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Questions and Answers
What is Sofia's resistance point when negotiating for the condo?
What is Sofia's resistance point when negotiating for the condo?
Jackson's resistance point is $140,000.
Jackson's resistance point is $140,000.
False
What is the bargaining interval (spread) in this negotiation?
What is the bargaining interval (spread) in this negotiation?
$10,000
Sofia's asking price is __________.
Sofia's asking price is __________.
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Match the following terms with their definitions:
Match the following terms with their definitions:
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Why is the spread between resistance points important?
Why is the spread between resistance points important?
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Both parties should accept offers below their resistance points to maintain negotiation morale.
Both parties should accept offers below their resistance points to maintain negotiation morale.
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What does negotiation resistance refer to?
What does negotiation resistance refer to?
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Study Notes
Buyers' and Sellers' Negotiation Dynamics
- Resistance Points: Defined as non-negotiable limits; they indicate the highest price a seller will accept and the lowest price a buyer is willing to pay.
- Sofia's resistance point is $130,000, the maximum she can spend on Jackson's condo.
- Jackson's resistance point is $150,000, the minimum price he will sell the condo for.
- The bargaining interval is established between these resistance points, in this case, $10,000.
Key Pricing Strategies
- Sofia’s asking price is $145,000, positioned strategically above her resistance point but below Jackson's.
- Jackson's target price, inferred, is $140,000, indicating the ideal price he hopes to negotiate towards.
Importance of Spread
- A smaller spread in resistance points generally increases the likelihood of reaching an agreement.
- The bargaining interval impacts negotiation dynamics; a narrow gap lessens the potential for contentious negotiations.
- If Jackson seeks $140,000 for the condo, he might benefit from pricing it slightly higher, encouraging Sofia to accept a closer offer.
Negative Bargaining Consequences
- Accepting offers significantly below the opposing negotiator's resistance point can lead to negative bargaining, where both parties feel undersold.
- This strategy can diminish morale and satisfaction in the negotiation process.
- It is essential for negotiators to respect the resistance points to foster positive outcomes and maintain goodwill.
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Description
Explore the dynamics of condo negotiations through the lens of Sofia and Jackson's bargaining ranges. This quiz will test your understanding of resistance points and target points in negotiation scenarios. Hone your negotiation skills by analyzing the buyers' strategy in real estate.
