Negotiation power is perceived or real power which influences the outcome of negotiations. It is extremely rare for the power in negotiations to be one sided, or for the balance of power to remain consistent throughout negotiations. As people negotiate, power can shift from one side to the other in response to changing circumstances. Understanding how negotiation power works and how it can be manipulated is a critical part of negotiating successfully; numerous books and workshops cover this subject in exhaustive detail for people who negotiate professionally.
In negotiations, both sides have something the other wants. For example, when people sit down to work out the details of a real estate deal, one side wants the real estate, and the other side wants the money. Thus, each side immediately has some negotiation power, through manipulating their control over the thing the other side wants. Likewise, when someone negotiates over salary, that person has skills a company wants, and the company has a position that person wants to fill.
A number of factors can influence negotiation power. One is behavior during the negotiations; people who are confident and assertive, for example, generally have more perceived power even if they lack actual power. Likewise, different approaches to negotiations can cause ebbs and flows in negotiation power, depending on how these approaches are perceived by the target of the negotiations. Someone who works very aggressively, for example, might wind up backed into a corner without any power when the other side starts calling bluffs.
External factors also play a role in negotiation power. Individuals outside the negotiations may have an interest in how the negotiations proceed, and they may be able to influence the outcome of the negotiations. In the real estate example above, for example, someone else could make a better offer in the hopes of getting one of the parties to back out of the deal. This better offer could in turn be used for leverage to increase negotiation power.
Any time someone enters negotiations for something, it pays to research ahead of time to learn as much as possible about the other side, and to get some information about the balance of power. Having this information before one starts negotiating can be extremely valuable. This technique is used by everyone from diplomats to casket salesmen; knowing as much as possible about who one is working with increases the chances of working out a deal in one's favor.