Final Review Flashcards
People with this fixed-pie perception take one of three mindsets when preparing for a to the negotiaton
- Resign themselves to capitulating to the counterparty
- Prepare for hard bargaining with the counterparty
- Compromise in an attempt to reach a midpoint between opposing demands
It is commonly assumed that ______________ are necessary by one or both parties to reach an agreement.
concessions
The fixed-pie perception is almost always ________ and often leads to an ___________ approach to negotiations.
wrong, ineffective
True or False:
Mixed-motive decision-making is a more accurate model of negotiation that involves both cooperation and competition.
True
Effective preparation for a negotiation econcompasses three general abilities. They are:
- Self-assessment
- Assessment of the counterparty
- Assessment of the situation
Identifying what you want may sound straightforward, but three majors problems often arise. The are:
- Under-aspiring negotiator (the Winner’s Curse)
- Over-aspiring or positional negotiator
- The grass-is-greener negotiator
What is a BATNA?
Best Alternative To a Negotiated Agreement
Four things to remember about your BATNA:
- Wishful, they are factual
- Time sensitive
- Do not let the other party manipulate your BATNA
- Negotiators should be willing to accept any set of terms superior to their BATNA.
Your reservation point is the ___________ of your BATNA.
Quantification, with respect to other alternatives.
How do you quantify your BATNA?
- Brainstorm your alternatives
- Evaluate and order each alternative’s value
- Attempt to improve your BATNA
- Determine your reservation price based on facts.
When determining your reservation point, be aware and knowledgeable of the following:
- Be aware of focal points
- Beware of sunk costs
- Do not confuse your target point with your reservation point
- Identify the issues in the negotiation
- Identify the alternatives for each issue
- Identify multi-issue proposals of equivalent value
Most people are ____-seeking when it comes to losses, and _____risk-averse when it comes to gains.
risk, risk
____________ points define what people consider to be a gain or a loss.
Reference
Negotiators should consider the differential impact of three sources of risk. They are:
- Strategic Risk - refers to the riskiness of the tactics that negotiators use at the bargaining table
- BATNA risk - given BATNAs of equal expected value, the more risk-averse negotiator will be in a weaker bargaining position.
- Contractual risk- refers to the risk associated with the willingness of the other party to honor its terms.
Differences in negotiators’ reference points may lead buyers and sellers to have different __________ for the same object
valuations
What is the sure thing principle?
When faced with uncertainty about an event occurring, people are reluctant to make decisions and will delay decisions until the uncertain event is known.
- Paradox of this situation is that no matter what happens, people choose to do the same thing
- Violations of the sure thing principle are rooted in the reasons people use to make their decisions
- in the presence of uncertainty, people bay be reluctant to think through the implications of each outcome.
The overconfidence effect refers to what?
A negotiator’s unwarranted level of confidence in the judgment of their abilities and the likelihood of positive events.
- This effect also causes people to underestimate the likelihood of negative events.
- When we find ourselves highly confident of a particular outcome, it is important to examine why we fell this way.
What do we need to identify in regards to the other negotiation party?
- Who are the other parties?
- Are the parties monolithic?
- Identify counter-parties’ interests and positions
- Research the counter-parties’ BATNAs
Research the negotiation:
- Is the negotiation one shot, long term, or repetitive?
- Does the negotiation involve _______ resources or _______?
- Is the negotiation one of _______ or opportunity?
- Is the negotiation a transaction or a ________ situation?
- Are _______ effects present?
- Is __________ required?
-scarce, ideologies
- necessity
- dispute
- linkage
- agreement
What is ZOPA?
Zone of Possible Agreements - represent the range between each party’s reservation points. Can be positive or negative.
