Good morning and welcome to The Closer, the newsletter all about deals. Today’s edition is short and sharp — one tactic, backed by research, to help you negotiate smarter. No headlines, no noise — just a Nugget you can deploy by lunchtime.
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Closer Tactic #48 • Deal Psychology
Most people think losing alternatives weakens them.
Research shows the opposite.
The Nugget
Negotiators who lost attractive alternatives actually set higher aspirations and achieved better deals.
When Elon Musk's initial funding for Tesla fell through in 2008, he didn't lower his valuation expectations—he raised them. The near-bankruptcy experience made him more aggressive in subsequent funding rounds, ultimately securing better terms from Daimler and Toyota. Research confirms this pattern: loss creates psychological fuel that drives more aggressive negotiation.
How to Deploy
• Channel loss aversion into higher demands: "Since X fell through, I need Y to work"
• Use the loss to justify aggressive positions: "I can't afford to settle for less now"
• Let the disappointment drive determination, not desperation
Avoid appearing desperate. Frame the loss as raising your standards, not lowering your options.
Takeaway
Sometimes losing your safety net makes you a better tightrope walker.
Reply with a time losing Plan B led to a better Plan A—
we might feature you (and send a mug).
*Data from Thompson & Hrebec (1996); Bazerman & Neale show 25–35% value gains through integrative bargaining with package deals.
