Author: Peter Frantzen

Why trust is the silent partner in every high-stakes deal

Imagine two hunters. They can either each chase a rabbit (a guaranteed but small reward) or cooperate to hunt a stag (a much bigger win, but only if both fully commit).

That’s the Stag Hunt, a classic game theory model.

And it plays out all the time in B2B negotiations. In theory, both parties benefit most by pursuing the joint optimum. But in practice, fear of being left hanging leads one or both sides to settle for a lesser but safer option.

Here’s how it shows up:

• A supplier won’t invest in custom tooling because they’re unsure the buyer will commit long-term.
• A client wants innovation, but won’t share enough information to enable it.
• A strategic partnership fails to launch because neither side wants to go first.

These aren’t failures of logic — they’re failures of trust and coordination.

In high-stakes negotiations, the size of the prize often depends on how well you can manage uncertainty, build credibility, and signal commitment.

If you want the stag, you can’t just say it, you have to show it. You need to convince the other side you’re in it with them. Build transparency into your actions. Ensure commitment is visible across various levels of the organization. Embed structures into your agreements that reinforce mutual investment.

Trust isn’t built on promises. It’s built through risks taken together.

Follow this series as we explore other real-life games that shape negotiation behavior and how to play them wisely.

#Negotiation #GameTheory #Strategy #Trust #B2B #CreatingSharedSuccess

… and Why It’s Risky in Negotiations

Two cars. One road. Both speeding toward each other. Who swerves first…? Who “blinks”?

Welcome to the Game of Chicken — a game of escalation, brinkmanship, and bluffing.

Almost every negotiator can tell a tale about it:

• One side threatens to walk away unless their demands are met (”take it or leave it”).
• Both parties push harder, waiting for the other to yield.
• Stakes rise. Deadlines loom. Neither wants to be the one to “give in.”

And sometimes?… They crash.

Chicken is about who’s more committed to not giving in — or at least appears to be. But in B2B negotiations, playing Chicken is dangerous, both for the initiator and for the counterparty. You risk long-term relationships for short-term wins, possibly creating reputational damage that outlasts the deal. You might back yourself into a corner with no room to maneuver. And if you allow the game to be played, you educate the other party as to what is acceptable, setting a precedent.

So what’s the smarter play?

✅ Know when to project resolve — and when to signal flexibility.

✅ Prepare your alternatives — so you’re not bluffing with nothing behind you.

✅ Read the other side’s constraints carefully. Are they really playing Chicken — or just holding firm?

To play Chicken, be sure there are few alternatives available to the other side. To counter Chicken, having a good BATNA gives you a way out.

This is part two of our series on game theory — or rather: game practice — in B2B negotiation. Missed part one? Catch up on “The Prisoner’s Dilemma”. Next up: the Stag Hunt — and the trust it takes to pursue shared value.

#Negotiation #GameTheory #Strategy #B2B #CreatingSharedSuccess

Are you facing the Prisoner’s Dilemma without realizing it?

You’ve probably heard of the Prisoner’s Dilemma: Two suspects. One deal on the table. If they both stay silent, they both get light sentences. If one confesses, they walk free while the other gets punished. If both confess, they both lose.

The twist? Even if they agreed to stay silent beforehand, once separated, each must act alone — with no guarantee the other will stick to the plan. Acting in pure self-interest leads to worse outcomes for both.

In B2B negotiations, this dilemma shows up more often than you think:

• Two suppliers independently decide whether to honor a non-compete gentlemen’s agreement — or secretly undercut each other.
• Two business units must decide whether to share critical knowledge — or hoard information to boost their own standing.
• Two companies agree to maintain pricing discipline in a fragmented market (without collusion), but each privately weighs whether to defect for short-term gains.

How to Navigate It

In Prisoner’s Dilemma settings, trust and relationship structure are key. You need to either remove the opportunity to defect — or change the game.

Here’s how:

✅ Limit the possibility to defect: Wherever possible, install contractual safeguards, verification procedures, or auditing rights — so that deviating from the agreement is both risky and costly.

✅ Increase transparency: Create mechanisms where actions are visible — making betrayal riskier and easier to detect.

✅ Use contingent agreements: Tie your concessions to verifiable actions (“If you do X, then we will do Y”) to enforce cooperation step by step.

✅ Build repeat interactions: When players know they’ll meet again, the incentive to defect weakens as there is opportunity to retaliate. Frame deals as ongoing relationships, not one-offs.

✅ Start by cooperating — but protect yourself: Use the Tit-for-Tat approach: cooperate first, mirror their behavior after. It rewards collaboration without being naive.

✅ Strengthen shared incentives: Highlight and structure mutual long-term gains, making it more profitable to collaborate than to cheat.

In negotiations, recognizing when you’re trapped in a Prisoner’s Dilemma — and knowing how to shift the structure — can make the difference between lasting success or destructive outcomes.

👉 This is the first part in a series on negotiations mindsets through the lens of game theory. Follow along as we unpack more real-world “games” behind B2B negotiations.

#Negotiation #B2B #Strategy #GameTheory #CreatingSharedSuccess