Successful Negotiations

Getting To Know The Other Side
  • Understand negotiation style of other side.
  • Very important in cross cultural negotiations.
  • Conversation intelligence.
    • Dont talk too much, so avoid your favorite topics.
    • Ask a lot of questions, people like to talk.
    • Listen.
Power In Negotiations
  • Information is the biggest source of power.
  • Information about the other side’s BATNA is critical.
  • Dont share your BATNA if it is weak.
  • Try to weaken the BATNA of other side.
  • Strengthen your BATNA.
    • In some cases you can form coalitions to strengthen your BATNA.
Psychological Tools
  • Mythical fixed pie assumption - out interests are in conflict with other side.
    • Reactive devaluation.
  • Anchoring - who comes up with first price?
    • If value is uncertain - let other side come up with first price.
    • If value is certain - set first price to anchor the negotiation
    • In case of stalemate - use similar deals as a way to break it
  • Overconfidence
    • Makes you select a narrow range when calculating ZOPA.
    • Try to use disconforming evidence.
  • Framing
    • When we have a positive choice, a gain, we are risk averse.
    • When we have a negative choice, a loss, we are pro risk.
  • Availability
    • We are influenced easily by information which is (easily) available.
  • Escalation
    • Look at negotiation from other side.
    • Competitive Arousal
      • Causes - intense rivarly, time pressure, spotlight.
      • Avoid - limit role of intense neogitator, manage time, spread responsibility.
  • Reciprocity - helping the other side is useful.
  • Contrast Principle
    • We compare an option with other available options, not on it own.
    • So good idea to show some really bad options, so the option you want to sell becomes much more attractive.
  • Big picture - dont get lost in the details.

Psychological Tools Checklist