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DB structure: Scenarios

DB structure: Scenarios. Bargaining Zone: Scenario 1. The bargaining zone is the space between the buyer ’ s reservation price (BR) and the seller ’ s reservation price (SR) – that is, the zone of possible agreement. If BR < SR , then there is no zone of possible agreement. S R. B R.

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DB structure: Scenarios

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  1. DB structure: Scenarios

  2. Bargaining Zone: Scenario 1 • The bargaining zone is the space between the buyer’s reservation price (BR) and the seller’s reservation price (SR) – that is, the zone of possible agreement. • If BR < SR, then there is no zone of possible agreement. SR BR Negative Bargaining Zone

  3. Bargaining Zone: Scenario 2 • The bargaining zone is the space between the buyer’s reservation price (BR) and the seller’s reservation price (SR) – that is, the zone of possible agreement. • If BR > SR, then a zone of possible agreement exists. The zone of agreement is from SR to BR. SR BR Positive Bargaining Zone

  4. Reminder: Distributive Negotiation Strategies • Know your BATNA • Strengthen your BATNA whenever possible • Highlight the strength of your BATNA without providing specifics • Define your own reservation price • Do not reveal your reservation price • Define your aspiration level • Focus on your strengths; be realistic but optimistic • Research the other party’s BATNA/reservation price • Get more information during the negotiation • Make aggressive first offers whenever possible • Watch how you are making concessions • Make sure that concessions are reciprocated • Consider what commitment tactic to use • Try to include more issues!

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