’t countries start coordinating trade/economic attack back at USA? Trump is doing great domestically, going after woke, DEI, deep state. But taking on a whole world at the same time, may backfire.

   We sure are living in interesting times 😉

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4. Chartsmaster says:

   February 2, 2025 - 3:44 pm at 3:44 pm

   The professor is doing what he is accussing Trump of doing. He first explains the two types of negotiation and says that Trump always works on the premise of the first. However, he(the professor) is claiming that all these negotiations with other countries and even issues within just the US are ALL the second type. He is wrong. There are issues that are suitable for the first(Distributive) and other issues suitable to the second (Integrative) while Trump does prefer the first where there is a clear winner and loser, he also does the second when the situation warrants it and if he knows it can’t be winner take all. Like a peace deal over the Ukraine war and many others. The professor is a blowhard with a clear dislike of Trump.

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5. Chartsmaster says:

   February 2, 2025 - 3:45 pm at 3:45 pm

   PS: Trump is smart enough to know the differnce needed for the different issues and situations. Unlike the professor.

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