What is a concession in negotiation?

A concession in negotiation refers to an agreement made by one party to relax or ease their demands in order to facilitate an agreement or to make progress towards a mutually beneficial outcome. This is often seen as a strategic move to foster goodwill in the negotiation process, signal flexibility, and encourage reciprocation from the other party.

Concessions can help build rapport, demonstrate a willingness to work towards a compromise, and create an environment conducive to finding solutions. By making concessions, a negotiator can effectively communicate their priorities and concerns, allowing the other party to feel they are also making gains, ultimately leading to more collaborative negotiations.

In contrast, other options like an ultimatum or a refusal to negotiate do not involve any form of agreement and can close down dialogues. Similarly, showcasing strength as a tactic could lead to a more adversarial approach rather than collaborative, which may not be conducive to reaching an agreement.