Essence of Negotiation: Understanding Appeasement and “The Great Munich Stereotype”


William P. Bottom is the Joyce and Howard Wood Distinguished Professor in Business at Washington University in St. Louis, Missouri. His e-mail address is


The relative merits of rational choice and behavioral approaches to the study of negotiation continue to be hotly debated. This article tests qualitative postdictions (assertions or deductions about something in the past) from these paradigms as well as the alternative approach of new institutional theory against the extensive record of negotiation process, contractual form, and contract implementation from the Paris Peace Conference of 1919. I find the incomplete relational form of the peace treaty to be consistent with the behavioral and new institutional concepts and find that only behavioral theory can explain how unilateral German moves unraveled the treaty during the 1930s.

But the historical record further reveals that the close fit between the behavioral paradigm and these events is more than coincidence. I also discuss the role of conference participants, particularly John Maynard Keynes and Walter Lippmann, in establishing the basis for modern behavioral science. The behavioral paradigm emerged from efforts to understand and fix serious policy mistakes such as those made in the peace negotiations. The study of human error was intended to serve as the basis for broad-based organizational solutions. Finally, I discuss the impact of “the Munich stereotype” on such recent events as the planning for the American invasion and reconstruction of Iraq; such examples suggest continued imperfections in the system of organized intelligence that has actually evolved in the United States.