1. Distributive Negotiation
Single issue
Your loss is my gain

2. Slicing the Pie How do you get the biggest piece? Preparation Offers
Alternatives
Concessions

3. Offers Folklore says to let the other party make the first offer
Is that a good idea?
Anchoring
People tend to focus heavily on the first offer
First offer correlates .85 with the final price

4. Offers (continued) What if the other party makes the first offer?
Immediate counteroffer
Take away the psychic hold of the 1st offer

5. First Offers (continued)
How do you feel when the other party accepts your first offer?
I should have asked for more
Maybe I just got into a bad deal
Less satisfaction
Do not accept first offers
They are just that – an opener
Expectation to negotiate

6. BATNA Best Alternative to a Negotiated Agreement
The lowest acceptable value to an individual for a negotiated agreement
Develop alternatives so you know at what point to stop negotiating
Gives you the POWER to walk away
If we cannot receive an offer of X-amount for the house, then what will you do?
Rent it out?

7. What’s your bottom line?
“Tell me the bare minimum you would accept and I’ll try and throw in something extra”
“Why don’t you tell me the very maximum you are willing to pay, and I’ll try and I’ll see if I can shave off a bit”

8. Concessions Need some cushion (Target price versus reservation price)
Make the first concession
Why?
Norm of reciprocity
Positive feelings
Magnitude of concessions
Less and less to signal you are reaching the end