In his new book Good for You, Great for Me: Finding the Trading Zone and Winning at Win-Win Negotiation, Massachusetts Institute of Technology professor Lawrence Susskind offers the following steps for coping with difficult counterparts who seem irrational at the bargaining table:

1. Don’t respond to irrational behavior in kind, lest you make a bad situation even worse.
2. Don’t make unilateral concessions in an effort to win over the other party. Doing so will only encourage them to continue their bad behavior.
3. Don’t lose your cool out of frustration. Instead, take a break before you lose your temper.
4. Consider bringing others from your organization to the table, and encourage your counterpart to bring colleagues with him or her as well.
5. Put forth proposals that meet your interests very well and that seem to meet your counterpart’s interests at least reasonably well.
6. Prepare for each interaction carefully. Before sitting down to negotiate, talk with others in your organization and rehearse as often as possible.
7. After each meeting, summarize what transpired in writing and distribute copies to everyone involved. This will put your counterpart on notice that you are aware of his game.
8. If your counterpart refuses to respond to a set of reasonable proposals by a reasonable deadline, understand that it may be time to walk away and pursue other alternatives—then do it.

(source: Harvard Program On Negotiation)