Final Review Flashcards
(164 cards)
People with this fixed-pie perception take one of three mindsets when preparing for a to the negotiaton
- Resign themselves to capitulating to the counterparty
- Prepare for hard bargaining with the counterparty
- Compromise in an attempt to reach a midpoint between opposing demands
It is commonly assumed that ______________ are necessary by one or both parties to reach an agreement.
concessions
The fixed-pie perception is almost always ________ and often leads to an ___________ approach to negotiations.
wrong, ineffective
True or False:
Mixed-motive decision-making is a more accurate model of negotiation that involves both cooperation and competition.
True
Effective preparation for a negotiation econcompasses three general abilities. They are:
- Self-assessment
- Assessment of the counterparty
- Assessment of the situation
Identifying what you want may sound straightforward, but three majors problems often arise. The are:
- Under-aspiring negotiator (the Winner’s Curse)
- Over-aspiring or positional negotiator
- The grass-is-greener negotiator
What is a BATNA?
Best Alternative To a Negotiated Agreement
Four things to remember about your BATNA:
- Wishful, they are factual
- Time sensitive
- Do not let the other party manipulate your BATNA
- Negotiators should be willing to accept any set of terms superior to their BATNA.
Your reservation point is the ___________ of your BATNA.
Quantification, with respect to other alternatives.
How do you quantify your BATNA?
- Brainstorm your alternatives
- Evaluate and order each alternative’s value
- Attempt to improve your BATNA
- Determine your reservation price based on facts.
When determining your reservation point, be aware and knowledgeable of the following:
- Be aware of focal points
- Beware of sunk costs
- Do not confuse your target point with your reservation point
- Identify the issues in the negotiation
- Identify the alternatives for each issue
- Identify multi-issue proposals of equivalent value
Most people are ____-seeking when it comes to losses, and _____risk-averse when it comes to gains.
risk, risk
____________ points define what people consider to be a gain or a loss.
Reference
Negotiators should consider the differential impact of three sources of risk. They are:
- Strategic Risk - refers to the riskiness of the tactics that negotiators use at the bargaining table
- BATNA risk - given BATNAs of equal expected value, the more risk-averse negotiator will be in a weaker bargaining position.
- Contractual risk- refers to the risk associated with the willingness of the other party to honor its terms.
Differences in negotiators’ reference points may lead buyers and sellers to have different __________ for the same object
valuations
What is the sure thing principle?
When faced with uncertainty about an event occurring, people are reluctant to make decisions and will delay decisions until the uncertain event is known.
- Paradox of this situation is that no matter what happens, people choose to do the same thing
- Violations of the sure thing principle are rooted in the reasons people use to make their decisions
- in the presence of uncertainty, people bay be reluctant to think through the implications of each outcome.
The overconfidence effect refers to what?
A negotiator’s unwarranted level of confidence in the judgment of their abilities and the likelihood of positive events.
- This effect also causes people to underestimate the likelihood of negative events.
- When we find ourselves highly confident of a particular outcome, it is important to examine why we fell this way.
What do we need to identify in regards to the other negotiation party?
- Who are the other parties?
- Are the parties monolithic?
- Identify counter-parties’ interests and positions
- Research the counter-parties’ BATNAs
Research the negotiation:
- Is the negotiation one shot, long term, or repetitive?
- Does the negotiation involve _______ resources or _______?
- Is the negotiation one of _______ or opportunity?
- Is the negotiation a transaction or a ________ situation?
- Are _______ effects present?
- Is __________ required?
-scarce, ideologies
- necessity
- dispute
- linkage
- agreement
What is ZOPA?
Zone of Possible Agreements - represent the range between each party’s reservation points. Can be positive or negative.
In a positive bargaining zone, negotiators’ reservation points ________?
overlap
In a negative bargaining zone, there is no _________ overlap between the parties’ reservation points; therefore, parties should pursue other __________ rather than spending fruitless hours trying to reach an agreement.
positive, alternatives
The amount of overlap between negotiating parties’ reservation points is called
bargaining surplus - it is a measure of the value that a negotiated agreement offers to both parties compared to the value of not reaching a settlement.
The negotiators’ surplus is the ____________ difference between the settlement outcome the negotiators’ ___________ point.
positive, reservation