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CHAPTER 4 4-1

Win-Win Negotiation:
Expanding the Pie
CHAPTER 4 4-2

Faulty Perceptions of
Win-Win Negotiation
Compromise
Even split
Satisfaction
Building a relationship

Instructors Manual with Overheads to accompany Copyright 2009 Pearson Education,


The Mind and Heart of the Negotiator 4/e (Thompson) Inc. publishing as Prentice Hall
CHAPTER 4 4-3

Telltale Signs of Win-Win Potential

Does the negotiation contain more than one issue?


Can other issues be brought in?
Can side deals be made?
Do parties have different preferences across
negotiation issues?

Instructors Manual with Overheads to accompany Copyright 2009 Pearson Education,


The Mind and Heart of the Negotiator 4/e (Thompson) Inc. publishing as Prentice Hall
CHAPTER 4 4-4

Exhibit 4-1: A Pyramid Model


of Integrative Agreements

Level 3:
Pareto-optimal

Level 2:
Settlement demonstrably superior
to other feasible settlements

Level 1:
Mutual settlement
(positive bargaining zone)

Instructors Manual with Overheads to accompany Copyright 2009 Pearson Education,


The Mind and Heart of the Negotiator 4/e (Thompson) Inc. publishing as Prentice Hall
CHAPTER 4 4-5

Expanding the Pie:


Strategies That Do Not Work
Commitment to reaching a win-win deal
Compromise
Focusing on a long-term relationship
Adopting a cooperative orientation
Taking extra time to negotiate

Instructors Manual with Overheads to accompany Copyright 2009 Pearson Education,


The Mind and Heart of the Negotiator 4/e (Thompson) Inc. publishing as Prentice Hall
CHAPTER 4 4-6

Exhibit 4-2: Types of Information in Negotiation and How Each Affects Distributive and Integrative
Agreements
Type of
Definition (example) Claiming Value Creating Value
Information
BATNA The alternatives a negotiator has outside of the Revealing this information severely hurts Revealing or obtaining this information does not affect
(and current negotiation (e.g., If I dont buy your ability to maximize negotiator surplus ability to reach level 2 or 3 integrative agreements;
reservation car, I can buy my uncles car for $2,000) might help negotiators reach level 1 integrative
price) agreements
Position Usually, a negotiators opening offer; the Opening with an aggressive target point Does not affect integrative agreements
(stated behavioral manifestation of his/her target point significantly increases the negotiators
demand) (e.g., I will give you $1,500 for your car) surplus (share of the bargaining zone)
Underlying The underlying needs and reasons a negotiator Revealing this information generally Very important for reaching win-win deals; by
interests has for a particular issue (e.g., I need a car increases likelihood of obtaining a (truthfully) revealing underlying interests, negotiators
because I need transportation to my job site, favorable slice of the pie because can discover win-win agreements (e.g., one sister tells
which is 15 miles away in a rural zone) negotiators who provide a rationale for the other that she wants the orange because she needs to
their demands are more adept at realizing make juice and has no need for rinds)
their targets
Priorities A judgment about the relative importance of the Increases a negotiators surplus Vitally important for maximizing the pie (e.g., the sister
issues to a negotiator (e.g., I am more indirectly, because if more value is who said she cared more about the rinds relative to the
concerned about the down payment than I am created via sharing priorities, then the juice created potential for integrative agreement)
about the financing for the car) probability that a negotiator will get a
larger slice of the pie increases
Key facts Pertains to information that bears on the quality This information can affect the slice of Affects the quality of win-win agreements in that failure
and the value of the to-be-negotiated issues the pie the negotiator obtains in that facts to reveal key information may lead a negotiator to over-
(e.g., The car has a rebuilt engine and has been either increase or decrease the value of or undervalue a particular resource (e.g., someone who
involved in a major collision; The oranges the to-be-negotiated issues sells fresh organic orange juice does not want to have
are genetically modified) genetically-modified oranges as an ingredient)
Substantiatio Argument either made to support ones own Most dominant type of distributive tactic A distributive tactic; does not increase win-win
n position or to attack the other partys position (24% to 27% of all statements);** can negotiation and may, in fact, reduce likelihood of win-
(e.g., You will get lots of dates if you buy my increase a negotiators slice of the pie win*
car because women like it) because providing a rationale (even an
absurd one) can often be effective in
obtaining a demand
Pruitt, D. G., (1981). Negotiation Behavior. New York: Academic Press; Hyder, E. B., Prietula, M. J., & Weingart, L. R. (2000). Getting to best: Efficiency versus optimality in negotiation.
Cognitive Science, 24(2), 169204. ** Carnevale, P. J., & Lawler, E. J. (1986). Time pressure and the development of integrative agreements in bilateral negotiations. Journal of Conflict Resolution, 30(4), 636659.

Instructors Manual with Overheads to accompany Copyright 2009 Pearson Education,


The Mind and Heart of the Negotiator 4/e (Thompson) Inc. publishing as Prentice Hall
CHAPTER 4 4-7

Expanding the Pie:


Strategies That Work (I)
Perspective-taking
Ask questions about interests and priorities
Provide information about your interests and priorities
Unbundle the issues
Make package deals, not single-issue offers
Make multiple offers of equivalent value simultaneously

Instructors Manual with Overheads to accompany Copyright 2009 Pearson Education,


The Mind and Heart of the Negotiator 4/e (Thompson) Inc. publishing as Prentice Hall
CHAPTER 4 4-8

Expanding the Pie:


Strategies That Work (II)
Structure contingency contracts by capitalizing on
differences
Valuation
Expectations
Risk attitudes
Time preferences
Capabilities
Cautionary note on effective contingency contracts
Presettlement settlements (PreSS)
Postsettlement settlements

Instructors Manual with Overheads to accompany Copyright 2009 Pearson Education,


The Mind and Heart of the Negotiator 4/e (Thompson) Inc. publishing as Prentice Hall
CHAPTER 4 4-9

Exhibit 4-6: Decision-Making Model


of Integrative Negotiation

not acceptable
(optimistic)
not acceptable
(bleak)
Construct Current
Resource Assessment
Offers and Best Impasse
Assessment of Differences
Trade-Offs Terms

both agree

Implement
Postsettlement Agreement
Settlements

Instructors Manual with Overheads to accompany Copyright 2009 Pearson Education,


The Mind and Heart of the Negotiator 4/e (Thompson) Inc. publishing as Prentice Hall
CHAPTER 4 4-10

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Inc. publishing as Prentice Hall