Neg Ch2 Flashcards
What are the three ways to prepare for negotiation
Self assessment
Situational assessment
Other party assessment
What are the things to do in a self assessment?
Develop a BATNA
Determine reservation point
Determine target point
Don’t be under aspiring, over aspiring, or not know what you want.
What are some things to be aware of re self assessment
Beware of anchors
Power of sunk costs
No falling in love-have several options
Don’t let the other party manipulate your BATNA
Identify issues in negotiation and Alts for each
Create multiple equivalent issue packages
Don’t state ranges
What are strategic tactics
Cooperative or competitive tactics
Sharing vs threats and demands
BATNA gain frame
Risk averse-maximize gains, accept a sure thing
BATNA loss frame
Will hold out- minimize losses don’t make concessions hold out for value
What is BATNA
Best alternative to a negotiated agreement
Characteristics of BATNA
Time sensitive
Not what you want. It’s a real option
Reservation point is set st BATNA
Reservation point determination
Brainstorm Alts
Evaluate each alt
Attempt to improve BATNA
Example of reservation pt calc: prob of selling house at 265,000=60%. Get offer of $250,000 or higher=95%. 5% chance no offer.
Value of reducing price=265,000.6=159k
Value of reduce to $250.35=$87,500
Value of renting the house =100k*.05=$5k
Reservation price =159k+ 87.5k+ 5k = 251,500 this means that at no time would you settle for a deal less than this.
Focal points
Arbitrary numbers like last 4 digits of social that anchor you to a price.
Sunk costs
Should not be taken into consideration during negotiations. Unless used on another person.
Strategic risk
Risk associated with the cooperative or competitive tactics that people will use during neg
Contractual risk
Risk associated with the willingness of other party to honor terms.
Counter factual thinking
When some agonizes over what could have been. What might have been but did not occur.
Sure thing principle
If one choice makes he most sense out of all of the choices, then it should be chosen overall. You would choose this regardless of the point of uncertainty.
Situation assessment
Is this a one shot, long term or repetitive negotiation?
How will this negotiation create trust?
Situation assessment hangs to think about
Is this a long term or one shot Are there scarce resources ideologies Is this necessity or opportunity? Negotiation transaction or dispute? Agreement required? Is this legal? Linkage effects?
What are linkage effects?
Some negotiations affect other negotiations. Past precedence may affect this negotiation
Additional situational assessment factors
What kind of constraints are there? Are contracts official/unofficial? How does time play a factor? Where do the negotiations take place? Are hey public or private! Third party intervention possible? Who makes first offer? Are there multiple options? Precedence? Power differential? How do they communicate-explicitly/tacitly
