Something You Should Know - How Scams Easily Trick People & A Powerful Approach to Negotiating Anything
Episode Date: March 3, 2022One way to get to know someone better or get closer to them is by doing them a favor. However, there is another way that is even more effective. This episode begins with technique that will bond you ...with someone you want to get to know - and it is really easy to do. https://www.psychologytoday.com/us/blog/the-initiative/201605/the-power-merely-requesting-favor Scams and identity theft are rampant - and the scams are becoming more sophisticated. It is really important to understand the latest scams and how to protect your money and identity. My first guest in this episode is attorney Steve Weisman. He has been following the scammers for a long time and understands them extremely well. His highly regarded website www.scamicide.com was named by The New York Times as one of the three best sources of information about Covid related scams. Steve is also author of a book called 50 Ways to Protect Your Identity in a Digital Age (https://amzn.to/3sonvav). Given how likely it is that you will become a victim of a scam or identity at some point, it is really critical you hear his advice We all have this image in our head of what a negotiation is supposed to be. However, if you listen to my guest Barry Nalebuff, your image is likely to change. Barry is an entrepreneur and professor at Yale School of Management, and author of the book, Split the Pie: A Radical New Way to Negotiate (https://amzn.to/3pvOoYi). This is an interesting discussion that will give you a new perspective on how to approach any negotiation. Do you know what the Baker/baker paradox is? IT has to do with remembering a person’s name, which many of us are not very good at. Listen as I describe the paradox and offer a simple technique that will help you remember anyone’s name the next time you see them. Source: Joshua Foer author of Moonwalking With Einstein (https://amzn.to/3psUGrC).  PLEASE SUPPORT OUR SPONSORS! We really like The Jordan Harbinger Show! Check out https://jordanharbinger.com/start OR search for it on Apple Podcasts, Spotify or wherever you listen! Go to https://Indeed.com/Something to claim your $75 credit before March 31st! Masterworks gives everyone the opportunity to invest in blue-chip artwork. To receive exclusive access to their latest offerings go to https://Masterworks.art/SYSK LEVEL UP will give you the confidence, know-how, and savvy to grow your business and thrive. LEVEL UP, by Stacey Abrams and Lara Hodgson, is now available everywhere audiobooks are sold. Discover matches all the cash back you’ve earned at the end of your first year! Learn more at https://discover.com/match M1 Finance is a sleek, fully integrated financial platform that lets you manage your cash flow with a few taps and it's free to start. Head to https://m1finance.com/something to get started! To TurboTax Live Experts an interesting life can mean an even greater refund! Visit https://TurboTax.com to lear more. To see the all new Lexus NX and to discover everything it was designed to do for you, visit https://Lexus.com/NX Use SheetzGo on the Sheetz app! Just open the app, scan your snacks, tap your payment method and go! Learn more about your ad choices. Visit megaphone.fm/adchoices
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As a listener to Something You Should Know, I can only assume that you are someone who likes to learn about new and interesting things
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Join host Elise Hu.
She goes beyond the headlines so you can hear about the big ideas shaping our future.
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if you like this podcast, Something You Should Know, I'm pretty sure you're going to like
TED Talks Daily. And you get TED Talks Daily wherever you get your podcasts.
Today on Something You Should Know, if you want to get to
know someone better, there's a simple technique that works really well. Then, protecting yourself
from the constant threat of scams and identity theft. Identity theft is high-tech, low-tech,
and no-tech. It isn't just coming through your computer. It is going through your trash.
This is anything they can do to get the information they will do.
Also, a simple technique that can help you remember names a lot better.
And a very interesting way to approach negotiation that will make you much more effective.
I appreciate that you should be empathetic and curious
about what the other side's interests and positions are.
I'm a little bit like Spock in the sense that I'm trying to bring some logic back into negotiations.
And if you can combine Spock logic with Captain Kirk's emotional intelligence,
you've really got it made.
All this today on Something You Should Know.
People who listen to Something You Should Know are curious about the world,
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and a lot more. A couple of recent
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AI, discussing the future
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And writer, podcaster,
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discussing the rise of conspiracies and culture wars.
Intelligence Squared is the kind of podcast that gets you thinking a little more openly about the important conversations going on today.
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Check out Intelligence Squared wherever you get your podcasts.
Something you should know. Fascinating intel. The world's top experts. And practical advice
you can use in your life. Today, Something You Should Know with Mike Carruthers.
Hey there. Welcome to Something You Should Know. Have you ever been taken by a scam artist?
I have.
And fortunately, it hasn't happened very often, and it wasn't very much money.
But I don't think I know too many people who haven't fallen victim to some scam sometime, somewhere.
