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32 Cards in this Set

  • Front
  • Back
  • 3rd side (hint)
Name 6 reasons why impasses occur in negotiations.
1 Emotions
2. Unrealistic aspirations
3. Escalation of Commitment.
4. Poor time management,
5. Fixed pie (belief there is a winner and loser).
6. Sometimes there just isn't an agreement possible.
Another name for "reservation price" and its significance.
"Indifference Point"--The point at which you are indifferent between this and that.

Your BATNA leads to your reservation price. Lets you know when it makes sense to walk away, and when it makes sense to stay.
Aspiration level
Negotiated agreement that you would like to see
Bargaining Zone
The overlap between your reservation price and your aspiration price compared to your negotiating partner(s) reservation and aspiration prices.
When is it okay to change your reservation price during a negotiation?
Since your reservation price is based on a valuation of your BATNA, so you should only change your reservation price if/when you get new information about your alternative.
Why shouldn't you reveal your reservation price?
As soon as you do, you lose your power. (Eg, as soon as you say, “200k is as low as I can go; you’re going to get offered 200k”).

Side note: Don’t reveal your reservation price after the negotiation either. It won’t make your future partner feel good about the negotiation, either. Aka “the high 5 rule”; don’t high-5 after a negotiation. –most people still have a “fixed pie” perception of a negotiation: If they see you as the winner; they will perceive themselves as the loser.
What is the danger or tendency in receiving the first offer?
-If you receive an offer, that is where the tendency will be for the negotiations to anchor. Do what you can to diminish, ignore, or otherwise re-set that anchor. Don’t argue around the offer given as it gives credence to the original offer and further justifies the anchor.
Effect on anchoring.
Two general approaches to negotiation
Distributive
Integrative
Six Characteristics of a Distributive Negotiation.
1. Fixed Pie
2. Win/Lose
3. Negotiation is limited to a single issue. Inflexible.
4. based on Positions.
5. the point of the negotiation is to claim Value
6. it's much more Competitive (than integrative).
Fun When I Play Very Competitively.
6 Characteristics of a integrative negotiation.
1. Expandable pie
2. Win/Win
3. Multiple issues
4. Aligned with interests
5. Creating and claiming value
6. Much more cooperative
Three types of interest-based bargaining:
1. Task - eg How much money. Specific to the negotiation

2. Relational - Every negotiator comes into a negotiation with interests that are independent of the negotiation. Note: Another person’s problem may be your option to create a solution.
3. Personal interests - Need to be respected and recognized. (think of North Korea).
Five Techniques for creating Integrative Agreements
1. Trust
- Build trust. This is how you get the “inside scoop”

2. Ask
- Ask Questions; PREPARATION

3. Give
Give away some information. Trade favors (the other party will feel obligated to give info back).

4. Make
-Make multiple offers simultaneously: present two platforms to which you are indifferent (but don’t tell them that you are indifferent), and have them pick one so you can better tell what is important to them.

5. Search
Search for post-settlement settlements.
Trust
Ask
Give
Make
Search
5 "Don'ts" when creating value.
1. Don’t assume the pie is fixed – don’t assume equal opposites (eg: if I gain 800,000 here, it must mean they are losing 800,000 –wrong.)

2. Don’t compromise – each side gives in a little means money “burning in the trash can”

3. Never say never –test your extremes (don’t think about a fixed pie or “what is good for you must be bad for me”)

4. Don’t forget your aspiration level –IF you get to your aspiration price quickly, don’t settle there, it may be that your aspiration level was too low. Don’t change your reservation price, but you can change your aspiration level.

5. Don’t negotiate issue by issue – Single item negotiations do not create value. Be careful of agendas where “let’s decide on this”, then “let’s decide on this”.
C ompromise
A spiration
N ever

I ssue by Issue
F ixed
8 "influence strategies"
1.Praise
2. Friendliness/Ingratiation (schmoozing works)

3. Inspirational Appeal - "don't you think this would benefit everyone?"

4. Consultation - "I don't think I can afford that car". "Why not? Let me show you some attractive financing options".

5. Legitimacy - Credentials, "Everyone else has signed this". Starbucks tip jar full of bills.

6. Scarcity

7. Exchange

8. Coercive power
TWO benefits of using "Scarcity" as an influence strategy
Not only are people more attracted to your item/offer, they don't know how to value it. What is the value of the object's uniqueness??
Three forms of coercive power.
1. Assertiveness
2. Pressure
3. Coalitions.
Six "Tough Negotiator" tactics
1. Influence strategies

2. Influencing their reservation price (if we know their side better than they do, we're in a great place to influence them.

