> "our hands are tied, we can only go up to $75k for this position"
If I needed $80k, I would then say "I'm sorry, but I have expenses to pay, a family to keep. I can't work for less than $80k." If he insisted, that's when I would shake hands and walk. It wouldn't matter, in fact, if he was being honest or not. That's my limit. In this case, it's no different to bidding on eBay: I have $80 for this purchase, if it goes higher I will maintain self-discipline and drop out of the auction.
The overwhelming majority of people won't just walk away. They get hyped up in to 'negotiations' and start panicing if they can't get what they want/need.
It's less so in the IT world right now, but in most other fields, there's much higher unemployment. People don't "just walk away", and often accept a situation that doesn't fit their wants/needs, because needing income ends up trumping everything else.
For someone not in IT right now, who needed a job, they're at a strong disadvantage because of the information imbalance during interviews. Congrats on you being a rather rare individual who actually does what is recommended (walk away) - most people don't. And it comes back to not being able to tell if the other side is lying. And in some cases, being desperate enough to work for/with someone who they suspect or know is lying, but needing the job bad enough.
It has occurred to me that being in IT is possibly one reason I can do this, but otoh I have noticed that companies increasingly want to "commoditise" IT workers, so repeatedly low-ball their offers until they get someone who is willing to work for low pay and goodwill. I must admit, that has sometimes been me, but it won't happen again ;) Also, I have been in situations where I needed work, and I think now it would have helped if I had adopted my current strategy. It's a bit like dating: look too needy, get neglected. Look confident, people think you're worth having.
If you can't just walk away, and most other candidates can't just walk away, then they've probably already figured out that you can't walk away, and there's really no way to recover from that. And no amount of clever negotiating is going to fix that.
If I needed $80k, I would then say "I'm sorry, but I have expenses to pay, a family to keep. I can't work for less than $80k." If he insisted, that's when I would shake hands and walk. It wouldn't matter, in fact, if he was being honest or not. That's my limit. In this case, it's no different to bidding on eBay: I have $80 for this purchase, if it goes higher I will maintain self-discipline and drop out of the auction.