Which is why I think you're going to find the conversation with Steve Wiseman coming up in just a moment really interesting.
First up today, you probably think that one of the best ways to get closer to someone you would like to be closer to is to do something nice for them.
Do them a favor. Make some nice gesture.
Well, it turns out that you're better off asking them to do you a favor.
A study in the Journal of Human Relations revealed that when someone gives you their time or advice
or does a small favor for you, a connection is made. And it's a more powerful connection
than if you were to do them a favor instead.
I'm sure you know from your own experience that it feels good to do someone a favor.
So when you ask them to do a favor for you, you're making them feel good.
And then it also opens the door for a return of the favor, in the form of lunch or a cup of coffee.
And presto, you've got the opportunity to get to know each other a little
better and to get a little closer.
And that is something you should
know.
I think it would be hard to find
someone who has never been scammed
or never had their identity
stolen or their credit card
compromised in some way
or been taken for a ride by some
scammer out there.
Scams are everywhere.
A lot of them are online.
But they're not all online.
And most all of them are designed to separate you from your money.
And I know a lot of people believe they're too smart, too sophisticated to fall for a
scam. I know a lot of people believe they're too smart, too sophisticated to fall for a scam,
but as you're about to hear, some very smart, sophisticated people have been victims right along with the rest of us.
One of the leading authorities on scams and identity theft is attorney Steve Wiseman.
His blog, Scamicide.com, was named one of the three best sources of information about coronavirus-related scams by the New York Times.
He also wrote a book a few years ago called 50 Ways to Protect Your Identity in a Digital Age.
Hey Steve, welcome to Something You Should Know.
It's great to be with you.
So, I'm kind of curious how you got interested in scams and identity theft and these kind of crimes in the first place.
I'm a lawyer and also a college professor at Bentley University where I teach white collar crime.
Actually, before I taught at Bentley University, I taught at a number of other colleges with ever setting foot on the campuses.
I used to teach in their prison education programs in the Massachusetts State Prisons.
And it was there I met a number of scam artists and con men and criminals, always found it
fascinating. And then unfortunately had a personal experience about 20 years ago where I was a victim of identity theft.
And this was, I think, really around the time that identity theft was taking off as a crime.
It is now the biggest consumer crime.
So I just find it very, very interesting and timely. a sense, and I'd like you to comment on this if you agree or disagree, that there's this kind of
general perception amongst a lot of people that scams are for idiots, that I'm too smart to be
scammed. And, you know, if you're dumb enough to read and give money to the Nigerian prince
because he sent you an email, well, you know, that's your problem, but I'm way too smart. Well, you know, there's two things about that. First of all, no one is too smart to be scammed.
All you have to do is look at Bernie Madoff and the many intelligent people that wound up
being victims of his scam. And he actually was kind of of that mind that if you're too smart, you
wouldn't be scammed. He actually blamed his victims at one point. He said, if anyone looked into what
I said I was doing, they would know it's impossible. But when you mentioned about the
Nigerian email scam, it brought a smile to my face because lately the Nigerian email scam is still with us and they are absolutely even more
ridiculous than ever. And at first I was thinking, you know, why would they do that? And the thing is
they want to get the most vulnerable, the most greedy and people who will fall for it. They don't
want to spend time with someone who will be asking a lot of questions. But the short answer to your question is anyone can get scammed,
and the person that thinks they're too smart for it, they're going to be the next victim.
Okay, so because this is such a big problem and can come at you from lots of different directions,
where do we start?
What should we be, what should I be on the lookout for?
One of the things is the Internet of Things.
Anything that you have that is connected to the Internet, and that is a vulnerability for you.
So, you know, if you have a smart TV in your home, if you haven't protected that and changed the default password,
an identity thief can get into, hack into your Internet of Things
device, and there were more than 1.5 billion attacks last year on these, get to your computer.
From your computer, they get to your online bank account. There are other times where,
again, the identity theft, they trick you into providing information. I was speaking with
some victims and a TV crew about a victim of a scam. They went online. They found what looked
like a legitimate site. It appeared to have all of the good credentials, but they didn't check it
out. And the bottom line is they sent
their money to a scammer. So we really have to do our homework in these scams. The SEC,
which is interesting, actually did a phony website called for a non-existent cryptocurrency
called HowieCoin. And it looked good, had all of the endorsements of celebrities
and everything to make it appear good. And if people click through and it got to the part where
they were going to send their money, there's a big announcement on your screen telling you that you
would have been scammed, that this is a scam. So different scams lure you in. They all take
advantage of fear and greed. I want to go back to what you said a few minutes ago about scammers getting into my computer
through my smart TV. Can you go into a little more detail about that? Because
I hadn't heard of that before, so I'd like to know how that works.
