Bracketing: An Advanced Negotiation Tactic / by Lewis Lin

One of the best negotiation tactics is bracketing. Bracketing is negotiation technique that states a "lower and upper limit for which one party is willing to negotiate." For instance, if someone desires a $50k salary, they might use a bracket technique by sharing that their range is $50k-$60k. The bracketing concept is similar, but not identical, to ZOPA.

According to Malia Mason, a Columbia Business School professor, bracketing can yield better outcomes. For instance, rather than request $50k, instead ask for $50k-$60k. It increases the chance that you'll get something more than $50k vs. just asking for $50k alone.

Source: Columbia Business School

A common mistake when using bracketing is setting brackets too narrow. Let's say your target salary is $50,000, and you are willing to accept no less than $45,000. You set a bracket between $45,000 to $55,000, hoping that you'll get the desired $50,000 midpoint.

However, after stating the $45k-$55k bracket, the other party responds that they can do $54k. Crap! It looks you've underestimated their ability to pay higher salaries. You want to counteroffer with $60k, but it would be awkward because $60k is beyond the top end of your originally stated bracket. Last thing you want to do is be called out for being inconsistent and greedy (gasp!). Doing so would hurt trust in the negotiation, and trust is paramount.

To avoid this dilemma, start with a bigger (initial) bracket so you have more headroom to negotiate. Using the same example, let's say the desired salary is $50k. This time, use a different and larger bracket, let's say $40k-$80k. Now, when they respond with $54k, you have sufficient headroom to ask for a larger number such as $60k.