Let's say a successful businessman is in the process of buying a lakeside cottage from the original owner. The prospective buyer makes a lowball offer. The owner counters with a high demand. Both parties chest their cards, each hoping the other will misplay his hand. After lots of back-and-forth posturing, they settle on a price each can live with, although both know that the deal is likely better for one side than the other.

"At some point, it still comes down to determining who gets which slice of the pie."

Now imagine the same property but a different process, one in which the parties openly reveal their own interests from the get-go. The seller learns that the buyer plans to use the cottage only in the summer, and in the course of negotiation agrees to look after the property in the off-season. Here both sides win: the seller gets a little extra cash and the opportunity to spend additional time in the cottage, and the buyer takes care of winter maintenance concerns. Win-win solutions like that could leave both parties better off than a straight cash deal.

Read the rest from Harvard Business School [HERE]