Factors affecting Negotiations Type of Relationship between parties Type of Emotions Negotiation Perceptions of Parties Ability to Invent Options Best Alternative to Negotiated Agreement BATNA Bargaining Style
How the three factors affect negotiation Type of Relationship between parties Friends are more conceding, less competitive, often resulting in less optimal mutually beneficial outcomes Type of Emotions Happy people are more cooperative and identify mutually beneficial outcomes Perceptions of Parties People have perceive negotiations as “fixed pies” and are biased in their perceptions of offers proposed by opponents
What is Inventing Multiple Options Aka expanding the pie Examples of negotiation with multiple Options Car Sale Negotiation Salary Negotiation Union-Management Negotiation Using multiple options leads to win-win solutions
Factors affecting Ability to Invent Options Fixed Pie Perceptions Search for a single answer Ability to Invent Options Negotiation Outcome Time Pressure Expectations about other party
What affects the ability to invent options? Time pressure Leads to commitment to a course of action or not reacting to new information resulting in poor outcomes Search for a single answer Having multiple equivalent answers results in better outcomes Expectations of other party Fixed pie perceptions