2NG3 - Midterm Prep

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What is the Goal setting paradox?

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What is the Goal setting paradox?

Negotiators who focus on ideals do not feel as satisfied as negotiators who focus on their reservation point or BATNA

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True or false: A positive bargaining zone is when negotiators' reservation points overlap

TRUE

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True or false: A negative bargaining zone is when a negotiators reservation points don't overlap

TRUE

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What is the amount of overlap between parties' reservation points is called?

Bargaining surplus

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The positive difference between the settlement outcome and the negotiator's reservation point is called___________?

Negotiators surplus

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True or false: Your BATNA is not static and can improve over time.

TRUE

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True or false: Always reveal your reservation point

FALSE

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True or false: Your aspiration, or target point, defines the upper limit on what you can get in a negotiation

TRUE

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When negotiators make proposals that the other party considers extreme

Chilling Effect

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promotion-focused negotiators

conceptualize goals as ideals and opportunities

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prevention-focused negotiators

conceptualize goals as obligations and necessities

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Occurs when the negotiations first offer is immediately accepted by the counterparty

Winners Curse

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Makes one's first offer one's final offer

Boulwarism

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5 Counter tactics when buyer makes the first offer:

1. Ignore the anchor

2. Counter anchor

3. Separate leverage from information (Info is what they want, leverage is why they are telling you)

4. Clarify

5. Reject the anchor

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Predicts when and why making the first offer helps or hurts negotiators

Anchoring Information Model (AIM)

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True or false: When both parties has good information, it is wise to make the first offer.

TRUE

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True or false: When both parties have a lack of information, it is wise to make the first offer.

TRUE

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True or false: When two parties have asymmetric information, it is wise to make the first offer.

FALSE

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The first offer that falls within the bargaining zone acts as a powerful anchor point in negotiation

Anchoring Effect

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refers to doing just enough to reach one's minimum goals.

Satisficing

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capturing all the potential gain in a situation.

Optimizing

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Intra-organizational

within the same organization

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Inter-organizational

Involves two or more organizations.

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Integrative Agreements (Win-Win)

Both negotiators optimize the potential joint gains.

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Meaning that if parties work together, they can create more joint value than if they are purely combative

Variable sum:

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when parties have incentives to cooperate as well as compete.

mixed-motive

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Whatever is good for one person must ipso facto be bad for the other party. (one party's win is another party's loss)

Fixed pie (Fixed sum)

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What is soft Bargaining?

They resign themselves to capitulating to the other side.

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What is hard bargaining?

They prepare themselves for attack

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A negotiator that sets the target point too high and refuses to make any concessions. (Too tough)

aspiring negotiator or positional negotiator

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Wants what the other party does not want to give—and does not want what the other party is willing to offer.

Reactive devaluation (bias)

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What does reservation point mean?

The absolute minimum point a negotiator sets for themselves.

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salient numbers, figures, or values that appear to be valid but have no basis in fact.

focal point

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Money that has been invested that is, for all practical purposes, irrecoverable.

Sunk costs

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refers to the riskiness of the tactics that negotiators use at the bargaining table.

Strategic risk

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refers to the risk associated with the willingness of the other party to honor its terms.

Contractual risk

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BATNA risk

Given BATNA of equal expected value, the more risk adverse negotiator will be in a weaker bargaining position.

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The value of an object should be about the same, whether we are a buyer or a seller.

Endowment effects

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An important component in determining whether a person experiences regret.

Counterfactual thinking

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Often the most important parties are not present at the negotiation table.

Hidden table

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a transaction occurs, and no future ramifications accrue to the parties.

one-shot negotiation

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are situations in which negotiators must renegotiate terms on some regular basis.

Repetitive negotiations

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Money is paid for good or services.

transactional negotiations:

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negotiations take place because a claim has been made by one party and has been rejected by the other party.

Disputes

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In some situations, a person negotiates without any intention to reach an agreement.

False negotiations

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refer to the fact that some negotiations affect other negotiations.

Linkage effect

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refers to whether parties on the same side of the table are in agreement with one another concerning their interests in the negotiation. ("Of one voice")

Monolithic

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considering how the counterparty thinks about the negotiation

Perspective-Taking

Note: it is more effective than negotiators who engage in empathy (i.e., How they feel)

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refers to unwarranted levels of confidence in people's judgment of their abilities and the likelihood of positive events while underestimating the likelihood of negative events.

overconfidence effect

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Determine a variety of different combinations of the issues that all achieve the target or aspiration point.

Multi-issue proposals

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a group formed when two or more people or groups temporarily work together to achieve a common goal.

coalitions

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Ratification

refers to whether a negotiating party must have a contract approved by some other body or group.

