NEGOTIATION/ PREPARATION Aiming for a Negotiated Agreement: Aspiration (Target) Point –Most preferred or ideal settlement Reservation Point (Bottom Line) –Least favorable settlement. --Can settle or walk away to BATNA: Best Alternative To a Negotiated Agreement

PREPARATION BARGAINING ZONE ( Settlement zone) –Region between the parties reservation points Positive bargaining zone (Reservation points overlap) –Settlement possible Negative bargaining zone (Reservation points do not overlap) –Settlement not possible

PERCEPTUAL DISTORTION A. Stereotyping –Assigning attributes based on membership in a particular group B. Halo effects –Generalize on a number of attributes based on knowledge of one attribute. C. Selective perception –Accepting information that supports prior belief and filtering out nonconforming information

PERCEPTUAL DISTORTION D. Projection –Ascribing to others the characteristics you have –Assuming that the other party will respond in the same manner you would respond. E. Framing –Subjective evaluation mechanisms to determine whether to pursue or avoid future actions

Relationships A. The norm of reciprocity –Duties owned to one another because of prior actions. –Reciprocity traps B. The similarity principle –We assume others like us act like us

COGNITIVE BIASES A. Irrational Commitment –Irrational commitment to positions B. Fixed-Pie Beliefs –Assumption that all negotiations are zero sum C. Anchoring and Adjustment –Avoid false or inappropriate anchors

COGNITIVE BIASES D. Information availability bias –Giving greater weight to easily available information and established search patterns. E. Winners Curse –Settling too quickly F. Overconfidence –Overestimate chance of success –Discount others advice and information

COGNITIVE BIASES G. Law of Small Numbers –Tendency to draw conclusions from small sample sizes. H. Self-serving biases –Fundamental attribution error /False -consensus Ignoring Other’s Cognition's –Failure to consider other party’s perceptions.

COGNITIVE BIASES Reactive Devaluation –Devaluing other party’s concessions Reduces willingness to respond.

FAIRNESS Principle 1 –Multiple Methods of Fair Division Principle 2 –Fairness is Context Driven Principle 3 –Fairness is Often Based on Comparisons

FAIRNESS Principle 4 –People seek equity Principle 5 –People will attempt to restore equity from inequity. Principle 6 –People need to maintain egos

FAIRNESS Principle 7 –People care about process Principle 8 –Judgements are affected by relationship Principle 9 –Egocentrism taints judgement