In a positive bargaining zone, negotiators’ reservation points ________?
overlap
In a negative bargaining zone, there is no _________ overlap between the parties’ reservation points; therefore, parties should pursue other __________ rather than spending fruitless hours trying to reach an agreement.
positive, alternatives
The amount of overlap between negotiating parties’ reservation points is called
bargaining surplus - it is a measure of the value that a negotiated agreement offers to both parties compared to the value of not reaching a settlement.
The negotiators’ surplus is the ____________ difference between the settlement outcome the negotiators’ ___________ point.
positive, reservation
There are four pie Slicing Strategies:
- ) Assess your BATNA and improve it
- ) Determine your reservation point, but do not reveal it
- ) Research the counterparty’s BATNA and estimate their reservation point.
- ) Set high aspirations. (Be realistic, but optimistic.)
- ) Make the first offer (if you are prepared)
- ) Immediately re-anchor if the other party opens first
- ) Plan your concessions
- ) Support you offer with facts.
- ) Appeal to the norms of fairness
- ) Do not fall for the “even split” ploy.
“Face” is the value a person places on his/her _______ ______, reputation and vis-a-vie other people in the negotation.
public image
When a person’s “face” is threatened, it can tip the balance of their behavior away from cooperation toward competition, resulting in an impasse.
Three fairness principles:
Equality rule: prescribes equal shares for all
Equity rule: prescribes that distribution should be proportional to a person’s contribution
Needs-based rule: states that benefits should be proportional to needs
Three social comparisons are:
- Upward comparison
- Downward comparison
- Comparison with similar others
A number of goals and motives drive social comparisons, such as:
- Self-improvement
- Self-enhancement
- Accurate self-evaluation
Equity exists in a relationship if:
each person’s outcomes are proportional to his or her inputs. Complications arise if two people have different views of what constitutes a legitimate investment, cost, or reward and how they rank each other.
People use the following means to eliminate the tension arising from equality:
- Alter the inputs
- Alter the outcomes
- Cognitively distort inputs or outcomes
- Leave the situation
- Cognitively distort either the inputs or the outcomes of an exchange partner
- Change the object of comparison
Procedural Justice - people evaluate not only the _________ of outcomes but also the fairness of the procedures by which those outcomes are determined
fairness - People’s evaluations of procedural fairness determine their satisfaction and willingness to comply with outcomes.
Egocentric ___________ of responsibility and fairness are attributable to the ways in which people process information, such as:
- ) selective encoding and memory
- ) Differential retrieval
- ) Informational disparity
judgments
What guidelines should we live by when slicing the pie?
- Consistency
- Simplicity
- Effectiveness
- Justifiability
- Consensus
- Generalization
- Satisfaction
What is the most valuable piece of information when it comes to slicing the pie?
A negotiator’s BATNA
Negotiators should not reveal their _______ _________ and never lie about their __________
reservation price, BATNA
A negotiator who is well versed in the ___________ of _________ is at a pie-slicing advantage.
psychology, fairnessiatio
A win-win negotiation does NOT equate to any of the following actions:
-Compromise
-Even split
-Satisfaction
-Building a relationship
Win-win negotiation really means that all creative opportunities are leveraged and no resources are left on the table - we call these outcomes integrative negotiations.
The following are questions for negotiators to ask when assessing the potential of a negotiation situation:
- Does the negotiation contain more than one issue?
- Can other issues be brought in?
- Can side deals be made?
- Do the parties have different preferences across negotiation issues?
Most common pie-expanding Errors:
- False conflict - The lose-lose effect
- Fixed-pie perception - thinking that conflicts are purely win or lose situations
Most commonly used win-win strategies:
- Commitment to reaching a win-win deal
- Compromise
- Focusing on a long-term relationship
- Adopting a “cooperative orientation”
- Taking extra time to negotiate
Effective Pie-Expanding Strategies:
- Perspective-taking
- Ask questions about interests and priorities
- Reveal information about your interests and priorities
- Unbundle the issues
- Logrolling and value-added trade-offs
- Make package deals, not single-issue offers
- Make multiple offers of equivalent value simultaneously
- Structure contingency contracts by capitalizing on differences
- Pre-settlement settlements
- Search for post-settlement settlements
The framework of an integrative negotiation has five major components:
- Resource assessment
- Assessment of differences
- Offers and trade-offs
- Acceptance/rejection decision
- Prolonging negotiation and renegotiation
True or False:
Negotiators are usually not aware that their outcomes are inefficient
True
True or False:
Key reasons for lose-lose outcomes are illusory conflict and the fixed-pie perception
True
A ___________ ____________ is a group of three or more individuals, each representing his or her own interests, attempting to resolve perceived differences of interest.
