1. Distributive Bargaining: NEGOTIATION AS STRUCTURED PROCESS Rachel Song (152SIS47)

2. Agenda  A Primer on Competitive Bargaining (Gary Goodpaster)  First Offers in Negotiation: Determinants and Effects (John Oesch & Adam Galinsky)  Aspirations and Settlement (Russel Korobkin)

3. A Primer on Competitive Bargaining  1. Information game  2. High or low openers  3. Concessions: information  4. Concessions: hang tough  5. Concessions: small, infrequent, & declining  6. Mid-point rule  7. Justifications / Rationales Gary Goodpaster

4. Good, competitive negotiators (Goodpaster cont.) PersuadeDevelopAnticipateProvide

5. Downsides of Competitive Negotiation secure no gains at all Risky Bargaining change of mind; hard feelings Unsustainable agreement "leave gains on the table" Inefficient & Unproductive (Goodpaster cont.)

6. First Offers in Negotiation: Determinants and Effects John Oesch & Adam Galinsky Cartoon. Digital image. Under30CEO. Web. 26 Mar. 2016..

7. Who should make the first offer? How extreme should it be?

8. Purposes of First Offers The Recipient First substantive information The Hesitant Start the dance The Presenter Strategy to obtain information (Oesch & Galinsky cont.)

9. “Factors Affecting Who Will Present the First Offer” (Oesch & Galinsky cont.) 1.Power 2. Stereotype Activation 3. Past Experience 4. (Information) 5. (Expertise) CONFIDENCE

10. “Factors Affecting Extremity of a First Offer” RiskIncrease transaction costsFocus on target pricesStereotype activation & reactanceMarket information & framing (Oesch & Galinsky cont.)

11. Aspirations and Settlement Russell Korobkin Ambition Achievement Hope Goal

12. Aspirations and Settlement  Aspiration: “Ideal target settlement sum, or set of terms…” (Lowry and Wiggins, 87).  Target goals above reservation price  superior outcomes  Role of aspirations in bargaining situations (Korobkin cont.)

13. Aspirations and Settlement  Goals motivate action:  “…individuals usually perform better when they have a specific, difficult goal than when they are told to ‘do their best,’” (Lowry and Wiggins, 89).  Attention, effort, persistence (Korobkin cont.)

14. Benefits, Risks, Reduced Satisfaction Should negotiators set high aspirations? (Korobkin cont.)

15. Risks & Reduced Satisfaction Increased Risk of Impasse  Deadlock  Not always undesirable outcome  Improved chance Reduced Satisfaction with Outcomes  Less utility  Higher aspiration: less likely achieve  Goal setting

16. Conclusion “…we dance to the rhythms of competitive bargaining,” (Lowry and Wiggins, 56).

17. Works Cited Wiggins, Charles B., and L. Randolph Lowry. "Chapter 3: Distributive Bargaining--Competitive Moves to Claim Value." Negotiation and Settlement Advocacy: A Book of Readings. St. Paul, MN: West Pub., 1997. Print. Cartoon. Digital image. Under30CEO. Web. 26 Mar. 2016..