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Split the Pie
Book

Split the Pie

A Radical New Way to Negotiate

Barry Nalebuff
HarperBusiness, 2022

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Editorial Rating

10

Qualities

  • Applicable
  • Concrete Examples
  • Engaging

Recommendation

Yale Business School professor Barry Nalebuff offers an innovative new way to negotiate based on the principles of game theory. First, identify the “pie”: the value parties generate by making the deal. Then, calculate how to divide the gain created by an agreement. Nalebuff’s clever, refreshing negotiation approach isn’t simply theoretical. It’s one he used successfully when selling Honest Tea, the company he co-founded, to Coca-Cola. Splitting the pie isn’t limited to high-stakes negotiations, either. It also works in situations such as breaking a lease, buying a car, proposing a benefits package or even haggling at the flea market.

Take-Aways

  • The “negotiation pie” is the additional value created by an agreement that negotiating parties can’t produce on their own.
  • Proportional divisions are unfair in certain contexts. A rule for dividing the pie must be fair regardless of the context.
  • In pie negotiations, both parties make equal contributions to the pie and have equal power, regardless of their BATNA.

About the Author

Barry Nalebuff is the Milton Steinbach Professor at the Yale School of Management and is the co-author of several business books, including Thinking Strategically and Mission in a Bottle.

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