By Douglas Clark
While many theorists view negotiation as a rational exercise, the truth is that negotiations are ‘messier’ in real life. They are influenced by our experiences, emotions, trust, and behavioural complexities.
‘Game theory’ offers insight into behavioral complexity, specifically the Prisoner’s Dilemma, which we detail a little later. One clear strategy that emerged as particularly effective in such scenarios is Tit-for-Tat (TFT). This article explores how TFT can assist negotiators at the start of a negotiation. It includes its practical application, a real-world example, and a highlight of TFT’s limitations.
A competitive/self-serving or co-operative approach – The Red/Blue game
First, to understand which approach we might take, often depends on perspective, and perspectives always differ. Do we think we need to start strong and aggressive, given the other party’s reputation for being a difficult negotiator, or should we begin cooperatively? Some will perceive the situation that you “catch more flies with sugar than with vinegar,” so we need to be cooperative. Team members may see the same situation differently. One team member may feel that an aggressive or assertive stance is the best way to start, while another may believe it is the wrong approach.
To appreciate this, we must consider and understand the Red/Blue game, which models a version of the prisoner’s dilemma, a hypothetical scenario in which two criminals are held in separate cells. Each is offered a deal: betray the other for a reduced sentence of one year, while the partner gets eight years. Alternatively, if both trust and remain silent, both will serve a two-year sentence. For more details on the prisoner’s dilemma, please see TED-Ed, 2012, www.youtube.com/watch?v=t9Lo2fgxWHw
This self-protection often results in a defend myself position, a “I had no choice” situation. The fear that the other might defect often leads to mutual betrayal, leaving both parties worse off, where co-operation and mutual silence would technically yield a better outcome for both.
The red/blue game is multiple rounds of “prisoners’ dilemma.” In each round, two players independently choose either red (competitive or selfish) or blue (cooperative). Outcomes depend on both players’ choices; points are awarded or lost accordingly. Over time, and often with added communication in later rounds, players realise that consistent cooperation, such as “both playing blue”, can yield better long-term results than repeatedly trying to win each round alone. However, mutual cooperation is fragile; if one player defects, trust breaks down, and the game often reverts to a red/red outcome or a lose-lose outcome.
This game is frequently played and used in negotiation seminars as a team exercise. For more information, please click here for instructions on how to play, rules, and additional details.
This game forms the behavioural foundation of Axelrod’s work.
From Game to Strategy: Where Tit-for-Tat Began
Political scientist Robert Axelrod, in the early 1980s, challenged scientists and computer programmers to submit computer programs that could play repeated rounds of the prisoner’s dilemma.
His goal was to discover which strategies performed best across multiple pairings. The most successful entry came from Professor Anatol Rapoport and was known as Tit-for-Tat (TFT). It operated on a simple logic: it began with cooperation, and in each subsequent round, it simply mirrored the opponent’s previous move. If the other player cooperated, TFT responded in kind; if they defected, TFT retaliated once. Did not hold any grudges, and if the opponent returned to a cooperative stance, TFT would adopt the same. This strategy consistently outperformed others. (Axelrod, 1984). The success of TFT lies in its simplicity, and there are effectively three rules.
Always start cooperatively to signal good intent. (play blue)
We always copy exactly what the other player played in the last round in our next round.
Never hold a grudge and forgive instantly.
It doesn’t always produce harmony. If the other player deadlocks in red, we end up in a red/red deadlock, so to speak. It is not perfect, but the two players will always be in a similar situation. TFT does not ignore bad behavior, but neither does it escalate endlessly.
From model to meeting room
TFT encourages reciprocal behaviour and discourages exploitation. For instance, if a negotiator opens with goodwill, such as fair terms, is flexible, and is open to sharing information, then this behaviour is met in kind, and the tone is set for a cooperative relationship. If the other party attempts to take advantage, a TFT approach allows the negotiator to mirror that behaviour firmly, signalling that cooperation must be mutual. This balance between firmness and cooperation is beneficial at the start of negotiations, when trust is low and behavioural signals are being assessed. For example, offering a small but fair concession might invite a matching concession from the other negotiator. Over time, this reciprocal pattern can build and reinforce trust. It also protects and or defends the negotiator should the other negotiator fail to match that goodwill, as the negotiator can respond similarly.
The Opening Stance – Tit-for-Tat in Action
The often debated and controversial first stance is always a difficult decision to make. We discussed earlier that conversations between team members, depending on their perspective, may differ and highlight a common problem in early negotiations. Should it be strong, or emphasise cooperation? Some may fear being seen as weak, while others may worry about appearing aggressive.
To address both concerns, they could consider a Tit-for-Tat strategy. They can start cooperatively but respond proportionally to the other party’s behaviour. The relationship can be built gradually if the other negotiator responds to a cooperative opening with reasonable terms or shared risk. If, instead, they push hard or try to exploit the situation, a proportional firm response (for example, reasserting deadlines, tightening clauses) signals boundaries without ending the relationship. This way, TFT enables the negotiator to project strength without aggression, satisfying both perspectives and their concerns.
Axelrod’s work also emphasises the importance of “the shadow of the future,” the idea that if parties expect to deal with one another again, they are more likely to cooperate. Communication enhances this effect. In negotiation, open dialogue allows both sides to understand expectations, clarify misunderstandings, and make small cooperative moves to test intentions. TFT becomes even more powerful when communication is present, as it enables parties to correct course, reframe offers, and reset cooperative behaviour after breakdowns.
If early discussions with the other negotiator include both parties wanting long-term partnership goals and shared expectations, this would help embed the logic of TFT. It will guide both to consider cooperating, as it is mutually beneficial in the long run.
What Could Go Wrong? Limits of the Model
TFT is not without its limitations. The most obvious risk is the potential for deadlock. Suppose one party misreads the other’s move as hostile due to an error or miscommunication. In that case, a retaliation-type response may escalate the conflict unnecessarily, as it was never intended. Without forgiveness or clarification, this can spiral into tit-for-tat retaliation loops, damaging relationships. In cross-cultural negotiations, TFT may backfire if behavioural cues are misinterpreted.
TFT also assumes a certain level of rational control over the interaction. In highly asymmetric power dynamics, one party may dominate, and then a TFT may not create enough leverage to protect the ‘weaker party. Thus, while TFT is useful in many negotiations, it requires careful calibration and should not be used rigidly and with caution.
Real-Life Example.
A practical example can be seen in long-term supplier negotiations. In one case, a UK-based distribution firm opened talks with a new logistics provider. The distributor agreed to flexible dispatch times if the provider was prepared to guarantee 24-hour delivery. Initially, everything went smoothly, and both parties worked together, mirroring each other’s small commitments. However, when the provider missed agreed-upon windows, the distributor responded by removing next-day priority jobs and reverting to basic service contracts. When service improved again, the distributor, without grudge, reinstated premium orders. This TFT strategy maintained discipline without resorting to formal disputes or breakdowns and ultimately built a mutual understanding over time.
Conditional Cooperation Wins
The Tit-for-Tat strategy offers negotiators a powerful way to start negotiating, build trust and cooperation without appearing weak.
A TFT strategy could balance both concerns (start strong or cooperative) and rely more on what they receive to determine their behaviours. However, the strategy is not without limitations. Misunderstandings, misinterpretations of signals, cultural mismatches, and inflexible application can turn cooperation into a deadlock. Like any tool, TFT must be used with awareness and adapted to context. When applied with care, it provides a foundation for principled negotiation grounded in mutual respect and strategic reciprocity.