NEGOTIATION/PREPARATION

Aiming for a Negotiated Agreement:• Aspiration (Target) Point

– Most preferred or ideal settlement

• Reservation Point (Bottom Line) – Least favorable settlement. --Can settle or walk

away toBATNA: Best Alternative To a Negotiated Agreement

PREPARATION

• BARGAINING ZONE ( Settlement zone)– Region between the parties reservation points

Positive bargaining zone (Reservation points overlap)

– Settlement possible

• Negative bargaining zone (Reservation points do not overlap)– Settlement not possible

PERCEPTUAL DISTORTION• A. Stereotyping

– Assigning attributes based on membership in a particular group

• B. Halo effects– Generalize on a number of attributes based on

knowledge of one attribute.

• C. Selective perception– Accepting information that supports prior belief

and filtering out nonconforming information

PERCEPTUAL DISTORTION

• D. Projection– Ascribing to others the characteristics you have– Assuming that the other party will respond in

the same manner you would respond.

• E. Framing– Subjective evaluation mechanisms to determine

whether to pursue or avoid future actions

Relationships

• A. The norm of reciprocity– Duties owned to one another because of prior

actions.– Reciprocity traps

• B. The similarity principle– We assume others like us act like us

COGNITIVE BIASES

• A. Irrational Commitment– Irrational commitment to positions

• B. Fixed-Pie Beliefs– Assumption that all negotiations are zero sum

• C. Anchoring and Adjustment– Avoid false or inappropriate anchors

COGNITIVE BIASES

• D. Information availability bias– Giving greater weight to easily available

information and established search patterns.

• E. Winners Curse– Settling too quickly

• F. Overconfidence– Overestimate chance of success– Discount others advice and information

COGNITIVE BIASES

• G. Law of Small Numbers– Tendency to draw conclusions from small

sample sizes.

• H. Self-serving biases– Fundamental attribution error /False -consensus

• Ignoring Other’s Cognition's– Failure to consider other party’s perceptions.

COGNITIVE BIASES

• Reactive Devaluation– Devaluing other party’s concessions

• Reduces willingness to respond.

FAIRNESS

• Principle 1– Multiple Methods of Fair Division

• Principle 2– Fairness is Context Driven

• Principle 3– Fairness is Often Based on Comparisons

FAIRNESS

• Principle 4– People seek equity

• Principle 5– People will attempt to restore equity from

inequity.

• Principle 6– People need to maintain egos

FAIRNESS

• Principle 7– People care about process

• Principle 8– Judgements are affected by relationship

• Principle 9– Egocentrism taints judgement