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Two party, multi-issue negotiation

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Two party, multi-issue negotiation

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  1. Two party, multi-issue negotiation

  2. The fruit example1B&2O (Sam who hates banana) vs. 1P&2A (Willy who hates pear) Increasing Value to Sam • Minimize # of disliked fruit • Maximize # of preferred fruit • Maximize variety of fruit 1P 1A 2O Claiming Value P-B & A–O trade Willy=1B 1O 1A Sam=1P 1O 1A Creating Value Pareto Efficient Frontier 1P 2O P- B trade 1B 2O Increasing Value to Willy 1P 2A 1B 2A 1B 1O 2A

  3. Differences in Conceptions of Negotiation

  4. Negotiation involves BOTH value creating and value claiming • e.g., Pie has to be enlarged, but it still divided and each piece must be claimed. If the pie is not enlarged, there will be less to divide (i.e., there is more value to be claimed if one has created it – so don’t be shy!)

  5. Negative Effects of Value Claiming Strategies • Minimize other party’s concessions & Maximize value of own concessions misrepresent one’s own preferences • Make threats, extreme commitments to own positions impedes understanding of other’s interests • Conceal information–> leaving joint gains @ table • Sours relationship, reduces trusts

  6. Negative Effects of Value Creating Strategies • Can lead to tactics of claiming value • Share Information about one’s relative preferences is risky • They can exploit you on an issue you care about even if they don’t care about it… • Being creative may signal that you are willing to make more concessions • Disclosing that you have shared interests  used as leverage to gain concessions (e.g., child custody vs. alimony)

  7. Negotiator’s Dilemma (compare with Prisoner’s Dilemma)

  8. Negotiator’s Dilemma vs. Prisoner’s Dilemma • Prisoner’s dilemma does not have communication between parties • Typically single round • Parties cannot make commitment to cooperate before making choices

  9. Managing Value Claiming vs. Value Creating Strategies • Do better than no-agreement • Fruit example • Deep understanding of own & other’s interests and making tradeoffs between them • What are ‘interests’? • (until 3.00 min) • Convert own and other’s interests into joint gain

  10. More on the pareto efficient frontier • • Fairness vs. efficiency

  11. Managing Value Claiming vs. Value Creating Strategies: Cont’d • Add new issue (expand pie) • • Some terms to learn • Interests= why you want what you want • Issues =what you want • Position= Your point of preference on the issue • e.g., want 40K on salary in video example • Interest= to pay of student loan which can be satisfied with a different issue (i.e., signing bonus)

  12. Issues vs. Interests • Interests can be satisfied with different issues • Different issues can represent the same interests • Seeing interests as perfectly aligned with positions on issues, makes it less likely to shift positions on issues and more likely to forgo better outcomes for themselves or mutually beneficial outcomes

  13. Types of Interests • Parties Can have more than one interest at a time • Parties can have differing interests • Interests are often based on values • E.g., recognition, safety etc. • Can change over time So… Clarify own AND others’ interests • Ask why, • differentiate b/w intrinsic and instrumental • Need not be to one’s best advantage (objective vs. subjective)

  14. Types of interests: Intrinsic vs. Extrinsic

  15. *Single, multiple, single  multiple Define Issues *Research to gather info, consult with experts in area of issues value issues objectively Define the Mix of issues Connections b/w issues Articulate the ‘why’ for issues, value interests (even intangible ones), distinguish issues from interests Define Interests Types (Substantive, process related, relationship based), intrinsic vs. extrinsic Resistance point Identify Limits & Alternatives BATNA (is negotiated agreement better than non agreement than agreement with another?) *Specific, difficult but achievable, verifiable *Different ways of packaging issues (Trade-offs) *Target point Set targets *Opening Bid *Range

  16. Valuing Own Interests • Generate assessments of intangible interests (order of magnitude) • E.g., suffering vs. comforts gained in certain issues • Decide the priority of intangible interests • Use secondary priorities on interests when packages become equal

  17. Assessing Other’s Interests • Remember that interests depend on subjective perceptions so PROBE via communication, and research (with third parties, previous behaviors, organizational information etc.) • Issues and interests can change over the negotiation

  18. Tradeoffs • Decide on what / how much of a tradeoff on issues is desirable • Interest rate vs. purchase price example • Specify worst vs. best outcomes on each issue, define possible increments • Compare increments by thinking about interests and which increments are most valued • Break increments into smaller pieces and compare relative evaluation • Assess interest tradeoffs using above logic

  19. When to focus on Issues vs. Interests • Focus on interests helps creativity and helps reformulate issues to better align with interests • Focus on issues when the interests are based on conflicting values

  20. When you meet the other party • Identify & Define problem together • Identify needs/interests • Generate alternatives/solutions to problem • Evaluate alternatives and select best one

  21. Steps in Integration Process • Identify & Define problem- together • Mutually acceptable definition • Make it simple (identify linked vs. separate issues) • Frame as goal & Outline addressable obstacles • Separate person from issues • Develop standards to assess quality of agreement

  22. IV. Evaluate & Select Alternatives • Evaluate on Quality and Acceptability • Decide on objective criteria before negotiation, periodically verify priorities • Articulate your reason for interests • Be aware of, and discuss intangibles • Subgroups for complex issues

  23. Things that make integrative negotiation happen! • Sharing a common goal/objective • Problem solving ability • Valuing own & other’s position • Motivation to work together • Trust • Clear & Accurate communication • Understanding dynamics

  24. Things that prevent integrative negotiation • Relationship history • Belief in resolving issue distributively • Mixed motive features