They're going to attack your router. Remember, your router is the gateway to all of the tech
equipment you have in your house. So they'd have to be parked outside then. I mean,
they'd have to be close. Oh, no, no, they don't even they don't. This this can be done at a
distance. As a matter of fact, the FBI issued a warning about hacking into routers by Russian cyber criminal gangs.
And the problem there is a lot of people don't change the default password on their router.
And those router passwords are available online.
Criminals halfway around the world can hack into it.
See, I would bet that most people, or at least a lot of people,
don't even know that their router has a
password or that their smart TV has a password, let alone would they know how to change it.
I mean, there are other issues there with our smart TVs. And interestingly enough,
the prices of our smart TVs are less than what we would actually pay for it if those televisions were not subsidized
by companies that are taking information that we agree, we don't realize we agree,
to be gathered about us that is gathered by our smart TV that is watching not only what we're
watching on TV, but the TV can pick up and be connected through your router to all of the other devices
in your home.
And so the privacy that you give up, unless you know enough, and most of us don't, and
they make it difficult too.
I mean, even children's toys, they come with a default password.
And if people don't change those passwords,
that's the Trojan horse that can lead the hackers
to your computer, to your bank account.
So a lot of these scams are under the radar.
It isn't a matter of appealing to your stupidity
or your greed or whatever.
You wouldn't even know what happened.
Absolutely.
I mean, it's all of the above
the jamaican lottery is still a major one that appeals to our greed and uh there are uh gangs
in jamaica that have gathered telephone numbers of generally uh older americans and they call them
they tell them that they've won a lottery that they never even entered. And, you know, it's tough to win a lottery. It's really tough. Yeah. And so they have to pay fees or taxes. And that thing is huge. Now that, you know, that we're not necessarily taking the steps and we don't realize where
we are vulnerable.
And of course, even if you, you know, I'm one of these guys, even paranoids have enemies.
So, you know, being in the business, I'm particularly paranoid.
And I was particularly angry in 2017 with the major data breach at Equifax, where 147 million of us, and I include me in there,
had our personal information stolen. And so despite the fact that I'm taking care to protect
my personal information, the companies didn't. And with Equifax, what made it worse is Steve
Jobs once said, if you're not paying for a product, you are the product. And with Equifax and the other credit reporting agencies, they make their money from selling
our personal information.
And so the idea of protecting our information wasn't as high on their priority list as it
should have been.
We're talking about scams and identity theft and how to protect yourself.
And I'm talking with attorney Steve
Wiseman, whose website is scamicide.com. Hi, I'm Jennifer, a co-founder of the Go Kid Go network.
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Since I host a podcast, it's pretty common for me to be asked to recommend a podcast.
And I tell people, if you like something you should know, you're going to like The Jordan Harbinger Show.
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There's so much for you
in this podcast. The Jordan Harbinger Show on Apple Podcasts, Spotify, or wherever you get your
podcasts. So Steve, I want to talk about medical identity theft because I'm not sure people even
understand that that's a thing. And you say it could actually be fatal. So explain how that works.
Interpol once indicated there were only about 100 cyber criminal geniuses, but their business
model now is they will create the malware, the botnets to distribute it, provide tech support,
and they will sell and lease what they've created on the dark web to less sophisticated criminals. So they will be able to
get all of our information. So your credit card, if it comes with other personal information
about you, will go for about $45 online on the dark web. But your medical insurance will go for
much more. And that's because they are able to turn that into medical, they can
get medical equipment, they can get, sell the use of the insurance. And here's the thing that makes
no sense whatsoever. You become a victim of medical identity theft. Somebody has accessed
your medical insurance. You find out, you report that, and you attempt to get this false information removed from your medical
records. Well, that would violate the privacy of the medical identity thief. And so all you can do
is have a notation on there that this information is disputed. But quite frankly, you could have information on your medical report that could contain a false blood type or a medicine to which you are allergic to.
And these things could be potentially fatal.
So medical identity theft is a huge, huge problem. And unfortunately, the healthcare industry has been very, very lax in protecting data, including medical insurance records.
Wait, what? That's preposterous.
Isn't it?
That an identity thief could put information in your medical records and they protect his privacy.
Yep. The HIPAA privacy law
is protective. It makes, I mean, when I first found that out, I kept looking for, I must have
had bad information, but nope, that's it. That's our government at work. And even you, I mean,
somebody who's pretty sharp about this, you said you've been the victim of identity theft. I've been scammed.
And I mean, I don't know too many people who have not had some rub up against this,
whether they thwarted it or not, that have been scammed.
