Advanced topics in Distributive Negotiation

Confronting Deception

Strategy 1: Ask direct questions, and listen carefully for non-responses

Strategy 2: Propose a contingency contract

Contingency Contracts

Build on differences. Dont argue over the future, bet on it.

Allow negotiators to spread risk through risk-sharing
Allow negotiators to solve problems of trust without confrontation
Increase the incentives of parties to perform at or above contractually specified levels
Great lie-detection device- diagnose honesty

Perceived zone of possible agreement

Buyers perception of ZOPA

Sellers perception of ZOPA

Beware the confirmation bias

We search for information that supports/ confirms our perceptions and disregard
information that challenges it

Commitment Tactics (in increasing order of aggressiveness)

Providing alternatives
o Finding alternatives that meet both parties needs
Split the difference
o May be more suitable for small differences
Sweeteners
o Be careful not to go beyond reservation price
Assume the close
Ratification
Final offer/ ultimatum
Exploding offers
o Tactic that is likely to anger other party

Hardball tactics

Hardball tactics
o Good cop/bad cop
o Highball/lowball outrageous opening offers
o Bogey- pretending an issue is important when it is not
o The nibble- asking for a little more towards the end of the negotiation
o Intimidation/ aggressive behaviour
o Snow job- inundating the other party with information
Benefits and costs of hardball tactics
How can you use them and how do you defuse them?

Defusing hardball tactics

 When unintentional
o Offer to change to more productive methods
o Agree on rules and procedures
o Improve the accuracy of communication take their perspective, invite them to take
yours
o Control issues reduce the number of substantive issues, state issues concretely
rather than as a principle, restrict precedents
o Establish commonalities
When intentional
o Explicitly acknowledge that the other party is tough and you can be tough too
o Make the first small concession and ask for one in return

How do you ensure satisfaction with the outcome?

Fairness in outcome feeling like they got a good deal

Treatment in the process dignity and respect in particular
Honesty and transparency