Distributive Bargaining Strategies

Study Notes

Distributive Bargaining Overview

Distributive bargaining is also known as competitive or win-lose bargaining.
The negotiation goals of one party directly conflict with the other party’s goals.
Key components include positions, concessions, and tactics involved.

Jackson's Situation

Jackson aimed to sell his condo and buy a new one after deciding to move closer to work.
After 14 months without successful offers, he finally reached an agreement on the selling price.
Jackson postponed the closing date by six months due to not finding a new condo, which caused frustration for the buyer, Barbara.

Concessions and Adjustments

To accommodate Barbara’s concerns, Jackson adjusted the sale price as a concession for the delayed closing.
Concessions play a crucial role in negotiations, impacting the outcomes and relationships between parties.

Market Dynamics

The condo market was limited in the desired area, complicating Jackson's search for a new home.
A humorous remark about sleeping in a tent indicated the urgency of finding suitable housing before the fall season.

New Condo Opportunity

Jackson encountered a potential new condo listed by seller Sofia at $145,000.
The asking price was $10,000 above his target but $5,000 below his maximum willingness to pay.
Higher costs for the condo would reduce his ability to make necessary alterations and purchase new furnishings.

Strategic Considerations

The example illustrates the negotiation dynamics in a distributive bargaining context.
Recognizing hardball tactics is important for effective negotiation; the text encourages understanding and countering such tactics.

Distributive Bargaining Overview

Distributive bargaining, also known as competitive or win-lose bargaining, involves parties with conflicting goals.
Key elements include negotiation positions, concessions, and tactics used throughout the process.

Case Study: Jackson's Condo Transaction

Jackson aimed to sell his condo and purchase a new one, leading to a lengthy 14-month sales process.
After receiving an offer, Jackson postponed closing the sale for six months, causing inconvenience for the buyer, Barbara.
To facilitate the delayed closing, Jackson compromised by adjusting the selling price.
Barbara's dissatisfaction highlighted the negotiation dynamics and the importance of flexibility in distributive bargaining.

Market and Pricing Dynamics

Jackson faced limited options in the condo market, increasing pressure in his search for a new home.
A suitable condo listed by Sofia at $145,000 was above Jackson's target price but below his maximum willingness to pay.
Jackson's financial constraints on making renovations and other purchases illustrated the impact of pricing on negotiation strategies.

Concessions in Negotiation

Concessions play a critical role in distributive bargaining, influencing how parties reach an agreement.
Jackson's willingness to adjust his price demonstrated an understanding of the buyer's needs and market pressures.

Tactics and Responses

In distributive bargaining, recognizing hardball tactics is essential for effective negotiation.
Countering such tactics requires strategy and flexibility to navigate conflicts and achieve mutually satisfactory outcomes.

Description

This quiz explores the strategies and tactics involved in distributive bargaining. Gain insights into essential elements, the impact of negotiation positions, and the significance of concessions. Additionally, learn to identify and counter hardball tactics effectively.