Negotiation Midterm

satisficing

choosing a "good enough" alternative

perspective-taking

see the situation from your counterparty's eyes; facts only (not empathy, which is emotion)

Principle of Contrast

start with something outrageous at your first option, then come back with your second as reasonable and contrast its alternative in succession; break it down to the lowest common denominator (only $0.48/day)

Maximum Plausible Position (MPP)

the intersection of "the most you can ask" and the "other side's belief in the plausibility of your position"

Principle of Unity

the more we feel connected to or associated with someone, the more persuasive they become (contagious cooperation) (i.e., shared identities like Vandy sweatshirt in Paris)

Principle of Reciprocity

the social principle that giving a gift creates social ties with the person receiving it, who is obliged to eventually reciprocate

distributive negotiation (win-lose)

"Dividing the Pie"/ "Win-Lose". A distributive negotiation usually involves a single issue. One person gains at the expense of another. Establish starting positions & make gradual concessions

integrative negotiation (win-win)

- "maximizing the pie" - "win-win" negotiation - avoid: fixed "pie" assumption

counteroffers

- always plan your opening value - help diffuse original offer's prominence as anchor - use their first offer to gain info: "so tell me more about that first offer. why did you start there?" - aggressive: "you've got to do better than that!" [silence]

Labeling

- defuses the negative when counterparty recognizes reinforcement of the emotion they're feeling - label + mirroring --> defuse emotion + learn about the counterparty's interests

First offer

- start with the MPP and rationale to be credible (give specific numbers) - early in discussion

Principle of Involvement

- the more one is engaged in a situation, the more they feel "invested" in an agreeable solution -tell stories, build suspense with something unresolved - hand them something; they will form an unconscious attachment to it

concessions

- use principal of reciprocity - prepare "sacrificial lambs" - prioritize a sequence of concessions

BATNA

1. list alternatives if current negotiation ends in an impasse 2. evaluate alternatives 3. select your BATNA 4. calculate your RP

Principle of Commitment & Consistency

People feel compelled to act in a way that is consistent with their previous behaviors and statements: - living up to a reputation - get the other person to write down a decision, - pipeline into the goal: build a bunch of little yes's before the BIG yes

integrative mindset

a commitment to win/win through compromise, cooperation, and increasing overall value

optimizing

achieving the best possible balance among several goals

positive bargaining zone

buyer RP - seller RP

make simultaneous multiple offers of = value

can be a more powerful anchor, can better signal your priorities

Principle of Scarcity

manufactured demand; competition generated by scarcity amplifies attraction to things (i.e., DDMB Kandi)

package deals and contingent contracts

multidimensional deals + recognize differences in perceptions, expectations, risk

Principle of Authority

we have been trained from birth to respect authority and obedience (i.e., "Believe me, I know how this is likely to play out. I've negotiated with more than 30 distributors just like you.")

Principle of Liking

we like those who like us (i.e., LinkedIn connection check --> told me to tell u 'hi')

Principle of Social Proof

we look to others for what is appropriate behavior (i.e., "our most popular entree' on restaurant menus", Netflix "Top 10")

Principle of Expecation/Suggestion

we tend to make decisions based on how others expect us to perform (Luke to Darth Vader, "I know there is still good in you"); "you're gonna love how this car handles", "i always appreciate how Southerners are always fair"