Years ago, there was a cartoon called Pogo. And Pogo had a saying, we have met the enemy and he is us. All too often when it
comes to being scammed and when it comes to becoming victims of identity theft, we may be
our own worst enemies. For instance, we put too much personal information up on social media.
So the grandparent scam, which is still going on, and that's where the grandparent gets a call in the middle of the night.
The grandchild is having problems wherever they are.
They've been arrested or there's been a medical emergency.
The scammers gather that information through social media.
I used to like the Big Bang Theory, the show.
And Sheldon used to call his grandmother Meemaw. And so they
could, the bad guys could know from checking out your social media, you call your grandmother
Meemaw. And so they get a call, Meemaw, it's me. I'm in trouble. I need some money. Get it to me
fast. Yeah. Well, it's understandable. Somebody in that situation might panic and send money.
And in fact, I think, wasn't there just some woman,
I think she used to be a police dispatcher who got scammed
or that they attempted to scam her
and they showed up at her door to get the money
and the police were there
and tackled them in the front yard.
Yes, I saw the videos of that.
It was terrific.
But, you know, and along with individuals,
you know, why did the, Willie Sutton, a famous bank robber, was once asked,
why did he rob banks? He said, because that's where the money is. Major, major scams are
perpetrated against companies and government agencies. We've seen that with ransomware and
other. One of the biggest, as far as companies goes, is called the business email compromise.
And what happens is the bad guys get into the computers of a company.
They find out when a particular CEO or CFO is going to be away or on vacation or something.
And then they send an email that appears to come from them asking to wire money to a particular company
that they're doing business with. Of course, there is no company that they're doing business with.
It's going to the scammers. But they now have this deepfake technology, which can be used for
videos as well as audio. And there was a German company in which they had a subsidiary in Britain.
And the criminals were able to get the voice of the CEO of the company from some YouTube videos.
And they were able to take that to do a phone call that sounded exactly like the CEO.
There's an easy technique called spoofing where you can fool your caller ID so you can make it look like it's coming from wherever.
And the scammers picked up a quick $200,000.
Oh, what about, you know, there are these services people can buy that are supposed to protect your identity.
Are they worth it? Do they do a job? Is it at least a minimal level of protection or is it really good or what?
When I describe these identity theft protection services, I say this kind of like you're crossing
the street and you get hit by a bus and someone rushes out to tell you, hey, you just got hit by
a bus. That's what these services do. They don't protect you from becoming a victim of identity theft. They alert you sooner that you have become a victim.
So it's helpful.
You can do these things for yourself.
I think some of them are priced so that, yeah, they may be worth it.
But frankly, the best place to find a helping hand is at the end of your own arm. And the one thing that absolutely none of these identity theft
protection services do, which is the absolute best thing for protecting yourself, is putting
a credit freeze on your credit reports. And now, since 2018, you can do it for your children. And
children, according to a Carnegie Mellon study, are 51 times more likely to become targeted for identity theft than adults.
This can protect you so that even if someone gets your personal information, they're not going to be able to open accounts in your name, which is a big way that people get whacked.
So a credit freeze, easy to do. If you're going to apply for credit, you can go online and lift it so that the creditor, at least a car recently, and they had to check it out, can check my credit report and then put it back on automatically.
So best single thing you can do is freeze your credit and freeze your children's credit.
Isn't it true that a lot of identity theft still happens by people going through your trash.
Absolutely.
And one of my mottos is things aren't as bad as you think.
They're far worse.
So what if you have a shredder and you shred the documents before you put them out?
And in Arizona in particular, there were identity thieves who hired methamphetamine addicts who would stay
up all night piecing together single shredded, you know, just vertical shredded documents. And so if
you're going to shred, which is a great idea, make sure you get a cross shredder.
And I don't put my trash out until the morning, until I hear the trucks coming, just for fear
that somebody could go through that at two o'clock in the morning and take their time
and maybe find something I didn't shred.
Yeah, quite frankly, I don't think that's an unreasonable fear.
Identity theft is high tech, low tech, and no tech.
It isn't just coming through your computer.
It is going through your trash.
This is anything they can do to get the information they will do.
You had mentioned IRS, this being tax season. How do those scams work?
You know, they're twofold. One of them is imposter scams. And this is, according to the Federal Trade Commission, the biggest level of scams that we've had in the last year.
And this is where you get a telephone call, a text message or an email that is coming from some. Maybe it's the FBI. Maybe it's Social Security. And lately, it's from the IRS.
That's spoofing where the scammer very easily can trick your caller ID to make it look like
it's coming from the IRS.
They tell you that, here's the thing that bothers me.
