NEGOTIATIONS Notes

BATNA

Biggest Source of Power in a Negotiation

ZONE OF POTENTIAL AGREEMENT (ZOPA)

Biggest Source of Power in a Negotiation

ANCHORING

“People with incomplete info make

estimates starting from an initial value (anchor) and adjusting to provide a

final answer. The adjustments are

usually inadequate. Irrelevant (as well

as relevant) numbers can serve as anchors and influence perception of the

bargaining zone.”

Does

Making First Offer lead to a better outcome?

–YES,

the more certain you are of counterpart’s BATNA!!

–Not

necessarily if uncertain.

Receiving

First Offer –

Anchor

minimized

if counter focuses on info inconsistent with first offer (i.e., discount it,

ignore it) – focus on counterpart’s BATNA or r, your target price

Anchor

maximized

if counter focuses on info consistent with first offer (the anchor), your

BATNA.

MULTI-ISSUE (INTEGRATIVE) BARGAINING

The Benefit of Differences

INTEGRATIVE BARGAINING TIP-OFFS

· Can the Negotiation have >1 issue?

· Is there openness to discussion?

· Do parties have different preferences across issues?

NEGOTIATIONS