Week 3

Question 1

Integrative Bargaining

Answer 1

creating value, maximise joint value creation
“create value in order to appropriate value”

Question 2

Distributive Bargaining

Answer 2

claiming the maximum value

Question 3

Two Types of bargaining issues

Answer 3

1. controversial: win/lose
2. non-controversial: win/win

Question 4

How to exploit integrative dimensions/ How to create value

Answer 4

1. exploit tradeoffs
2. propose multiple mini packages (make up for lack of information)
3. Efficiency Ratio (Benefit to other/Cost to us) -> use selectively “Pay with cheap money”
4. use Pareto efficiency (best option for both) and competitive effects
5. incentive compatibility
6. recognise difference in perceived cost/benefits
   -> use success fees and warranties to deal with differences

Question 5

Pitfalls of a negotiation

Answer 5

1. single issue logic -> enlarge agenda
2. argumentation -> ask more questions
3. loss of credibility -> build trust (no lie/extreme offers)
4. misbehaving -> avoid irritators (Soft on people, tough on issues, quit confidence)
5. bad management process

Question 6

Telling the truth in negotiation

Answer 6

Principled negotiation
problem: leaves money on table (could have asked for something in return

Question 7

Lying in negotiation

Answer 7

• risk of loosing credibility
• risk of loosing liberte d’action (psychological disadvantage of having to be careful)
• risk of turning tables and ending up with worse outcome

Question 8

Strategic misrepresentation in negotiation

Answer 8

• reply with broad, vague questions
• use non-informative statements (but give no indication of the option you favor)
• using statements with if message (w/o using “if”)
  -> could become personal dilemma (ommitting info) but you don’t tie your hands
  1. misrepresentative message
  2. come clean

Question 9

Answering with a question in negotiation

Answer 9

+ avoid yes/no
+ suggest compensation is needed
+ leave door open to enlarge agenda
+ conveys interest/sympathy
+ does not reveal info
-> what is your proposal

Question 10

Characteristics of a successful negotiator

Answer 10

1. ability to extract information (related to building trust via credible image)
2. quiet confidence
3. firm in what he has to say
4. separation of people and problems
5. positive an friendly
   6.building bridges by enlarging the agenda
6. understanding priorities of both sides

Question 11

What to do to avoid escalation in long-term negotiations

Answer 11

1. integrative bargaining instead of distributive
2. no ZOPA, enlarge agenda
3. add non-controversial issues (win/win)