Negotiations Test 2

What are the BATNA basics

Anchoring

Good Cop/ Bad Cop

Lowball/Highball

The Red Herring

Nibble

Aggressive Behavior

Snow Job

Creating and claiming value

result of non-zero-sum where the objective is to have both parties do well

Integrative Bargaining

Claiming value: result of zero-sum where the object is to gain largest piece of resource

Distributive Bargaining

Bargaining negotiations that focuses on positions

Distributive

Bargaining negotiations that focus on interest

Integrative

Rigid Demands

Positions

The things we really want or need

Interests

The party with the ___ to lose has the least leverage

most

The party with the __ to lose has the most leverage

least

A critical variable in negotiation and dynamic factor based as much on perception as facts and has three types of ways in negotiations

The power or advantage someone has during a negotiation.

leverage

is a negotiator's ability to provide things that his opponent wants

Is needs-based

Positive Leverage

 is a negotiators ability to make his opponent suffer

Threat-based

Negative Leverage

• Using rules, standards, or expectations to support your argument.

• Example: Showing that other employees in the same position earn more to support your salary request.

derived from which party has the most to lose from no deal

normative leverage

Meaning when you give more you get more 

Willingness to share encourages others to be reciprocal 

Reciprocity

People make decisions based on potential gains and losses, but they usually fear losing something more than they enjoy gaining something.

prospect theory

• People may prefer a guaranteed outcome over taking a risk, even if it means sacrificing some income.

• Example: Choosing a guaranteed $50 instead of risking it for a chance to win $100.

• part of the prospect theory

Certainty

• People feel losses more strongly than gains.

• Example: Losing $50 feels worse than finding $50 feels good.

• part of the prospect theory

Loss aversion:

People tend to be most interested in their relative gains and losses as opposed to their final income and wealth. If your relative position doesn’t improve, you won’t feel any better off, even if your income increases dramatically.

• part of the prospect theory

Relative positioning

People tend to under-react to low-probability events. So, you may completely discount the probability of losing all your wealth if the probability is very small. This tendency can result in people making super-risky choices.

• part of the prospect theory

Small probabilities

Placing a higher value on an object that you already own than

the value you would place on that same object if you did not own it.

There are two primary psychological drivers:

1. endowment effect

   1. ownership

   2. loss aversion

An agent is a person charged with representing the interest of another (a principal) in negotiations with a third party

someone outside of the organization they are alone and represent a particular principal and someone you hire 

Independent Agents

An agent where he/she is a part of the organization on whose behalf they are negotiating 

Non-Independant Agents

What are the agency Issues

1. Information Asymmetries

2. Divided Interests

3. Conflicts of Interest

One party has more information than the other

Information Asymmetries

Few organizations have members who are all of one mind regarding their core interest

Divided Interest

Most agents have personal agendas (goals, incentives, concerns) and that may conflict with the principal's agendas.

Conflict of interest

whatever the other does, each is better off confessing than remaining silent

If you cheat, you get an advantage, If everyone cheats, everyone suffers

If everyone cooperates, everyone benefits

The Prisoners Dilemma

A closing technique used to provide choices to the other party.

Involves bundling various offers together into packages that have similar costs

Packaging