The fact that the IRS has had to put on its website, we don't ask for or take gift cards,
but criminals posing as the IRS will do it. So
under a wide variety of pretexts, they'll ask you for gift cards, credit cards, some kind of payment
that you do over the phone. The other thing is income tax identity theft, which is a multi-billion
dollar problem. Someone gets your social security number, files electronically a tax
return using your number and a counterfeit W-2, they get a big refund. If you file after them,
your return will be held up. And right now the IRS is taking about close to 300 days to process claims for your legitimate refund. So
income tax identity theft, people say, well, you know, they're not getting me,
they're giving the government's money, but you're not getting your refund for pretty much close to
a year. Does the IRS take payments over the phone? I thought they did not.
They did not. And as a matter of fact, I'm glad you mentioned that. People say, how do I know if it's the IRS calling me? How do I know if it's the IRS
sending me an email or a text message? And the real easy way to know it is the IRS never initiates
contact in any of those three manners. The only way they initiate contact is through snail mail. So if you get a phone call,
an email, or a text message indicating it's from the IRS, you know it's a scam.
Well, there is obviously a lot to know if you want to protect yourself. And if you do want to
know more, you can check out Steve's website, scamicide.com. There's a lot on that website you'll find helpful.
The name of the book he wrote is
50 Ways to Protect Your Identity in a Digital Age
by attorney Steve Wiseman.
And there are links in the show notes
to both of those resources I just mentioned.
Thanks for coming on and sharing all this, Steve.
Appreciate it.
Terrific. Great talking with you.
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Negotiation is one of those things, we don't talk about it a lot on this podcast,
because I think people's impression is that negotiation is a very businessy topic or it means we're going to talk about how to negotiate the price of a car, that kind of thing.
But the fact is we all negotiate all the time every day.
And there is a very different approach to negotiation that I have found fascinating.
It comes from a guy named Barry Nailbuff.
Barry is an entrepreneur and professor at Yale School of Management, and he's the author
of a new book called Split the Pie, A Radical New Way to Negotiate. And I really think you're
going to enjoy what he has to say and his approach to this topic, because it is different
than what you've heard about negotiation before.
Hi, Barry. Welcome. Thanks for being here.
Thanks for inviting me.
So start off by explaining how your approach to negotiating is different
and what it is people sometimes miss about what you think a negotiation is? Sure. Most people, it's strange to say,
don't appreciate what it is they're really negotiating over. They think it's over some
total amount as opposed to what would be lost if the two parties don't reach a deal. That is,
they don't understand the actual negotiation pie,
and therefore the arguments they make are really not over the right numbers, which leads people to be confused about power and fairness, and negotiations end up going south.
So explain the pie, because I think of a negotiation as,
I want this, you want that. I don't see it as a pie to split. So explain that.
The pie is how much value is created by an agreement compared to what the parties would get
if they end up working on their own or doing something with other folks.
So let's get specific with a real example that would explain what you just said. I made a rookie error. I filed for a trademark
and didn't realize that trademarks are public the moment you file for them. As a result,
some troll, and I'll call him Edward because that's his name, ended up buying the URL,
the domain name associated with my trademark.
And he offered to sell it back to me for $2,500. Now, Edward doesn't care about fairness.
He's a jerk. From him, it's a zero-sum mindset. It's like, how much money can he get?
And I pointed out to Edward that there's an organization called ICANN, which is
the domain registry. And for $1,300, they have a dispute resolution process. And what Edward had
done is called registration in bad faith. And so I was guaranteed to get that domain name back
if I paid ICANN $1,300. So Edward, look, I'm'm gonna get the domain name either
because we reach an agreement or because I go to I can so the only question from
my perspective is do I pay them thirteen hundred dollars or do I pay you
something and there's no way I'm paying you twenty five hundred when I can get
it for thirteen hundred from I can and enough, he comes right down to $1,100.
But from my perspective now, $1,100 is better than ICANN, but I'm only up $200 and he's
up $1,100.
And so I say, there's a $1,300 pie.
That's what I can save by doing a deal with you and I'm prepared to split it $6 at which point he comes down to 900 kind of halfway between my 650 and his
1100 and he's saying that's the lowest i'll go i won't move anymore and my point is i've made you a
fair offer if you can tell me why we do something different okay but you know what you're proposing is giving you more of the benefit than it is to me, and I don't see why we should do it that way.
And so I stuck at 650, he was at 900, and at the end of the day, I had a principal, he was arbitrary, and he came and said yes to my 650.
