MOR 569 Final

____________: Best Alternative to a negotiated agreement ____________: Quantification of a negotiator's BATNA ____________: Masquerades of reservation price, salient numbers, figures, or values that appear to be valid but have no basis in fact

- BATNA - Reservation Point - Focal Points

Tactics to negotiate about the rules of the game mentioned in "Getting Past No" by W. Ury (2):

- Bring it up: Let them know you know what they are doing - Negotiate about the Negotiation

Tactics to gather information (6):

- Build trust - Ask diagnostic questions - Provide information - Make packaged offers - Make multiple offers simultaneously - Capitalize on differences (valuation, expectations, risk attitudes, time preferences, capabilities)

Two routes to persuasion:

- Central Route -- Direct, mindful, information-based - Peripheral routes -- Seemingly automatic responses

Advantages of agents from "When Should We Use Agents?" by J.Z. Rubin (3):

- Expertise - Detachment - Tactical Flexibility

Disadvantages of agents from "When Should We Use Agents?" by J.Z. Rubin (3):

- Extra "Moving Parts" - Problems of "ownership" and Conflicting Interest - Encouragement of Artifice and Duplicity

Four Basic Methods to Dealing with Dirty Tricks:

- Identify them - Ignore them - Discuss them - Respond in kind

Tactics to deflect attacks mentioned in "Getting Past No" by W. Ury (5):

- Ignore the attack: If the other side sees that their abusive tactics do not work, they will often stop - Reframe an attack on you as an attack on the problem - Reframe a personal attack as friendly: "Thanks for your concern" - Reframe from past wrongs to future remedies: reframe the blame as joint responsibility for tackling the problem - Reframe from "you" and "me" to "we"

Tactics to Go Around Stone Walls mentioned in "Getting Past No" by W. Ury (3):

- Ignore: Keep talking about the problem as if you didn't hear what they said, or change the subject altogether - Reinterpret: "We would all like to conclude this negotiation by then. That would be ideal. We'd better get to work immediately." Then turn to the problem with great gusto to show your goodwill. - Test it -- Find some credible, but "uncontrollable" event -- Ask Questions -- Turn the other side's stone wall to your advantage

Three common misconceptions about leverage:

- Leverage and power are the same thing -- Leverage is about situational advantage, not objective power - Leverage is a constant that doesn't change -- Leverage is dynamic, not static - Leverage depends on the facts -- Leverage is based on other party's perception of the situation, not the facts -- If the other party thinks you are in a strong position, you are - at least for the moment

Why do dirty tricks work (4)?

- May create a desire to be realistic to avoid future interaction - Create fear/disgust/revulsion - Anchoring - Play on scarcity

"The Mind and Heart of the Negotiator" by L.L. Thompson, excellent preparation encompasses three general abilities:

- Self-assessment - Assessment of the other party - Assessment of the situation

Creating Value: Strategy (5):

- Separate the people from the problem - Focus on interests, not positions - Search for differences (Find Commonality) - Generate multiple possibilities - Share information strategically

Three kinds of tactics in "Getting Past No" by W. Ury:

- Stone Walls (Obstructive) - Attacks (Offensive) - Tricks (Deceptive)

Three primary sources of Creating Value:

- The key role of differences among the participants in creating private (and common) value - The often-misunderstood role of shared interests in creating common value - How economies of scale can create both kinds of value without requiring differences or shared interests

A word of caution when using MESOs (3):

- They can reveal a lot of information about your position and your priorities - An astute opponent may try to cherry pick among your three offers, making a counteroffer that captures the elements he likes best in each - MESOs can add complexity to negotiations

Claiming Value: Strategy (4):

- Use objective criteria - Plan your opening - Think about the other person's alternatives - Manage concessions

When do you use negative leverage (threats)?

When you have low power relative to your counterpart, and you are trying to get someone to negotiate.

