Negotiation Fundamentals & Strategies Flashcards

In a distributive negotiation, what does 'anchoring' refer to?

Answer: Setting the first offer to influence the negotiation range

Anchoring is the cognitive bias where the first number introduced in a negotiation heavily influences subsequent offers and counteroffers.

What is the primary distinction between interests and positions in negotiation?

Answer: Interests are the underlying needs; positions are the stated demands

Positions are what negotiators say they want, while interests are the underlying motivations, needs, or concerns driving those demands.

Which negotiation strategy focuses on expanding the total value available before dividing it?

Answer: Value creation

Value creation (integrative negotiation) involves identifying trade-offs and compatible interests to enlarge the total pie before splitting it.

A negotiator's 'reservation price' is best defined as:

Answer: The point at which a negotiator prefers no deal over the proposed deal

The reservation price (or walk-away point) is the least favorable deal a negotiator will accept before breaking off negotiations entirely.

When two parties' reservation prices overlap, what is this region called?

Answer: The Zone of Possible Agreement (ZOPA)

The Zone of Possible Agreement (ZOPA) is the range between each party's reservation price where a mutually acceptable deal can be struck.

Which of the following best characterizes a 'logrolling' tactic in negotiation?

Answer: Trading concessions on issues of differing priority to each party

Logrolling involves trading off concessions where each party gives up something of lower value to them in exchange for something of higher value, creating mutual gain.

What effect does time pressure typically have on negotiation outcomes?

Answer: The party under greater time pressure tends to make larger concessions

The party with more time pressure is typically at a disadvantage because they are more likely to make concessions to close the deal quickly.