HBS's Working Knowledge has a great article on dealing with irrational negotiators.
Mistake 1 : They are not irrational - they are uninformed
Mistake 2 : They are not irrational - they have hidden constraints
Mistake 3 : They are not irrational - they have hidden interests
After having dealt with a couple of people who seemed to be irrational - this provides a good framework on how to approach these negotiations.