So he didn't care about fairness, but he recognized that I do and therefore if
you want to do a deal with me you have to accept the fair outcome see I would
have thought he would have said okay well if you're gonna pay them $1,300 to
take the domain away from me give me 1200 and you can have it right now and
you would have said okay but you didn't say okay I didn't because if I did that he's up $1,200 I'm only $100 better than I
can now fight fire with fire would be I go back to Edward and say I'll give you
100 and then I'm up 1200 but in fact I say look for the same reason that I
wouldn't expect you to accept $200 offer, leaving me $1,100 ahead. You shouldn't
expect me to accept your proposal of $1,100, which leaves you $1,100 ahead and me only $200 ahead.
It's true that I need you to save this $1,300, but you also need me. We need each other,
and that's why we should split it $650, $650. And you got him. And he got me. And we
got each other and we saved the 1300 and I was 650 ahead and he's 650 ahead. So yes, he's a jerk.
Yes, he's a troll. But he also understood the logic of what I was saying and he didn't have
any countervailing logic. So my view is principles beat arbitrary. Well, that's a great example, a great story,
and I like how you appealed to his sense of fairness with whatever sense of fairness he had
by pointing out your sense of fairness, but not everybody will agree with that. I mean,
people come into negotiations often wanting to get as much as
they can possibly get. And that's kind of the job of negotiation in many ways, to get as much as you
can get. And so you're right. The reason for a negotiation is to do better than what they would
get without an agreement.
And the question is, how do you measure that?
So let me give you a real-world example.
My mother had the opportunity to buy the house that she was renting from the person who she was renting it from.
And if she did the transaction with him,
there would be no real estate agent involved,
and therefore they could save a 5% real estate commission which in this case was around $40,000 so the
question is how much of the 40,000 should my mother get and how much of it
should the seller get the seller could say well if you buy this kind of house
from anybody else you'd end up having to pay eight hundred thousand so I should get the full forty thousand or you can pay
seven ninety nine and my mother could say in response if you sell this house
to anybody else after the real estate commission you're only going to get seven
sixty so I'll give you seven sixty one and I'll keep almost all of the $40,000. My view is that the negotiation here
is over-saving the $40,000 real estate commission. Each of them are equally powerful, equally
necessary, and so they should split it $20,000, $20,000. And so what happened? He agreed to that
at the end of the day. Essentially, he said, well, it's a hot market.
And so therefore, you know, I should be getting more of it. And the answer is the hot market is what determines the price from which we subtract the $20,000, not how it is that we divide up the
$40,000. So every negotiation has to start somewhere, somehow. And often I think people throw out a number.
You know, that's the starting point.
That's where we begin our discussion.
Is that a good way to start, do you think?
I like even more the idea of starting off with the rules for how we'll negotiate.
To say to the other side, can we agree that our objective is to create a large pie together
and split it equally?
And understand, is this the person who's going to be a jerk and says, no, my view is I want
to engage in a zero-sum negotiation where I get as much as possible, take advantage
of you, and in the process shrink the pie?
Or are they going to say, yes, great, let's figure out how we can make a big pie together that we can split and equally benefit from.
Something that often seems to derail negotiations is emotion, personality, ego, that, you know, wanting to win or feeling the other person is trying to cheat you and that those emotions get in the way. It's true that a lot of people find emotions to be dominant when they're doing a negotiation.
So I'm a little bit like Spock in the sense that I'm trying to bring some logic back into
negotiations.
And if you can combine Spock logic with Captain Kirk's emotional intelligence, you've really
got it made.
So I appreciate that you should be empathetic and curious about what the other side's interests and positions are.
In fact, one of the things I like people to do
is to make the other side's arguments for them.
You see, we can't always win on every point,
but we can always be understood.
And a great way to demonstrate that you understand the other side's perspective is to make their arguments for them.
Why would you want to do that?
What would be the benefit to you to make the points for the other side?
Seems like you're helping the other side get what they want.
What I'm trying to do is figure out what it is that they want.
Because my goal in negotiation is actually to give them what they want.
The reason is, if they get what they want, then I can get what it is that I want.
And so when people enter into these kind of discussions, negotiations with other people,
what do you think are the things that derail?
What do they do wrong?
What are the mistakes they make?
That's a long list.
So one classic mistake is that they try and anchor with a low ball offer or a super high ask,
and they try and soften up the other side.
But the problem with doing that is that you make yourself untrustworthy. ball offer or a super high ask and they try and soften up the other side but the
problem with doing that is that you make yourself untrustworthy if I'm selling
something that's worth a thousand dollars and you are for me 200 for it
are you trying to take advantage of me do not know what this item is worth if I
were to say yes to that deal, what kind of person are you?
And then you have to come up, say, from 200 to 600 to 750 to 900. And next thing you know,
you've demonstrated that you are just like Gumby. You're totally flexible, that you have no
principles in terms of the way in which you're negotiating. And so by starting at a point that's unreasonably far away
from an appropriate number causes all sorts of troubles in negotiation thereafter.
