Dealmaking: The New Strategy of Negotiauctions (Second Edition)

A setup move establishes your terms of entry into a negotiauction situation. A rearranging move reconfigures the assets, the parties, or both, in a way that creates additional value in the deal. And a shut-down move cuts off same-side-of-the-table competition.

game-changing moves appear regularly, across industries and across countries: setup moves, rearranging moves, and shut-down moves.

in the event that someone else (read: Samsung) bid for AuthenTec, Apple could pay $138 million (= 38 percent of the total acquisition price) to acquire a nonexclusive license to certain fingerprint recognition technologies. So, if Apple acquired AuthenTec, Apple could keep the fingerprint technology out of Samsung’s hands; but if Samsung acquired A

MBOO analysis revealed that the sales reps were systematically destroying value by bidding too low, which increased their chance of winning the business but reduced the profits to the company

Professor Howard Raiffa’s maximum bid of others (or MBOO, pronounced “maboo”) analysis, which captures the fundamental trade-off in graphical form.

To bid in a disciplined way, you trade the likelihood of winning against the profits from winning. Some sophisticated dealmakers do this instinctively.

when the number of potential buyers is large, use an auction to maximize value, but beware that it’s possible to have too much of a good thing.

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Auction theorists call these kinds of auctions all-pay auctions, because all bidders must pay something, regardless of whether they win the prize. All-pay auctions are bad for bidders and great for sellers.