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Negotiating Strategies: Creating Value and Maximizing Outcomes

Dive into the world of bargaining strategies with insights on BATNAs, ZOPA, and the Nash Solution. Learn to create value, prioritize interests over positions, and enhance your negotiation skills. Explore the art of bargaining for optimal outcomes.

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Negotiating Strategies: Creating Value and Maximizing Outcomes

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  1. Lecture 4Negotiating Strategy • Sally Swansong • Axiomatic (Nash) Bargaining

  2. Sally Swansong • Quick Exercise: After interacting, think about BATNAs. • Sally’s Agent: Write down what you think the most the Lyric would have paid? • Lyric: Write down what you think the least Sally would have accepted? • Do you think your BATNA was stronger or weaker than the other side?

  3. Sally Swansong • The Obvious: • Your goal is not to reach an agreement, • Goal is to create value and do well for yourself. • Involves? • Improving your BATNA • Not doing deals that don’t make sense • Trying to find ways of creating joint (or solo) value.

  4. Sally Swansong • What is the ZOPA? • Zone of possible agreement: $0--$45k • Interests versus positions • Ego versus allocentric • Issue of preparation

  5. Interests? Sally: • Making a comeback • Proving she still has it • Reputation • Performing star role (and being treated as such) • Salary precedent • Firm contract Opera: • Successful Norma • Not creating salary precedent • Finding best talent • Not losing money • Publicity

  6. Nash Solution • Axioms (Assumptions that we’ll use to solve a bargaining problem.) • Respects affine transformations • IIA (Independence of Irrelevant Alternatives) • Pareto Efficiency • Symmetry

  7. Next Time • Readings for Next Time: • Raiffa, pages 251-274 & 288-299 • Bazerman, pages 127-139 • Nash: The Bargaining Problem • Optional: • Osbourne & Rubinstein, Chapter 13. An Introduction to Coalitional Bargaining

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