3. Manage their impressions of your reservation price. --Diminish the value of their alternative.

4. Manage the pattern of concessions. REMEMBER --Little concessions followed by Big concessions are BETTER than big followed by little. L-B > B-L

5. Use Objective Criteria (careful, people have different objective values eg, one person may think the value of a used car is higher than what another person thinks.

6. PACKAGE WITH INTEGRATIVE ISSUES.
I MOP

Influence, Manage, Objective Package
Three ways to build off of "Difference" to Create Integrative Agreements
1. Differences in assessments of the probability of future events
(Class example: an importer and an exporter disagree on the likelihood of a pending embargo agree to make the shipment by air, and if the embargo didn’t take place, the recipient would pay the air freight; if the embargo did take place, the shipper would pay the air freight.

2. Differences in risk preferences
3. Differences in time preferences
5 Strategies for Creating Integrative Agreements
1. Logrolling - Trading off on something you value more than me vs. something I value more than you, and we trade that off.

2. Adding in issues

3. Compensation –caution “money” is very “fixed pie”. Consider Non-monetary and Cost-Cutting.

4. Bridging - The solution is a solution that’s never before been envisioned.

5. Post-Settlement Settlements
Look for money burning in the can, and find ways to bring it back out.
3 Negotiator types
1. “Old-Fashioned” – fixed pie; hard bargain
2. “Flower Child” –It’s all about creating value (some of that is bull)
3. “Enlightened Negotiator”—you want to make claims from the biggest pie there is.
Three approaches to resolving disputes
1. Interests
2. Rights
3. Power
Three types of interests
1. Needs
2. Desires
3. Concerns
Three types of needs in the "Interest-based" approach to solving disputes.
1. Task

2. Personal
- Emotional Issues
- Neglected issues
- Stereotypes (use sparingly) -"Has so-and-so ever done this before?" "Let me see if I can find other cases like this."

3. Relational
Draw inferences from behavior outside conflict situation. What’s going on with your financial situations. What’s this person like outside the negotiation situation. Get information from third parties.
Four types or "Rights" based approaches to solving disputes.
Contractual
Legal
Norms
Fairness
What four types of fairness was discussed in the rights based approach to solving disputes?
Equality
Equity
Need
History
3 steps for what to do when the other side resorts to power.
1. Recognize it
2. Evaluate Credibility
3. Choose a response
- If not credible choose a Deflection-based based approach such as Go to the balcony, Ignore it or Reframe it

If the threat is credible
- Interest based responses include a Firm commitment to interests/mutually beneficial solution/ Ask questions, and/or resort to covert information gathering techniques
- Power-based responses include bringing it out in the open (remind them of the BATNA), Test it, Demonstrate a tough constituency, or Respond with Power
Step 3 contains 2 subsections depending on whether or not you believe the threat is credible.
Why would you use coercive power?
To bring people back to interests.
Describe how to use threats if necessary.
-Recognize risks
• Escalation
• Transaction costs
• Relationship
• Recurrence

-Use threats to defend interests NOT positions

- Be very credible

- Indicate WHAT you are going to do, and WHEN you are going to do it.
- Indicate what the OPPONENT CAN DO to prevent (in other words, give them a solution)

- DO NOT MAKE WIMPY THREATS
Recognize
Interests (are)
Credible
When Oppenents (are)
Wimps
Three types of Coercive Power
Coercion, threats and protests.
Six non-coercive sources of power. NOTE: THESE DO NOT INCUR COSTS.
1. Skill and knowledge
2. Relationship
3. Having a good alternative (a strong BATNA)
4. Elegant solution
5. Legitimacy
6. Affirmative Commitment – have the ability to make a commitment.
7 dangers for power-holders
1. Decreases vigilance preparation and collecting information

2. Decreases self-monitoring

3. Increases oblivion to those with less power

4. Decreases accuracy of situational assessment (perceptions and behavior)

4. Increases conversation domination

5. Increases the likelihood of an individualistic versus joint gain perspective

6. Increases likelihood that others will be unethical towards you

7. Increases ethical standards
Vigilantes
Monitor
Oblivious
Situations (where)
Dominant
Individuals
Unethically (set)
Increasing Ethical Standards (?)
5 Biases that impact negotiations
1. Egocentrism
2. Anchoring and adjustment
3. Escalation of commitment.
4. Fixed-pie bias
5.. Fundamental attribution error