MGRL-3105 Chapter Notes - Chapter 3: Zopa, Best Alternative To A Negotiated Agreement, Reservation Price
4 Feb 2020
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Negotiators who can improve their alternatives have a value-claiming advantage at the table, negotiation dance--the entire process of making an opening offer and then reaching a mutually agreeable settlement. If negative, parties should exercise their batna (it is worse to make an agreement with one another) Bargaining surplus: bargaining surplus--the amount of overlap between parties" reservation points (a measure of the size of the bargaining zone) Some conditions allow negotiators to be more confident about the counterparty"s reservation point: reservation points are unverifiable (while batnas are verifiable, as they are based on objective factors) Accurately assess your batna: nothing can help a negotiator get a bigger slice of the pie than having a great batna. Unpack alternatives: negotiators who have multiple alternatives often have a distorted view of the zopa, caution: in the event that negotiators unpack extremely negative outcomes, they develop lower aspirations and ultimately claim less value.
