1. Distributive Negotiation
Single issue
My gain is your loss

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

3. BATNA Develop alternatives
Gives you POWER (even if you are smaller, have fewer resources)
If we cannot receive an offer of X-amount for the house, then what will you do?
Rent it out?
Best Alternative to a Negotiated Agreement
Determines your reservation price: The lowest acceptable value for a negotiated agreement

4. Offers Folklore says to let the other party make the first offer
Is that a good idea?

5. Anchoring People are heavily influenced by the first offer
Research indicates the first offer correlates .85 with the final price

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

7. Concession Strategy
Need some cushion (Target price versus reservation price)
Make the first concession
Why?
Norm of reciprocity
Positive feelings

8. Concession Strategy Signaling function of concessions
Magnitude (smaller and smaller)
Take more time in between concessions

9. 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”

10. Reaching Agreement
If you reach an agreement you like, do you still care about how the other party negotiated?