
Getting Leverage in Hostage Negotiations - aaronbrethorst
http://venturehacks.com/articles/positive-leverage
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egiva
For people who want more substantive ideas about the topic: they talk about
"positive leverage" and compare the situation to what you encounter in a
hostage crisis. In economics, this is actually called the "Patient Seller"
model, or the "Rubinstein Bargaining Model" - it's a basic element of Game
Theory and comes out of John Nash's famous "Nash Equilibrium" (see: Russell
Crowe in the movie Beautiful Mind!).

Basically, when you work in (for example) sales and have to periodically
negotiate new contracts with buyers, you learn that this model is intuitive
and in practice really stands up to scrutiny.

Here's a quote from a good write-up on the subject:

"What determines the final selling price? The key observation is that patient
players give up less at each negotiating step because they see more value in
future dollars. Therefore, their strategies are represented by flatter lines.
Impatient players want the deal done quickly, and their strategies are
represented by steeper lines."

Quote Source: [http://mindyourdecisions.com/blog/2008/07/15/why-patience-
pa...](http://mindyourdecisions.com/blog/2008/07/15/why-patience-pays-off-in-
negotiations/)

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erikb
I am looking desperately for some detailed examples where this principle is
applied. I think there is a lot of value in this skill but I also feel it is
hard to learn. I try for years without success.

So, share your experiences, where you've seen this in action (or even did it
yourself)!!! Thanks!

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alain94040
As usual, solid startup advice from VentureHacks, unlike a lot of amateurish
bloggers who think they know what they are talking about :-)

