2What Is Negotiation?Leigh Thompson: “An interpersonal decision-making process necessary whenever we cannot achieve our objectives single-handedly”Ex. Buying a car; buying a house; things at workMost people are not great negotiators b/c of:Faulty feedbackConfirmation biasEgo-centrismSatisficing—settling for lessSelf-Reinforcing Incompetence
3Myths of Negotiation 1. Negotiations are fixed-sum. 2. You need to be either tough or soft.3. Good negotiators are born.4. Experience is a great teacher.5. Good negotiators take risks.6. Good negotiators rely on intuition.
4Preparation Is the Key Situation & parties Issues & bargaining mix InterestsGoalsBids & tacticsLimits & alternatives
5BATNA Best Alternative to a Negotiated Agreement (Fisher & Ury, 1981) Good for:Knowing when to walk awayTesting proposalsAccepting things that are superior to your BATNA and rejecting things that are inferior to your BATNA
6BATNARealistic, not idealisticNot staticStick to it
7Example: Car Buying How do you strengthen your BATNA? What makes a dealer’s BATNA stronger?
16So What? BATNA & Reservation Point Target Point Bargaining Range Judge agreementsImprove agreementsNo raw dealsTarget PointSomething to shoot forBargaining RangeDetermines flexibility in strategy & concessionsBargaining ZoneKnow if agreement is possible
17Anchor Point Reference point Can be arbitrary Adjusted as appropriateCan be arbitrarySet your anchor first!…sometimes(Make the 1st offer w/ a goodanchor)
18No preparation = no success. The big ideaPreparation is the key.No preparation = no success.