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• Negotiation involves tangibles like prices and terms, and intangibles, which are psychological motivations that influence parties.
• Negotiations can be characterized by independence (ability to meet needs alone), dependence (reliance on others), or interdependence (interlocking goals).
• The aftermath of negotiation can be disruptive (zero-sum, one party gains at the expense of others) or interactive (not zero-sum).
• Best Alternative to a Negotiated Agreement (BATNA) is the outside option if you walk away and never return.
• Concessions are what you give up relative to your most preferred outcome for an agreement.
• Honesty is cheap but requires implementing a GRIM TRIGGER STRATEGY, cooperate as long as the other party does, and impose credible punishment if they stop. Rich countries often have high trust.
• Dishonesty can be expensive, requiring more memory and bandwidth.
• Disruptive bargaining opportunities arise in anonymous situations and can be well-defined in situations like buying/selling a single object, real estate, or a car.
• A disruptive bargaining agreement would involve the price or transfer of property.
• Problems arise in disruptive bargaining due to threat points, target points, and costs of walking away.
• Conflict is a sharp disagreement or opposition of interest.
• Discussing conflict increases awareness and ability to cope with problems, creating incentives to solve underlying issues.
• Conflict can promise change and adaptation by challenging procedures and practices, drawing attention to issues that cause frustration.
• Conflict strengthens relationships and morale, since it allows employees to release tensions through discussion.
• Conflict enhances personal development, because managers learn how their style impacts subordinates, while workers identify skill upgrades.
• Conflict can be stimulating and fun, offering a welcome break from an easygoing pace, this encourages employees to appreciate their relationships.
• Game theory solves a game once you can describe the equilibria and the expected outcome from players.
• Nash equilibrium is a set of strategies where no player has an incentive to change given the other's strategy.
• Defect is a dominant strategy for each player.
• A target point- each negotiators most preferred agreement
• A resistance point- each negotiators least preffered agreement
• Bargaining zone is the interval between resistance points of each person.
• ZERO SUM=disruptive bargaining
• TACTICS for disruptive situations include assessing the other party's targets, resistance, and cost of walking away.
• Other tactics include managing the other parties impressions, modifying the other party's perceptions and manipulating costs of delay or termination.
• Positions involve opening offers.
• Initial offers have a big impact on decisions, especially under uncertainty.
• Opening stance signals willingness to compromise or fight, and concession patterns affect expectations.
• Final offers matter for communication.
• Opening Stance signals willingness to compromise or fight.
• People adapt their beliefs (Bayesian) with new information.
• Relative bargaining power is the influence or control one party has in a negotiation, often leading to better deals with resources, options, or leverage.
• Nash Bargaining suggests the best outcome maximizes the product of gains for both parties.
• The Pareto Principle (80/20 rule) : states that roughly 80% of the effects come from 20% of the causes.
• Pareto efficient points occur where no agreement would improve any party's outcome without decreasing others' outcomes.
• Nash bargaining's limitations include abstracting problems into closed, compact spaces.
• Other limitations include silence on how solutions are derived and the high requirements for player intelligence/rationality.

Deal Closing

• In Closing a deal- providing alternatives (menu), assuming the close (paperwork) or splitting the difference may be useful.

Hardball Tactics

• Hardball tactics include good cop/bad cop team play and lowball/hardball exaggeration, which can make the other party adjust.
• Other tactics include bogey misdirection (pretending an issue is important when it is not), asking for a sweetener (nibble), intimidation, and overwhelming the other party with excessive information (snow job).

Responding to Hardball

• Responding to hardball tactics includes ignoring them, discussing them openly (name and shame), responding in kind, or co-opting the other party.
• Selective Negotiation: Choosing which battles to fight, focusing on major issues to maximize gains or maintain relationships.
• The Anchoring Effect is a cognitive bias where the first offer sets a mental benchmark.

Bargaining Zones

• Positive Bargaining Zone: Overlap between the minimum a seller accepts and the maximum a buyer pays.
• Negative Bargaining Zone: No overlap, meaning no deal is possible.
• Precision Price: Using specific numbers to make an offer appear calculated, credible, and justified, signaling research.
• Indirect assessment involves gathering information indirectly instead of directly asking questions.

