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CHAPTER 3Distributive Negotiation: Slicing the Pie Key Terms THE BARGAINING ZONE Bargaining zone, or zone of possible agreements (ZOPA), represents the region between each party’s reservation point Bargaining zone can be positive or negative (Figures 3–1A and 3–1B) a) If parties fail to reach agreement in positive bargaining zone, the result is suboptimal b) In a negative bargaining zone, parties should pursue other alternatives Figure 3-1A: Positive Bargaining Zone Figure 3-1B: Negative Bargaining Zone THE NEGOTIATION DANCE Bargaining surplus: Amount of overlap between parties’ reservation points Negotiator’s surplus (Figure 3–2): Positive difference between the settlement outcome and the negotiator’s reservation point; illustrates mixed-motive nature of negotiation . Figure 3-2: Negotiator’s Surplus Pie-Slicing Strategies Strategy 1: Assess your BATNA and improve it Strategy 2: Determine your reservation point, but do not reveal it Strategy 3: Research the other party’s BATNA and estimate their reservation point Strategy 4: Set high aspirations (be realistic, but optimistic) Pie-Slicing Strategies Strategy 5: Make the first offer (if you are prepared) Strategy 6: Immediately reanchor if the other party opens first Strategy 7: Plan your concessions Pattern of concessions Magnitude of concessions (GRIT model) Timing of concessions Pie-Slicing Strategies Strategy 8: Use an objective-appearing rationale to support your offers Strategy 9: Do not fall for the “even split” ploy Strategy 10: Appeal to norms of fairness The Power of Fairness A. There are multiple methods of fair division 1. Equality rule 2. Equity rule 3. Needs-based rule B. Rules of fairness are situation-specific C. People are concerned about the “other person” 1. Upward comparison 2. Downward comparison 3. Comparison with similar others What drives the choice of the comparison other? 1. Self-improvement
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