Presentation is loading. Please wait.

Presentation is loading. Please wait.

Psych 253 Judgments and Decisions Negotiations Barbara Mellers Negotiations and Conflict Resolution.

Similar presentations


Presentation on theme: "Psych 253 Judgments and Decisions Negotiations Barbara Mellers Negotiations and Conflict Resolution."— Presentation transcript:

1 Psych 253 Judgments and Decisions Negotiations Barbara Mellers Negotiations and Conflict Resolution

2 An independent service station in the Port of Los Angeles is for sale by owners (married couple) An independent service station in the Port of Los Angeles is for sale by owners (married couple) Texoil, a large petroleum refining company, is a potential buyer (Texoil representative) Texoil, a large petroleum refining company, is a potential buyer (Texoil representative) Parties have 5 minutes to prepare and 30 minutes to negotiate and discuss Texoils possible purchase of the service station Parties have 5 minutes to prepare and 30 minutes to negotiate and discuss Texoils possible purchase of the service station When you prepare, think about your BATNA, your reservation price, and your underlying INTERESTS! When you prepare, think about your BATNA, your reservation price, and your underlying INTERESTS! Texoil

3 Texoil Rep. Station Owner BATNA Reservation Price Interests Each Sides Information

4 Texoil Rep. Station Owner BATNA Reservation Price Interests $675,000 (Build one) $400,000 (BP offer) Each Sides Information

5 Texoil Rep. Station Owner BATNA Reservation Price Interests $675,000 (Build one) $400,000 (BP offer) $500,000 Why not $675K? Minimart = $100K Upgrades = $?? $553,000 ($488,000 after taxes) Boat loan: $230,000 Boat ready: $68,000 Food, health, clothing: $75,000 Boat repairs: $40,000 Savings after return: $75,000 Each Sides Information

6 Texoil Rep. Station Owner BATNA Reservation Price Interests $675,000 (Build one) $400,000 (BP offer) $500,000 Why not $675K? Minimart = $100K Upgrades = $?? $553,000 ($488,000 after taxes) Boat loan: $230,000 Boat ready: $68,000 Food, health, clothing: $75,000 Boat repairs: $40,000 Savings after return: $75,000 Good price Good managers Station Ownership Time off (2 years) Spouses health Sail around the world Savings / future income Health insurance, food, etc. Each Sides Information

7 Who reached an agreement? Who reached an agreement? What kind of information did you share? What kind of information did you share? What was the key to an agreement? What was the key to an agreement?

8 Initial Texoil Situation Station Owners Reservation Price ($553,000) Texoil Reps Reservation Price ($500,000) BATNA For Texoil Rep Sale Price (in thousands) 400 BATNA For Station Owner (or, stay put) 700

9 Station Owners Reservation Price ($467,000) Texoil Reps Reservation Price ($500,000) Revised Texoil Situation: If Texoil Representative includes Job Offer Upon Return Sale Price (in thousands)

10 Multiple issues Multiple issues Differing preferences, expectations, risk attitudes Differing preferences, expectations, risk attitudes Differing interests Differing interests Future relationship Future relationship Multiple alternatives Multiple alternatives Characteristics of Integrative Bargaining

11 Distributive Integrative Bargaining Bargaining One issueMany issues Win-LoseWin-Win OutcomeProcess and outcome Max share of pieMax size and share of pie One time Repeated times One positionMany options Keep interests hiddenShare interests Keep information hiddenShare information CompetitiveCooperative/Competitive Position-basedInterest-based

12 Analyze own & others interests Analyze own & others priorities Prepare multi-issue proposals Think creatively about shared interests Distributive Integrative Bargaining Bargaining Define your BATNA Define your reservation price Define your target level Prepare objective rationales TACTICS

13 Cooperate Build trust Make package deals Make multiple offers simultaneously Ask for and share info about interests & priorities Open high Anchor with first offer Discuss single issue Make bi-lateral, not unilateral concessions Persuade through objective rationale

14 Negotiators may have: Escalated commitment to positions Tried to win over all else Believed that the pie was fixed (other partys interests are opposite yours) Had positive illusions and unrealistic aspirations Had negative views of opponent Why did impasses occur?

15 Separate people from problem Separate people from problem Should you be a hard or soft negotiator? Should you be a hard or soft negotiator? Focus on interests, not positions Focus on interests, not positions Generate multiple possibilities Generate multiple possibilities Base results on objective standards Base results on objective standards Integrative Negotiation

16 Improve outcomes Improve outcomes Create more stable agreements Create more stable agreements Improve implementation Improve implementation Strengthen the relationship Strengthen the relationship Advantages of Integrative Agreements

17 The non-separability of integrative and distributive negotiations The non-separability of integrative and distributive negotiations Value that has been created must be claimed Value that has been created must be claimed Tactics that claim value can impede its creation Tactics that claim value can impede its creation Persuading, withholding information Persuading, withholding information Approaches to creating value are vulnerable to claiming tactics Approaches to creating value are vulnerable to claiming tactics Disclosing interests, priorities Disclosing interests, priorities But..

18 The Prisoners Dilemma Your Partner Not confessConfess 2 yrs 0 yrs Not confess You 2 yrs 10 yrs 5 yrs Confess 0 yrs 5 yrs

19 The Negotiator's Dilemma Your Counterpart CreateClaim Good Great Create You Good Terrible Mediocre Claim Great Mediocre

20 Prepare for integrative and distributive opportunities Prepare for integrative and distributive opportunities Analyze own & others interests; avoid fixed-pie perception Analyze own & others interests; avoid fixed-pie perception Know your BATNA, Res Price, objective arguments Know your BATNA, Res Price, objective arguments Balance cooperation and competition Balance cooperation and competition Build trust: dont jump in trusting immediately, but be open to a trusting interaction Build trust: dont jump in trusting immediately, but be open to a trusting interaction Ask for and share info about interests & priorities, but watch out for unilateral information exchange Ask for and share info about interests & priorities, but watch out for unilateral information exchange Resolving the Dilemma


Download ppt "Psych 253 Judgments and Decisions Negotiations Barbara Mellers Negotiations and Conflict Resolution."

Similar presentations


Ads by Google