Integrative Negotiation

• Mutual Beneficial trade- Almost always gains from trade- or no need to negotiate because trade in voluntary and there is always more surplus create than both parties realize.

• Cutting costs for compliance reducing expenses associated with meeting the terms, agreed upon during a negotiation.

• Integrative negotiation involves free information flow, understanding needs, stressing common ground, minimizing differences, and creative solutions.

• Factors determining the use of integrative negotiations include:

  • Multiple issues.
  • Adding more issues.
  • Parties varying preferences. -Likely renegotiation

• Value claiming in integrative negotiation involves negotiators carving out their share of resources, also known as distributive negotiation.

• Value Claiming is disruptive negotiating, aiming for the most value possible, often seen as a "win-lose" approach.

• Value Creatingis integrative negotiations, expanding the pie, and using a "win-win".

• The Negotiator's dilemma- tension between competitive and cooperative behaviors.

• What creates value should precede claiming value. Teamwork is more efficient when focused on collab that who should get what

• Claiming requires disruptive processes that need to be introduced carefully into integrative bargaining otherwise they harm the relationship and derail process

• Interest: underlying concerns, needs, desires or fears that motivate a negotiator to take a particular position

• Positions include substantive, process, relationship, and principle interests

• Observations on INTEREST - is almost always more than one issue of importance, interests change and to surface interest, ask questions

• Generate alternative scenarios by expanding the pie and logrolling or trading interests, non specific compensation and cutting the cost for compliance.

Generating Solutions

• Find a bridge solution (innovation) that satisfies both parties.
• Reduce the set of alternatives, assess quality, standards, and acceptability.
• Agree on criteria in advance, justify personal preferences and consider influencing intangibles.
• Use a subgroup/committee, take time out/cool off and exploit different ways to logroll.
• Strategies involve common goals, cooperation, motivation, and clear communications.
• Ultimatum game: : If an offer is rejected, both players get nothing.
• War of attrition: players compete by outlasting each other to win a prize.

Planning

• Define negotiating goals and list major issues related to achieving them.
• Importance of each issue and define the bargaining mix.
• Define interests and alternatives.
• Set targets and openings and define limits.
• Assess the social context of the negotiation.
• Outline how issues will be presented.
• Define issues through analysis, experience consultations and research.
• Clearly define interests in terms of substance, process, relationships, and principles.

Econographics

• Understand the fundamental difference in people in terms of fairness, patience and risk preferences.
• Alternatives (outside options)
• Target point: where we want to end up
• Specify criteria/reason for packaging and objectives.
• Ask best we could hope for price.
• Assess constituency and social context of negotiation.
• Who is on my team?
• Who is on other team?
• Analyze the other party, resources, issues and objectives and authority to make a deal.
• How to plan issue presentation and defense.
• Need to know facts, support, comparisons and sequencing of communication.
• Protocol- how to debrief.
• Moving from plan to action- overall plan to accomplish goals is in the negotiation.
• Tactics are short term moves designed to enact or pursue broad strategy, whic creates stability, continuity and direction for tactical behaviour
• The Dual Concerns Model helps prioritize settlements by focusing on concern for self and others.
• This model helps to prioritize dimensions of desired settlements
• AVOIDANCE: non-engagement
• Engagement: competition, collaboration or accommodation

Ethical Strategies

• Bargaining mix creates terms and conditions and includes linking issues.
• Ethical reasoning can include considering consequences (end result ethics) and universal principles and obligations (duty ethics).
• Other factors include community customs and norms (social contract ethics) and one's conscience (personalistic ethics).
• High trust begets high trust.
• Machiavelliasnism is that a person is cynical abou others, so they are distrustful and focused on control.
• "BIG 5" personality factors-
  • Extroversion
  • Agreeableness
  • Conscientiousness
  • Emotional stability
  • Openness.
• Cognitive ability is general mental capability that involves ability to reason, plan, solve problems and think abstractly.
• Agreements are typically the beginning of a relationship so actions that take place post agreement matter the most. ACTIONS AFTER THE AGREEMENT DETERMINE PAYOFFS.
• No agreement is ever final until payoffs are realized