Negotiation

1
Negotiation

• Resolving conflict

2
Negotiation and Bargaining

• When 2 or more parties seek to agree on the
  conditions of an exchange of goods or services.
• Bargaining can be distributive (zero-sum games)
• Bargaining can be integrative (non zero-sum games)

3
Ranges

• Each party has a bargaining range, with a target
  point at the top, and a resistance point at the
  bottom.
• Negotiations are most easily met when an overlap
  in ranges can be found.

4
Biases that effect negotiation (and how to
benefit from them)

• Escalation of commitment. We view resources lost
  as something to be recouped. We shouldnt think
  about them when we change course.
• Illusion of the fixed pie- very few situations
  are zero sum.
• Anchoring and adjustment. Once a fixed point has
  been presented, we move from it. This need not be
  relevant.

5
Framing

• When we face a loss, we tend to take more risks
  than when we face a potential gain (Kahneman and
  Tversky, 1978).
• The same situation can be presented both ways, to
  gain satisfaction or to make people dissatisfied.

6
More Biases

• Winners cursefeeling like you offered too much
  after the deal is closed (the priceline.com
  phenomenon).
• Put yourself in the position of the other side
  and gain as much information as possible when
  entering a negotiation.
• Overconfidence-people may have the tendency to
  avoid compromise.

7
Other factors that effect negotiation

• Personalitysurprisingly, no effects on outcomes
• Genderwomen are more pleasant and compromising
  in negotiation than men. Men view a zero sum
  game, women do not.
• CultureFrench love conflict, we love to be
  liked, Asian cultures use negotiation to build
  relationships. Differences in how cultures use
  pauses and say no (Brazilians 83 times in ½
  hour).

8
Use of emotion in negotiation

• Positive emotion (happiness, cheerfulness, etc.)
  is helpful in early stages (opening behavior)
• Research has shown that displays of anger,
  solemness, or sadness before the closing of
  negotiations will force the other party closer to
  their resistance point.
• Angry people are also seen as powerful.

9
Lying in negotiation

• Most people withhold information (some studies
  report 100). Most often, this is about resource
  availability (people present their target as
  their resistance point).
• About 30 of people will lie about common
  interests (for example, what state they are
  from)
• Because most negotiations deal with long-term
  relationships, both parties should walk away
  happy.

10
How to be a good negotiator

• DONT take things personallymay lead to
  overconfidence, etc. Gather info and put yourself
  in the other partys shoes.
• Use reciprocal concessionsgive away something
  small at the start.
• Ignore initial offers-anchoring and adjusting.
• Emphasize win-win situations.
• Create trust and opennessespecially for the long
  term. Find real similarities.