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How to Respond to “Take It or Leave It”

How to Respond to “Take It or Leave It”

Have you ever heard one of these statements in the midst of a negotiation?

“That’s the best I can do. Take it or leave it.”

“I simply can’t make any more concessions. Sorry.”

Lots of negotiators use soft ultimatums like these to elicit concessions from the other party, and research shows that they are often

in doing so.

So what can you do when you are at the receiving end of such ultimatums? How can you persist to obtain a better deal for yourself?

Our research identified a surprisingly straightforward way to successfully navigate ultimatums: think about all the choices that you and your negotiation partner have in the negotiation. Or as we think of it, adopt a choice mindset.

A choice mindset is a state of mind in which people have a choice no matter what situation they are in. For example, if a manager says, “I had to fire this employee because of a budget cut — I had no choice,” people in a choice mindset would refuse to believe that the manager did not have any other options, and instead they’d believe that there must be something that the manager could have done to avoid the firing.

We reasoned that negotiators with a choice mindset may similarly believe that the other party must have some options available even if they say that they are at their limit. If this is the case, then when faced with ultimatums, they would ignore the ultimatum, or discount the credibility of the ultimatum, and instead believe that there is still room to negotiate. As a result, they would be more likely to continue negotiating.

In a paper
recently published in Organizational Behavior and Human Decision Processes, we describe six studies that found that asking negotiators to think about all the choices that they and/or their counterpart have leads them to continue negotiating even when they receive ultimatums. This was true in what researchers call “distributive negotiations,” in which one party’s gain is the other party’s loss, and in “integrative negotiations,” in which the two parties can create greater gains for both sides by making tradeoffs between their competing priorities.

One reason why thinking about choices helps people ignore ultimatums is that they believe that there is more room to negotiate, despite what their counterpart says. Within a distributive negotiation, this might mean that negotiators believe that their counterpart is able to make additional concessions. For integrative negotiations, negotiators might believe that there are other issues that haven’t yet been discussed which could yield greater gains. As a consequence, negotiators in a choice mindset received better outcomes in the end. Indeed, we found that the choice mindset improved negotiation outcomes in a wide variety of contexts, such as buying a used car, negotiating a job offer, and negotiating a B2B sale.

For example, in one experiment, we assigned 206 negotiators in the laboratory into pairs, and asked them to negotiate the price of a used car. We instructed one group of car buyers to think about all the choices that the car sellers had within the negotiation, and the other group of car buyers to think about all the constraints that the sellers faced. We found that buyers who were asked to think about the sellers’ choices paid $614 less for the car than those who were instructed to think about the sellers’ constraints.

In a similar experiment, we asked one group of would-be salary negotiators to think about the choices the hiring manager had in providing not just higher pay but in providing better health insurance, less work-related travel, or more vacation days. We found that when the hiring manager told participants that there is nothing more that they can offer, negotiators who were asked to think about choices were more likely to want to persist in the negotiation compared to negotiators who were asked to think about constraints.

Our experiments also revealed that there are specific behaviors that negotiators can do to activate the choice mindset. For example, when planning for a negotiation, you should make a list of all the choices that you believe that you and your counterpart possess. You might write these down on a piece of paper with your choices on one side and the other party’s on the other. Then, bring that paper with you to the discussion to remind yourself of the choices during the negotiation.

Be sure to think broadly about what those choices might be. For example, here is the prompt that we gave to participants in

our used car experiment
: “Now, please think of the choices that the seller has within this negotiation. For example, the seller may have choices in terms of the exact price that they can accept for the car, and they may have choices in terms of their ability to offer you extra car accessories.”

In all our studies, we examined how the choice mindset worked in relatively low-stakes situations, but of course real life is full of many high-stakes negotiations. It’s possible that the stress of a difficult high-stakes negotiation might cause people to forget to focus on choices. Therefore, a prompt ahead of time may not be enough and you may need to make additional efforts to continuously adopt a choice mindset throughout the discussion.

Next time you’re preparing for a negotiation, be sure to think through all the choices that you and your partner have within the negotiation. Instead of caving in response to a “take it or leave it” ultimatum, you may just have the confidence to believe that there is still room to negotiate and get what you want.

Anyi Ma
is a doctoral student at the Fuqua School of Business, Duke University.

Yu Yang
is an associate professor at the School of Entrepreneurship and Management, ShanghaiTech University, China. Before joining ShanghaiTech, he taught at the Johnson Graduate School of Management, Cornell University in the U.S., and the China Europe International Business School (CEIBS) in China.

Krishna Savani
 is the Provost’s Chair in Business at Nanyang Business School, Nanyang Technological University, Singapore.


Key Ideas

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Take It Or Leave It

The soft ultimatum tactic of the words ‘take it or leave it’ creates a false closure, benefiting the negotiators.

They apply this method to falsely limit your opti...



The Choice Mindset

Rather than getting influenced by the limited set of options provided to you by the other party (which tricks you into a vortex of limited options), it is better to adopt a choice mindset. One has ...



Ignore The Ultimatum

Thinking about choices makes us ignore the false ultimatums provided by the other party. Have the inner confidence to believe that there is still room for negotiation to get what you want, ...




Your Final Decision

While making your final decision, keep in mind that:

  • You are clear about your deadline for signing the job offer.
  • Assert your deadline continually.
  • U...

Companies Love Negotiating

Companies like you to submit early in the negotiation and be done with it, so it's best not to fall in their traps and pressure tactics.

Respectfully moving forward, showing transparency and maturity signals to the company that you are not just playing games, and are moving towards a final decision. Being honest, open and communicative is the key.

Negotiating is all about relationship, with communication being the bedrock.

Not Just About Money

  • There are various dimensions in a job to be motivated by, not just what you get paid. Your training period, kind of work, kind of team, and the other things you value, like work-life balance, for instance.
  • You also need to understand what the company values. Salary is a recurring cost, that increases over time while being a subject of gossip due to inequality. A joining bonus is a one-time expense and isn't public.
  • There are other perks to negotiate for, like relocation bonus, which can be easier to arrange.

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Successful Negotiation

The most successful negotiators don't entertain dirty tricks in negotiation but instead strive to reach agreements that are satisfactory to both parties.

But if you find yourself on...

Jet Lag

Used on negotiators who travel long distances: to start meetings while the negotiator's concentration is impeded due to jet lag or fatigue. Jet lag seriously impairs judgement. 

Tip for the negotiator: Travel early and leave time for recuperation before meeting the other party. Where you suspect your hosts like to be hospitable, keep news of your early arrival quiet. 

It's different over here

A dirty trick often used against people visiting other cultures.

The approach of "but we always do it this way over here" can be difficult to counter if you're not prepared for it.

Tip for the negotiator: If you suspect this approach in advance, have with you a local expert who knows the customs. 


Refers to your “best alternative to a negotiated agreement,” or the best outcome you can expect if you fail to reach agreement at the bargaining table with your counterpart. 

An e...

Negotiate the process

Carefully negotiate how you will negotiate in advance. Discussing procedural issues will clear the way for much more focused talks.

Don’t assume you’re all on the same page when it comes to determining when to meet, who should be present, what your agenda will be, and so on. 

Building rapport

You and your counterpart may be more collaborative and likely to reach an agreement if you spend even just a few minutes trying to get to know each other.

 If you’re negotiating over email, even a brief introductory phone call may make a difference. This is one of the most valuable negotiation skills to master.