#24. On deals, trust, and karma

24 years have already passed since I graduated from university, and 17 since I finished my MBA. After all this time, I continue to be amazed by the amount of information I once learned and have since forgotten — but also by how a few concepts have stuck in my memory, even if blurry, perhaps even shaped by my own biases. They are no more than one or two per course, but they regularly claim their place in everyday life. This is a reflection on one such concept from my MBA course on negotiations.

For a moment, picture yourself living in an apartment building. You bought your flat a few months ago — maybe even 1 or 2 years already. Mortgage, boxes, unpacking… the whole thing. You certainly plan to live there for a while — perhaps even raise a family. As with any apartment building, you have neighbors next door, upstairs, and downstairs. They’re not necessarily your friends — probably never will be — but you see them from time to time and have a polite relationship: “good morning”, “good afternoon”, “looks like it’s going to rain, huh?”, and so on. One day, not long after you’ve settled, an upset neighbor knocks on your door, complaining about the noise coming from your apartment: you like to organize late dinner parties, and you're still doing some renovations on weekends. How would you approach that conversation?

Now, let’s change the context. You still live in the same apartment, but this time you’re about to move out — in a couple of months, you're gone. The same neighbor knocks on your door with the same complaint. Would you approach the conversation any differently? And do you think your neighbor (who knows you’re leaving) would do so as well?

Although a lot of factors may come into play, it's likely your willingness to compromise and find a mutual solution will be greater in the first scenario than in the second. Knowing you’ll soon move out and never have to deal with that neighbor again makes it easier to ignore their complaint and carry on with your noisy lifestyle. Similarly, your neighbor might become less inclined to engage constructively. Depending on their personality, they might go irate (“I’ve been putting up with your noise for too long!”) or passive (“Whatever, you’re leaving soon anyway”), but not necessarily collaborative.

The same odd dynamics often show up in business. Imagine it’s not two neighbors, but two companies in a business negotiation. In the first scenario, both sides know the relationship is long-term. After this negotiation there will be another, and another — it’s an ongoing, indefinite engagement. How willing are they to approach the next negotiation in a collaborative, win-win mindset, rather than trying to extract short-term advantage at the other’s expense?

Now imagine both parties know this is their last negotiation together. The outcome will have no future impact on their relationship. Would they act differently, and even be willing to betray one another to capture more value? If they believe karma can’t hit them back — that there are no reputational or practical consequences — the temptation to act selfishly and “win” at the other’s expense increases.

A British TV game show called Golden Balls (aired between 2007 and 2009) gives us some wonderful illustrations of this. In the final round, two contestants compete for a cash prize in a zero-sum game. Each is given two balls — one labeled "Split", the other "Steal" — and must secretly choose just one to play. If both choose Split, they share the money 50/50. If one chooses Steal and the other Split, the stealer gets everything and the splitter gets nothing. If both choose Steal, both walk away with nothing. Before revealing their choices, players have around 30–60 seconds to talk, plead, promise, negotiate, or bluff — trying to convince the other to split while secretly deciding whether to split or steal themselves. It’s a version of the Prisoner’s Dilemma, but with real money, real pressure, and often real betrayals. If you're curious, you can watch a few of those moments here, here, or — my favorite — here.

Let’s push this idea one step further. Imagine you're negotiating with a business partner — client or supplier — and you know (or suspect) that they might take advantage of you in your last deal together. But this isn’t the last one; it’s the second-to-last. Would you consider taking advantage of your counterpart already this time, knowing that you expect he’ll take advantage of you in the next one? And if that’s the case, what might be your approach not just for the second-to-last negotiation, but for the one before? Just imagining an end date to a relationship can shift how both parties behave, and how much effort they put into collaboration vs. self-gain.

At risk of stretching the argument, let’s look at marriage through the same lens. Long gone are the days when marriage was legally meant to be a lifelong contract. And regardless of one’s religious beliefs, I think it’s a good thing that people can leave a relationship that makes them unhappy. But… is it possible that knowing divorce is a (relatively easy) way out of a relationship, that option makes some people invest less in building a successful marriage? I remember a few years ago someone — half-serious, half-joking — suggested that marriage should work like a fixed-term contract, to be explicitly renewed every few years. Leaving one’s moral convictions aside, I wonder if the need to “negotiate” a marriage renewal with your partner every few years would increase or decrease the number of separations. Would such a setup make people try harder, or give up sooner?

I do not intend to use this post to offer lessons on negotiations or marriage. And let me be clear, I’m not endorsing any behavior by which it is OK to betray the trust of your counterpart: neither in your last deal, the second-to-last one, or any before that. Quite the opposite, my intent is to underline that in a situation where incentives strongly push you to maximize self-benefit to the detriment of someone else, it’s better to resist the temptation of abusing the other party and instead you should collaborate to the same degree as you would in an ongoing, indefinite relationship. Because in life, there are almost always downstream consequences.

“Karma is a bitch”, they say. And it has no deadline.