BU288 Lecture Notes - Lecture 4: Risk Assessment, Best Alternative To A Negotiated Agreement, Reservation Price
Document Summary
Distributive- determine how the pie would be divided. Integrative- potential to expand the size of the pie available. Unrealistic expectations- an anchor that is much higher than what one party is willing to pay. Escalation of commitment- may consider or propose new offers based on other negotiators introducing new influences. Two key ways to help resist escalation of commitment. Reservation price- the price at which you will walk away. Quick deal- if the other party is poorly informed or inexperience this can be to your advantage. Let other party make first offer- may be pleasantly surprised, but the other party may be able to set an anchor. First offer should be ambitious but discussable (reasonable enough that the other party will not break negotiations). Anchors- base figures from which negotiators add or subtract when making judgements. In secrecy- acting on incomplete information, you miss the opportunity to increase the pie. For each question answered, ask one and allow reciprocation.
