Negotiation. The very word can spark anxiety or adrenaline.

To some, it’s a chance to claim what’s theirs. To others, it’s a dance they’d rather skip.

But here’s the thing: negotiation isn’t just a tactic. It’s a psychology.

Every time two people sit across a table—whether to divide a budget, agree on a title, or settle on salary—they bring not just facts, but feelings. And those feelings drive outcomes more than either side wants to admit.

This isn’t just about getting more money or a better role. It’s about understanding the dynamics that shape how value is created—or destroyed—in every deal.

So let’s talk about the two types of negotiation most people misunderstand.

Collaborative vs. Competitive: The Two Mindsets That Shape Everything

Before you ever say a word, you bring a mindset to the table.

1. Win-Win (Collaborative Negotiation)

In this mindset, the goal is to create value together. The assumption is: if we’re creative and open, we can both walk away better off.

You’ll see this approach when:

• You’re building a long-term relationship (team hire, business partner)
• There’s more to the negotiation than just money (e.g., flexibility, growth, timeline)
• Both parties are willing to explore needs and brainstorm solutions

This doesn’t mean being soft. It means being strategic. It’s expanding the pie before slicing it.

2. Win-Lose (Competitive Negotiation)

Here, the mindset is zero-sum. Every dollar you gain is a dollar I lose. The game is to claim value, not create it.

You’ll see this when:

• The relationship is short-term
• One side has significantly more power
• There’s no trust—or worse, bad blood

This is dividing the pie as ruthlessly as possible.

“In most negotiations, people assume they’re slicing a fixed pie. But in reality, most pies can be baked bigger first.”
— Adam Grant, organizational psychologist

How to Spot Which One You’re In

Sometimes it’s obvious. Other times, it’s subtle. Here’s how to read the room:

• Are they asking questions about your goals and constraints?
  → You might be in win-win territory.
• Are they anchoring hard on numbers and avoiding open-ended questions?
  → You’re likely in win-lose land.
• Do they treat silence as space for thought—or a power move?
  → That tells you a lot about their intent.
• Are they using “we” language or “me” language?
  → Listen carefully. People reveal their orientation.

Most Real Negotiations Aren’t One or the Other—They’re Both

This is where most people mess up.

They think negotiation is either a cozy brainstorming session or a brutal standoff. But most real-life negotiations are hybrids.

You collaborate on structure. You compete on price.

You brainstorm creative benefits. Then anchor hard on deadlines.

Understanding when to shift gears is everything.

“Skilled negotiators know how to move fluidly between claiming value and creating it. Amateurs stick to one mode and hope it works.”
— Leigh Thompson, author of “The Mind and Heart of the Negotiator”

The Hidden Psychology at Play

Every negotiation has an emotional undercurrent. Here’s what’s shaping the game behind the scenes:

1. Anchoring

The first number said out loud? It sticks—even if it’s arbitrary. That’s why companies often lowball first.

Your job? Don’t just react. Counter with data, not emotion.

2. Loss Aversion

People hate losing more than they love winning. That’s why “we’ll match your current salary” feels like a win—until you realize you’re not gaining anything.

3. Reciprocity

If they throw in something unexpected—extra PTO, a better title—you’ll feel pressure to concede something too. Know your limits beforehand.

4. Ego

The silent killer. People would rather tank a deal than feel like they “lost.” Especially if titles, status, or perceived fairness are on the line.

How to Tilt a Win-Lose Into a Win-Win (Without Getting Played)

1. Signal Collaboration Early
   “I’m confident we can find a structure that works for both of us.” It sets tone and intention.
2. Find Their Pressure Points
   What’s scarce for them—time? Budget? Approval layers? Address their needs creatively.
3. Unbundle the Deal
   Don’t just haggle over one number. Break the deal into parts:

• Base pay
• Bonus
• Equity
• Flexibility
• Development budget

Then trade across them.

4. Use “If...Then” Language
   “If we can move the salary to $X, I’d be happy to shorten the start date.” It shows flexibility while holding the line.
5. Don’t Overplay Friendship
   Win-win doesn’t mean giving in. Hold your value. Be warm and firm.

When to Walk Away (And How to Know It’s Time)

Here’s the acid test:

• Are they negotiating in good faith?
• Are your deal-breakers being ignored?
• Are you shrinking yourself just to get the offer?

If the answer to any of these is yes, it’s not a deal. It’s a warning sign.

“The ability to walk away is what gives every other tactic its power.”
— Chris Voss, former FBI negotiator

The Bottom Line

Negotiation isn’t about being aggressive. It’s about being aware.

Aware of your needs. Aware of their incentives. Aware of the dynamics unfolding in the room.

Whether you’re chasing a raise, closing a contract, or landing your dream job, remember:

You’re not just negotiating the terms. You’re negotiating the tone of the entire relationship.

And in that room, psychology isn’t the soft stuff. It’s the leverage.