NEGOTIATION/ PREPARATION

• A. Target (Aspiration) Point – Most preferred or ideal settlement • B. Reservation Point (BATNA) – Least favorable settlement. (Can settle or walk away.) –

B

est

A

lternative

T

o a

N

egotiated

A

greement –

PREPARATION

• BARGAINING ZONE ( settlement zone) – Region between the parties reservation points • Positive bargaining zone (Reservation points overlap) – settlement possible

(Thompson Page 35)

• Negative bargaining zone (Reservation points do not overlap) – settlement not possible – Bargaining Surplus - Amount of overlap

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 similariity 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 to 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