Neg Ch2

Question 1

What are the three ways to prepare for negotiation

Answer 1

Self assessment
Situational assessment
Other party assessment

Question 2

What are the things to do in a self assessment?

Answer 2

Develop a BATNA
Determine reservation point
Determine target point

Don’t be under aspiring, over aspiring, or not know what you want.

Question 3

What are some things to be aware of re self assessment

Answer 3

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

Question 4

What are strategic tactics

Answer 4

Cooperative or competitive tactics

Sharing vs threats and demands

Question 5

BATNA gain frame

Answer 5

Risk averse-maximize gains, accept a sure thing

Question 6

BATNA loss frame

Answer 6

Will hold out- minimize losses don’t make concessions hold out for value

Question 7

What is BATNA

Answer 7

Best alternative to a negotiated agreement

Question 8

Characteristics of BATNA

Answer 8

Time sensitive
Not what you want. It’s a real option
Reservation point is set st BATNA

Question 9

Reservation point determination

Answer 9

Brainstorm Alts
Evaluate each alt
Attempt to improve BATNA

Question 10

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.

Answer 10

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.

Question 11

Focal points

Answer 11

Arbitrary numbers like last 4 digits of social that anchor you to a price.

Question 12

Sunk costs

Answer 12

Should not be taken into consideration during negotiations. Unless used on another person.

Question 13

Strategic risk

Answer 13

Risk associated with the cooperative or competitive tactics that people will use during neg

Question 14

Contractual risk

Answer 14

Risk associated with the willingness of other party to honor terms.

Question 15

Counter factual thinking

Answer 15

When some agonizes over what could have been. What might have been but did not occur.

Question 16

Sure thing principle

Answer 16

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.

Question 17

Situation assessment

Answer 17

Is this a one shot, long term or repetitive negotiation?

How will this negotiation create trust?

Question 18

Situation assessment hangs to think about

Answer 18

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?

Question 19

What are linkage effects?

Answer 19

Some negotiations affect other negotiations. Past precedence may affect this negotiation

Question 20

Additional situational assessment factors

Answer 20

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