Three Types of Leverage:

- Positive: leverage based on the relative abilities of each party to supply things the other wants - Negative: leverage based on the parties' relative power to take away things each currently has - Normative: leverage based on application of the consistency principle discussed

Two kinds of value in Creating Value:

- Private value: profits to be split, land to be parceled out, goods to be allocated, and, generally, results of negotiation that one party can consume, use, or enjoy while excluding others from the benefits - Common value

Tactics to expose tricks mentioned in "Getting Past No" by W. Ury (3):

- Ask clarifying questions - Make a reasonable request - Turn the trick to your advantage

Key factors to Integrative Negotiation (3):

- Move beyond a single issue - Focus on parties' interests (not rights, power, positions) - Gather information about counterpart's priorities

How do you use negative leverage (threats)?

- Needs to be credible - Needs to affect the counterpart's interests

Reasons for avoiding position-based negotiation (4):

- Prone to ego-involvment, which promotes impasse - Less focus on underlying concerns than interests - Inefficient (increases transactional costs) - Endangers ongoing relationship

Seven Principles of Persuasion:

- Reciprocity - Commitment and Consistency: Our wants determine our actions - Social Proof: Legitimacy is gained through the behavior of others - Liking: There are benefits from making positive associations - Authority: We can exhibit mindless obedience to authority - Reactance: Struggles for free choice can create traps - Contrast: Differences are magnified when put together in time or space

Solutions to these tactics mentioned in "Getting Past No" by W. Ury (8):

- Recognize the tactics - Know your hot buttons - Buy time to think - Pause and say nothing - Rewind the tape - Take a timeout - Don't make important decisions on the spot - Don't get mad, don't get even, get what you want

Four important non-price factors:

- Relationship - Social Contract: "Spirit of the deal" - The Process - The interests of the Full Set of Players

Ten sources of power and coalition builders may use to influence potential recruits:

1. Compatible interests 2. Alternatives: The existence of attractive alternatives for the coalition builder 3. Carrots and sticks 4. Information: The ability to control communications among potential allies and adversaries, and to use confidential information to shape their perceptions 5. Framing: The ability to fashion persuasive arguments that evoke specific interest to gain support 6. Deference: Use of people's deference to experts, authority figures, role models and group pressure 7. Obligation: Use of people's obligations for past favors to secure support 8. Commitments: Use of people's desire to appear consistent and to live up to public commitments 9. Relationship network: Use of networks of relationships to build bridges to potential recruits or to identify pressure points in chains of authority 10. Sequencing: Approaching potential allies in some sequence that increases the likelihood of success in recruitment

Five Steps of Breakthrough Negotiation:

1. Go to the balcony 2. Step to their side 3. Reframe 4. Build them a golden bridge 5. Use power to educate

Dirty Tricks (10):

1. Good Cop/Bad Cop 2. Limited Authority 3. Highball/Lowball 4. Bogey 5. Nibble/Inducement Closes 6. Chicken 7. Focal Points: Fake offer 8. Intimidation 9. Legitimacy and Power 10. Boulwarism: "take it or leave it"

5 Innate foundations of intuitive ethics:

1. Harm/care: ability to feel (dislike) pain of others 2. Fairness/reciprocity: evolutionary process of reciprocal altruism 3. In-Group/loyalty: history as tribal creatures 4. Authority/respect: history of hierarchical social interactions 5. Purity/sanctity: psychology of disgust and contamination

Major Traps of Negotiation (4):

1. Leaving money on the table (lose-lose negotiation) 2. Settling for too little (winner's curse) 3. Walking away from the table 4. Settling for terms that are worse than your best alternative (agreement trap)

Six Habits of Merely Effective Negotiators (6):

1. Neglecting the Other Side's Problem 2. Letting Price Bulldoze Other Interest 3. Letting Position Drive Out Interests 4. Searching Too Hard for Common Ground 5. Neglecting BATNAs 6. Failing to Correct for Skewed Vision