It has been observed that one of the differences between the “street-wise” and the rest of us is that we often negotiate our way out of difficult circumstances while the street-wise rarely negotiate and will choose to either fight or flee.

Robert Mnookin has written a book, Bargaining with the Devil, that gives a formal framework for the negotiate or else decision. He is the chair of the Program on Negotiations at the Harvard Law School, so he is a pretty good source.

His basic framework is that you need to dispassionately (emotions always get in the way of logic) think about five points:

1. What are my interests and what are my adversaries interests?
2. What are my alternatives to negotiation and what are my adversaries alternatives? [Understand your, and his, BATNA’s.]
3. Is there a potential deal that is better than the BATNA for each of us?
4. What will it cost me to negotiate? Not all costs are in dollars. Time, emotion, reputation, and self-image are also factors.
5. If we reach a deal, is there a reasonable prospect that it will be carried out? You can always put penalties for nonperformance from third parties in the deal.