1. Chapter 7 Tactics

2.  Tactics definition: Actions that players take to shape the perceptions of other players  “Fog” The term used by the author to describe how players change others’ perceptions by holding back or not revealing all of their secrets.

3. Three tactics to use 1. Lift the fog 2. Preserve the fog 3. Stir up new fog

4. 1. Lift the Fog  If you have the goods, put your money where your mouth is: Accept a pay-for-performance Offer a guarantee Give free trials Advertise  Example: Salary performance driven?

5. Lift the Fog  What you don’t do sends a signal Example: Toxic waste plant  Ask other people to demonstrate their credibility to you: Propose a pay-for-performance Ask for a guarantee Request a free trial

6. 2. Preserve the Fog  Hiding information Having made a favorable impression, people try to preserve it by:  Burying projects they’ve turned down  Following the herd  Creating reasons to fail Example: ET

7. Preserve the Fog  Negotiation Tactics Mistakes:  Revealing the minimum you need  Making threats explicit  Trying to resolve differences of opinion between you and the other party

8. Preserve the Fog  Negotiation Tactics Solutions:  Establish a settlement escrow  Bring in a mediator to help the other party understand the consequences of nonagreement  Recognize what you and the other party do and don’t have to agree on.

9. 3. Stirring up the Fog  Complex Pricing Schemes Hide high prices Disguise opportunistic pricing Hide low prices to preserve quality Hamper comparison shopping Confuse and frustrate customers Encourage secretive price cutting by competitors  Example: Nintendo, Powerpoint

10. Conclusion  Everything you do and don’t do sends a signal  You can change the game by changing people’s perceptions