Agenda: session 4 Distributive Negotiation Terminology: target, reservation, ZOPA Strategies for Slicing the Pie Commonly Asked Questions Fairness

Distributive negotiation When does it occur? Can you convert a distributive context to an integrative one? (How?)

3-1A: Positive Bargaining Zone Seller’s Bargaining Range Buyer’s Bargaining Range $5 $10 $15 $20 Positive Bargaining Zone BT, Buyer’s Target Point SR, Seller’s Reservation Point BR, Buyer’s Reservation Point ST, Seller’s Target Point Z O P A

3-1B: Negative Bargaining Zone Seller’s Bargaining Range Buyer’s Bargaining Range $5 $10 $15 $20 Negative Bargaining Zone BT, Buyer’s Target Point BR, Buyer’s Reservation Point SR, Seller’s Reservation Point ST, Seller’s Target Point

Pie-Slicing Strategies Strategy 1: Assess your BATNA and improve it Strategy 2: Determine your reservation point, but do not reveal it Strategy 3: Research other party’s BATNA; estimate the reservation point Strategy 4: Set high aspirations (be realistic, but optimistic) Strategy 5: Make the first offer (if you are prepared)

Pie-Slicing Strategies Strategy 6: Immediately reanchor if the other party opens first Strategy 7: Plan your concessions Pattern magnitude (GRIT model) timing Strategy 8: Support your offers with facts Strategy 9: Appeal to norms of fairness Strategy 10: Do not fall for the “even split” ploy

The Most Commonly Asked Questions Should I reveal my reservation point? Should I lie about my reservation point? Should I try to manipulate the other party’s reservation point? Should I make a “final offer” or commit to a position? How can preserve my dignity and that of others?

The Power of Fairness (I) Fairness in outcomes may be determined by Equality rule Equity rule Needs-based rule How can we figure out which method other parties may prefer to use? In addition to fairness of outcomes, another kind of fairness is also considered…

The Power of Fairness (II) What accounts for differences of opinion about assessments of fairness? Egocentrism taints judgments of fairness Cognitive mechanisms can result in egocentrism Selective encoding and memory Differential retrieval Informational disparity

General Principles to Avoid Problems Consistency Simplicity Effectiveness Justifiability Consensus Generalizability Satisfaction

Yerba Mate Exercise Next Monday, come to class to locate your negotiating counterpart and check in with me. I will have further instructions when you complete your negotiation and return to the classroom.