And so how would you do that otherwise? If someone says, well, make me an offer here,
I'm selling this thousand dollar thing, but without mentioning the number, I'm selling this
thing, what will you give me? And you know,
it's worth a thousand dollars. Wouldn't you want to try to get it for less?
Absolutely. So I'm not saying you start off with a thousand dollars, but I also don't want you to start off with 200. I want you to start off with a number that you can justify. If they ask you
how you came up with that number, a good answer isn't, yeah, I tried to pick this low number
because I read in a book somewhere that's a good way of softening you up and that I can anchor you
with that number. Instead, it's, look, when I see prices on eBay for this, the price is $847.
And I know that you might be able to find somebody who will perhaps overpay. They're really
desperate for it, but I'm prepared to give you the same price as I could find it on eBay.
Would be one way of doing it. So providing some other possibility, giving them a reference,
giving them an argument and a reason for why you're making the number you're making.
What else do people do wrong?
One thing people tend to do is fight fire with fire. But as Smokey the Bear will tell you,
you want to fight fire with water so that when somebody does something that's escalating,
that is inappropriate, don't respond the same way. Find a way to put out the fire.
In one of my negotiations, I once asked for a price that was way too high. And the person on
the other side, the buyer, looks at me, says, great, where do I sign? And then watching my smile grow on my face says,
just kidding.
If you really think that's what is needed,
I'm afraid we don't actually, it's not going to work out.
And it was the nicest possible way of letting me know
that what I had done was just not really appropriate.
As opposed to coming back and making a lowball
offer in response so that's one example of how not to respond in kind when
somebody makes an ultimatum don't make an ultimatum in response figure out how
to walk them off the ledge when somebody somebody acts like a jerk, say,
look, here are my principles. I'm prepared to split the pie with you. I'm not
prepared to do a deal that's unfavorable, that's unfair to me. So if you can give
me a principle in response to show me why my arguments wrong, I'm flexible on that account. Or somebody will lie to you, and that
doesn't mean that you should be lying in response. So there's a lot of fight fire with fire,
as opposed to figure out ways to put out the fire.
Do you think it's a good idea when you're negotiating something with someone else that you keep the discussion strictly on what it is you're negotiating
and what the value of this thing is to you and what the value is to them,
or should you bring in other things like the reasons why you want this?
Is that relevant to the conversation,
or is it better to just stick to what you're talking about and don't elaborate too much?
So imagine a person is selling their family business.
And it's a gas station.
And the reason they're selling it is because they want to go on a sailing trip around the world.
Should they reveal that or not?
Well, you could say it's a
frivolous reason, and so let's keep it hidden. Let's just say I'm planning to retire and spend
more time with my grandkids. But when it comes down to it, there are good reasons and bad reasons
for selling. The buyer knows that you've got a for sale sign, so they're wondering why are you
selling? Is it that there's a leak in one of the storage tanks
and the gas station is about to become
a Superfund cleanup site?
Is the highway exit ramp about to close
so there will be no more cars coming this way?
In fact, the idea that you want to take a trip
around the world is a good reason,
not a bad reason from the buyer's perspective.
And so, yes, go ahead and let them know why it is you are
selling the station. What about, though, if I'm selling something? I just did this not long ago.
I had a piece of equipment that was no use to me, no value to me. It was a piece of recording
equipment that is obsolete. Nobody wants it.
Except collectors.
Collectors collect this type of equipment.
Consequently, it has value to them.
It has virtually no value to me
other than I know it's worth something to a collector.
But I don't want to tell that person it's worthless to me.
I want them to pay me what it's worth to them.
That's true.
So that's a great case.
That's like I said, when the seller values it less than the buyer does, there's a pie.
And that's the time to do the transaction.
So you valued it near zero.
The buyer values it at $1,000.
Great. So you valued it near zero, the buyer values it at $1,000, great. Now it turns out that there are lots of buyers and one values it at $800,
one values it at $900, one values it at $1,000.
Then you want to sell it to the $1,000 person and I think the right price there is more like $950.
Because your alternative is I can sell it to the $900 person. And so that's really my fallback.
The reason I'm selling it to you is to beat the $900.
I can't beat $900 without you.
You can't get this value, this extra value, without me.
And so we have an extra $100 to split,
and that's why I think it should be 50-50.
What else do people maybe miss?
Because it often seems that people,
when they talk about negotiation,
what they're talking about
or what they're thinking about is money,
that it's all about the money.
But as you just said a moment ago,
you like to think there's more than just money.
So what else are people missing
by thinking this is just dollars?
