1. Agenda: session 4 Distributive Negotiation
Terminology: target, reservation, ZOPA
Strategies for Slicing the Pie
Commonly Asked Questions
Fairness

2. Distributive negotiation
When does it occur?
Can you convert a distributive context to an integrative one? (How?)

3. 3-1A: Positive Bargaining Zone
Seller’s Bargaining Range
Buyer’s Bargaining Range $5
$10
$15
$20
Positive Bargaining Zone
BT, Buyer’s Target Point
SR, Seller’s Reservation Point
BR, Buyer’s Reservation Point
ST, Seller’s Target Point Z O P A

4. 3-1B: Negative Bargaining Zone
Seller’s Bargaining Range
Buyer’s Bargaining Range $5
$10
$15
$20
Negative Bargaining Zone
BT, Buyer’s Target Point
BR, Buyer’s Reservation Point
SR, Seller’s Reservation Point
ST, Seller’s Target Point

5. Pie-Slicing Strategies
Strategy 1: Assess your BATNA and improve it
Strategy 2: Determine your reservation point, but do not reveal it
Strategy 3: Research other party’s BATNA; estimate the reservation point
Strategy 4: Set high aspirations (be realistic, but optimistic)
Strategy 5: Make the first offer (if you are prepared)

6. Pie-Slicing Strategies
Strategy 6: Immediately reanchor if the other party opens first
Strategy 7: Plan your concessions
Pattern
magnitude (GRIT model)
timing
Strategy 8: Support your offers with facts
Strategy 9: Appeal to norms of fairness
Strategy 10: Do not fall for the “even split” ploy

7. The Most Commonly Asked Questions
Should I reveal my reservation point?
Should I lie about my reservation point?
Should I try to manipulate the other party’s reservation point?
Should I make a “final offer” or commit to a position?
How can preserve my dignity and that of others?

8. The Power of Fairness (I)
Fairness in outcomes may be determined by
Equality rule
Equity rule
Needs-based rule
How can we figure out which method other parties may prefer to use?
In addition to fairness of outcomes, another kind of fairness is also considered…

9. The Power of Fairness (II)
What accounts for differences of opinion about assessments of fairness?
Egocentrism taints judgments of fairness
Cognitive mechanisms can result in egocentrism
Selective encoding and memory
Differential retrieval
Informational disparity

10. General Principles to Avoid Problems
Consistency
Simplicity
Effectiveness
Justifiability
Consensus
Generalizability
Satisfaction

11. Yerba Mate Exercise
Next Monday, come to class to locate your negotiating counterpart and check in with me.
I will have further instructions when you complete your negotiation and return to the classroom.