NEGOTIATION PREPARATION

1
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

2
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

3
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

4
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

5
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

6
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

7
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

8
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 Others Cognition's
• Failure to consider other partys perceptions.

9
COGNITIVE BIASES

• Reactive Devaluation
• Devaluing other partys concessions
• Reduces willingness to respond.

10
FAIRNESS

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

11
FAIRNESS

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

12
FAIRNESS

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