They miss the opportunity to have creative solutions come into play.
So if I go back to my couple selling the gas station,
turns out that when they come back from their trip, they don't have a job.
And as a result, they needed a big reserve fund to help tide them over until they find work.
But the person buying the station
thinks they're great managers,
and they're always short on good managers.
So it would be delighted to have them come back
and work at the station as a station manager
upon their return.
So offer them a job.
And now the person really wants to sell the station
to you rather than to sell it to somebody else. So figure out what the person really wants
and give it to them. Or when you're buying a house, how likely is the closing to happen?
Is the person getting a mortgage? Is there a mortgage contingency? Is there an inspection
contingency? What are you going to do with the furniture that's in the
house? Does the buyer want it? Does the seller want it? Is the closing date? Do you want it to
be soon or do you want to delay it to help the person have a little bit of time to move? So
look for things that can create value that are besides money.
Talk about what happens when you're in the position of you don't know as much as the other guy, that he's more of an expert on whatever it is you're negotiating and you feel kind of stupid.
How do you work that to your advantage if you can?
Well, let's try to at least work that not to my disadvantage, because I am in the
challenging position. One of the things I like to do there is make what's called a contingent
agreement. So imagine the art dealer comes in and sees this painting that I inherited from my
father and says, all right, I'll give you $1,000 for it.
And I have no idea if this painting is worth $2,000, $10,000, $100,000.
And the problem is it could cost me $2,000 to get it appraised,
which could be more than this painting is worth.
So what do I do?
I could come back and just say $2,000 or $5,000, pick some arbitrary number,
which could lose me the deal if it's really only worth $1,000, or perhaps I'll get $2,000,
but the painting is still worth $50,000, and I've missed the big opportunity.
Instead, I prefer saying things like, here's what I'm prepared to do. I'll sell it to you for $1,000, but any money you make above $10,000, we split evenly.
So now, if the painting is worth somewhere between $1,000 and $10,000, okay, fine.
They can make some money on this.
But if this thing is really a hidden masterpiece, now I've protected myself.
So if you don't know what something is worth,
make a deal where you get some share of the upside,
if it turns out to be worth a lot.
And that way you get a piece of the bigger pie.
And it's all about splitting the pie.
It's really a unique way to look at negotiating.
I've never really looked at it this way before.
Barry Nailbuff's been my guest.
He is an entrepreneur and professor at the Yale School of Management, and his book is called Split the Pie, A Radical New Way to Negotiate.
And there's a link to that book in the show notes.
Appreciate you being here. Thanks, Barry.
Have you ever heard of the baker-baker paradox? Basically, it's the result
of research that says it's much easier to remember a person whose profession is a baker than it is
to remember someone whose name is Baker. Why? Psychologists believe it's because when people hear about a man who works as a baker,
it conjures up images and tastes and smells from our past and creates a very vivid impression.
On the other hand, the name baker doesn't mean much.
There's nothing about a generic name to latch onto, so people forget it more easily.
The lesson here is that when you meet someone,
find something visually memorable about them that connects with their name.
When you meet Mr. Baker, imagine he is a baker.
When you meet Bob, imagine his head bobbing up and down like a fishing bobber on the water.
That kind of thing. You get the idea.
It sounds silly, but it's very effective if you want to remember names.
And that is something you should know.
As someone who enjoys this podcast, the best thing you can do to support this podcast is to tell someone else about it who doesn't listen, so it helps us to grow our audience.
I'm Mike Carruthers. Thanks for listening today to Something You Should Know.
Welcome to the small town of Chinook,
where faith runs deep and secrets run deeper.
In this new thriller, religion and crime collide
when a gruesome murder rocks the isolated Montana community.
Everyone is quick to point their fingers at a drug-addicted teenager,
but local deputy Ruth Vogel isn't convinced.
She suspects connections to a powerful religious group. Enter federal agent V.B. Loro, who has been
investigating a local church for possible criminal activity. The pair form an unlikely partnership to
catch the killer, unearthing secrets that leave Ruth torn between her duty to the law, her religious
convictions, and her very own family.
But something more sinister than murder is afoot, and someone is watching Ruth.
Chinook, starring Kelly Marie Tran and Sanaa Lathan.
Listen to Chinook wherever you get your podcasts.
Hi, I'm Jennifer, a founder of the Go Kid Go Network.
At Go Kid Go, putting kids first is at the heart of every show that we produce.
That's why we're so excited to introduce a brand new show to our network called The Search for the Silver Lining,
a fantasy adventure series about a spirited young girl named Isla who time travels to the mythical land of Camelot.
Look for The Search for the Silver Lining on Spotify, Apple, or wherever you get your podcasts.