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Why Negotiators Make Poor Decisions

In: NEGOTIATE PERSUADE AND CREATE GREAT DEALS

Author

Listed:
  • Michael Benoliel
  • Geetanjali Mukherjee
  • Jose Yong

Abstract

On March 20, 2011, Deutsche Telekom AG accepted a $39 billion stock and cash purchase offer from AT&T for T-Mobile USA, Inc. The acquisition agreement included a reverse termination fee clause. It meant that if AT&T failed to close the deal, it would pay T-Mobile $4 billion in compensation, which was 10.25% of the total value of the deal, while the industry standard is only 4 to 5%. AT&T failed to anticipate the formidable resistance by regulators to the proposed acquisition, pulled out of the agreement, and was forced to pay the hefty termination fee…

Suggested Citation

  • Michael Benoliel & Geetanjali Mukherjee & Jose Yong, 2020. "Why Negotiators Make Poor Decisions," World Scientific Book Chapters, in: NEGOTIATE PERSUADE AND CREATE GREAT DEALS, chapter 7, pages 107-120, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811225420_0007
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    Keywords

    Negotiation; Influence; Persuasion; Master Negotiators; Deal-making; Anchoring; Negotiator's Decision Biases; BATNA; Interests in Negotiation; Building Negotiation Capabilities; Preparation; Power in Negotiation; Neuroscience of Negotiation; Human Evolution and Negotiation; Cultural Negotiation; Global Negotiation; Claiming Value; Creating Value; Negotiation Styles; Detecting Deception in Negotiation; Relationship and Trust Building; Negotiation for Success; Negotiation Principles; Negotiation Strategies; Negotiation Hacks; Negotiation and Dispute Resolution; Negotiation Crisis; Negotiation Diplomacy; Negotiation Essentials; Negotiation for Dummies; Negotiation Experts; International Negotiation; Essentials of Negotiation; Power of Negotiation; Negotiating Without Power; Negotiation for Executives; Negotiation Real Estate; Negotiation Skills; Negotiation Styles; Negotiation Theory and Strategy; The Art of Negotiation;
    All these keywords.

    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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