Multiparty negotiation
Four challenges of multiparty negotiations:
- Dividing resources
- Coalitions
- Formulating trade-off
- Voting and majority rule
Majority rule fails to recognize the strength of individual preferences
True
Strategies negotiators can use to enhance their ability to expand and slice the pie in a multiparty context.
- Know who will be at the table
- Manage the information and systemize proposal making
- Brainstorm options
- Develop and assign process roles
- Stay at the table
- Strive for equal participation
- Allow for some points of agreement, even if only on process
- Avoid the “equal shares” bias
- Avoid the agreement bias
- Avoid sequential bargaining
Coalitions face three set of challenges:
- The formation and size optimizations of the coalition
- Trust formation and maintenance in coalitions
- The complex distribution of resources among members
Interpersonal strategies for effectively navigating coalitions and maximizing their effectiveness:
- Make your contacts early
- Seek verbal commitments
- Use unbiased-appearing rationale to divide the pie
Advantages to using Principal-Agent Negotiations:
- Expertise
- Substantive knowledge
- Networks and special influence
- Emotional detachment
- Ratification
- Face-saving
Dis-advantages to Principal-agent negotiations:
- Shrinking ZOPA
- Incompatible incentive structure
- loss of control
- Agreement at any cost
Strategies for negotiators who want to work effectively with agents:
- shop around
- Know your BATNA before meeting with your agent
- Communicate your interests to your agent without giving away your BATNA
- Capitalize on the agents’ expertise
- Tap into your agent’s sources of information
- Use agent networks
The following are strategies for negotiators who want to work effectively with agents:
-Discuss ratification
-Use your agent to help save face
-Use your agent to buffer emotions
(principle agent relationship - Real estate agents)
Constituent relationship - a constituent is ostensibly on the side as the principle negotiator, but exerts and independent influence on the outcome through the principle negotiator
YEAH!!!!
Challenges for constituent relationships:
- Behind the table barriers
- Accountability
- Conflicts of interest
Strategies for improving constituent relationships:
- Communicate with your constituents
- Do not expect homogeneity of constituent views
- Educate your constituents on your role and limitations
- Help your constituents do horizon thinking
Team Negotiations increase the incidence of integrative agreements Advantages are:
- Increased size of negotiating pie
- Increased information exchange amongst negotiating parties
- Increased information exchange which leads to greater judgment accuracy about parties’ interests
- Integrative agreements are promoted
Challenges for Team Negotiation:
- Teammate selection
- Number of people on the negotiating team
- Communication on the team
- Team cohesion
- Information processing ( the common information bias)
Improvement Strategies for Team Negotiation:
- Goal and strategy alignment
- Preparing together for the negotiation
- Plan scheduled breaks
- Assess accountability
Challenges for Inter-group negotiation:
- Shared versus individual identity
- in-group bias
- Extremism
Strategies for optimizing inter-group negotiations such as:
- Separate conflict of interest from symbolic conflict
- Search for common identity
- Avoid the out-group homogeneity bias
- Conditions required before contact
- The GRIT model strategy
True of False:
Multiparty negotiations require all of the pie-slicing and pie-expanding skills of two-party negotiations
True
Key challenges of multiparty negotiations:
- development and management of coalitions
- complexity of information management
- voting rules
- communication breakdowns