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Time Horizon

the amount of time between the negotiation and the consequences or realization of negotiated agreements

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When reservation points overlap.

The bargaining zone

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What does ZOPA stand for?

Zone of Possible Agreement

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Positive bargaining zone

negotiators' reservation points overlap

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negative bargaining zone

negotiators reservation points don't overlap

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The amount of overlap between parties' reservation points.

Bargaining surplus

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The positive difference between the settlement outcome and the negotiator's reservation point.

negotiators surplus

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argues that counterparties are influenced by both endpoints of the range as they evaluate the proposer's reservation price as well as how polite they believe an extreme counter-offer would be.

The tandem anchoring account

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The reductions that a negotiator makes during the course of a negotiation.

Concessions

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refers to the tendency of negotiators to reciprocate concessions.

Concession reciprocity

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refers to the tendency for some negotiators to be disinclined to make concessions.

Concession aversion

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Unilateral concessions

concessions made by one party

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bilateral concessions

concessions made by both sides

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premature concessions:

They make more than one concession in a row before the other party responds or counteroffers.

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When the seller made gradual concessions, the buyer's reaction was most positive, with high satisfaction (Being tough at the beginning)

Graduated reduction in tension (GRIT) model

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the arguments or persuasive rationale that often accompanies an offer.

Substantiation

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critique the negotiated object or service (e.g., "It's not worth more )

disparagement rationales

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refer to one's own limited resources (e.g., "I can't pay more ...")

- Constraint rationales

Note: Negotiators who highlight their own constraints are more successful than negotiators who argue down the value of an item.

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also known as "blind justice", prescribes equal shares for all. Outcomes are distributed without regard to inputs, and everyone benefits (or suffers) equally.

Equality rule

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also known as "proportionality of contributions principle", prescribes that distribution should be proportional to a person's contribution.

Equity rule

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also known as "welfare-based allocation", states that benefits should be proportional to need.

needs-based rule

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people pay themselves substantially more than they are willing to pay others for doing the same task

egocentric bias

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Occurs when people believe that their interests are incompatible with the other party's interests when in fact, they are not.

False conflict (illusory conflict)

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The belief that the counterparty's interests are directly and completely opposed to one's own interests.

The fixed-pie perception

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Focuses on how negotiators divide resources.

Distributive negotiation

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refers to reaching a middle ground between negotiators' positions

compromise

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Truly integrative negotiations are ones in which all opportunities are leveraged so that no resources are left on the table.

pareto optimal:

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is the set of outcomes corresponding to the entire set of agreements that leaves no portion of the total amount of resources unallocated.

The pareto efficient frontier

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The strategy of trading off so as to capitalize on different strengths of preference. (making concessions on low-preference versus high-preference issues).

Logrolling

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a personal need for structure.

Epistemic motivation

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if you share information, the other party will often share as well.

principle of reciprocity

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When negotiators believe they are revealing more than they actually are

The illusion of transparency

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involves presenting the other party with at least two (and preferably more) proposals of equal value to oneself.

MESOs: Multiple Equivalent Simultaneous offers

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occurs in advance of the parties undertaking full-scale negotiations and is designed to be replaced by a long-term agreement.

Pre-settlement settlements (PreSS)

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Negotiators reach an initial settlement that both parties agree to, but then spend additional time attempting to improve upon

Post-settlement settlements

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is a single salient coordinating concept, shared by negotiators

focal point

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a departure that takes place during the course of negotiation, when the trajectory seems to change.

turning point

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the beliefs held by people about personalities.

implicit theories

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refers to the fact that negotiators believe they are coming on too strong, but they are not.

The line-crossing illusion

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negotiators who desire to maximize the difference between their own and the other's outcomes, thereby "winning" or "beating" the other party.

Competitive Negotiator

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negotiators who like to maximize joint gain and prefer to minimize differences in outcomes.

Cooperative negotiator

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negotiators who prefer to maximize their own gain and is indifferent to how much the other person is getting.

Individualistic Negotiator or self-interested negotiator

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refers to the negative social reaction directed at women who are seen as violating gender norms because they engage in counter-stereotypical (agentic) behaviors during negotiation.

The backlash effect

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is a verbal or physical display of shock, disgust or disbelief made to an opening offer. (how to overcome angry negotiators?)

strategic flinch

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refers to the ability to accept inconsistencies in behavior

Dialectical thinking

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what is integral emotion?

related to the situation

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What is Incidental emotion?

lacking a clear target in the situation

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refers to the action-reaction cycle that results in genuine anger and diminishes trust in both the negotiator and counterpart.

blowback effect

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