Unplugged 4 - slides sesh 1-6

What is negotiation?

• A basic means of getting what you want from others.”

• “A process which potentially offers benefits from an interaction in which two or more parties, apparently in conflict, search for a more satisfactory result through joint action than that which they might otherwise obtain.” (Fisher & Ury, 1981)

What are the basic features of negotiation?

• Interdependence: Parties rely on one another; complete independence means no negotiation, while dependence can lead to unbalanced imposition.

• Perception of Conflict: The recognition that a conflict exists which needs resolution.

• Possibility of Strategic Interaction: The chance to influence and respond to the other party’s moves.

• Possibility of Agreement: The potential to reach a mutually acceptable outcome.

What are some common outcomes of negotiation?

• Unwise results

• Damage to relationships

• Outcomes that may not maximize joint benefits

What distinguishes win-win from win-lose negotiations?

• Win-Win: A cooperative, interest-based approach where parties create additional value jointly.

• Win-Lose: A competitive structure with a negative linear correlation between gains and losses (often exemplified by the “chocolate cake” scenario).

How does the prisoner’s dilemma relate to negotiation?

It’s a game theory model illustrating that when parties act only out of self-interest without cooperation, both may end up with a lose-lose outcome.

What are other dispute resolution methods when negotiation fails?

• Mediation: A neutral third party helps disputants reach a consensus without imposing solutions.

• Arbitration: A neutral third party acts as a judge, delivering a decision that is usually final and confidential.

• Litigation: Involves a formal judicial process with a judge or jury resolving the dispute publicly.

What are the different ways to classify types of negotiations?

• By Parties Involved: Bilateral, trilateral, or multilateral.

• By Reiteration in Time: Occasional versus successive negotiations.

• By Number of Issues: Unidimensional (single issue) versus multidimensional (multiple issues).

• By Structure:

  • Competitive: Win-lose, zero-sum (e.g., “chocolate cake” negotiation).

  • Cooperative: Win-win, non-zero-sum (e.g., adding new variables like “cloud” or “strawberry and chocolate cake”).

What is ZOPA?

The Zone of Possible Agreement—the range within which an agreement is satisfactory to both parties.

What is the anchoring effect in negotiation?

It’s the phenomenon where the first offer sets a reference point that influences subsequent negotiations, often biasing judgments towards the initial number.

What are the four elements of negotiation in an interest-based approach?

• Interdependence: The freedom or restriction of choice among parties.

• Perception of Conflict: Recognizing that a disagreement exists.

• Possibility of Strategic Interaction: The ability to engage and react strategically.

• Possibility of Agreement: The potential to find a mutually acceptable solution

What are the stages of the negotiation process?

• Preparation: Setting goals, determining reservation values, and identifying parties and weaknesses.

• Encounter: The initial meeting and exchange of information (both emotional and rational).

• Debate: Engaging in discussion, making offers/counteroffers, and negotiating terms.

• Closing: Finalizing the agreement with a “Yes” or a “No.”

• Implementation: Executing the agreement reached.

What key elements are involved in the preparation stage?

• Defining opinions and goals

• Establishing reservation values (RV)

• Identifying the parties involved and their respective strengths and weaknesses

• Preparing alternatives, including the BATNA (Best Alternative to a Negotiated Agreement)

What strategies can be used when responding to an initial offer?

• Anchored Counter-Offer: Make an aggressive counteroffer with justification, then suggest moderation.

• Ignoring the Anchor: Focus on other relevant information rather than getting anchored to the initial offer.

• Separating Information from Influence: Introduce external factors or alternative offers to dilute the anchoring effect.

What is the negotiation dilemma in terms of cooperation versus competition?

• Competition (Claiming Value): Involves non-disclosure, deceit, strict claims, and threats.

• Cooperation (Creating Value): Requires clear communication, openness, creativity, and a willingness to solve problems together.

How does successive negotiation influence strategy?

• The first round may offer little information, while later rounds allow parties to adjust based on previous behavior.

• Successive rounds increase the importance of learning from earlier interactions and can favor a tit-for-tat strategy.

What is the tit-for-tat strategy and why is it effective in successive negotiations?

It starts with cooperation and then mirrors the other party’s previous actions. It builds reciprocity and trust over multiple rounds, aiming for mutual benefit while avoiding unnecessary conflict.

What role does BATNA play in negotiations?

BATNA (Best Alternative to a Negotiated Agreement) is the fallback option if no deal is reached. It serves as a benchmark for whether to accept an offer or walk away.

What are the key elements of a preparation list for negotiations?

• Parties

• Interests

• Objectives

• Object (issues/variables)

• Alternatives & BATNA

• Options (Best aspirational option + RV)

• External Criteria of Legitimacy

• Persuasive Elements

What does the Avant Case illustrate about negotiation strategies?

• It involves collective bargaining between Avant Group management and union committees.

• Highlights the tension between cooperative and competitive tactics in successive rounds.

• Demonstrates how a matrix of payments, reservation values, and ZOPA guide decision-making.

• Emphasizes that a cooperative long-term strategy (e.g., tit-for-tat) can be more beneficial than pure competition.

How to be successful in a Tit-for-Tat Strategy?

Don’t be envious of the other party: Comparison/envy = self-destruction. Act with generosity, better to compare with someone else in our shoes. Tit-for-tat focuses on maximizing individual total after all rounds).
• Avoid Unnecessary Conflict: Don’t be the one breaking the trust (unless there is no gain in the future or a final round with no reputational or spillover risks).

• Reciprocity with Patience: Act with reciprocity (optimal level: T4T, T42T, T43T? the greater the danger, the greater the patience).
• Clear Cooperation Signaling: Signal your intentions (show them with acts, no words.

Concealing only in zero-sum games, in successive intrinsic room for cooperation).

Tit-for-Tat Strategy

Winning strategy in successive games: Tit-for-Tat (starting off by cooperation and from then onwards, imitate

see AVANT case