Negotiation 2

The outcome of the Appleton v. Baker negotiation was successful for both parties. It started with some small talk to feel out the environment around the negotiation since there was limited information in the case that was distributed. I, representing the Bakers, made the first offer of $9000, which in hindsight may have been too high. My rationale was that I would have more credibility making a fair offer with the knowledge that the land had been purchased for $7000 and had appreciated over the last 8 years. The Appletons representative made a counteroffer of $13000. Upon discussing this number I realized that my first bid was well above the Appleton's walk away price. I then took the standpoint that the Bakers were trying to be fair and didn't have very much flexibility in their offer, and that it was seeming more and more like the Appletons were desperate to get rid of the plot. My next offer was $9500, which was countered with $11000, and a settlement was ultimately made at $10000. As my target before the negotiation was $11000 and walkaway was $20000, I did well relative to these numbers but there was a wides ZOPA.

_4_ Planning and Strategy: did I have a strategy; was my walkaway right; did I estimate the other’s well? Estimated others too high.
_4__Did I establish my own priorities and potential trade-offs
_5__First approach: were we win-win, positive; try to establish rapport; did I deal with first offers effectively?
_4_How well did I develop a plan for managing the process of negotiation?
_4__Did I actively shape the agenda and manage the process to my advantage?
_4__How well did I try understand the other person:
_4__Exploring Interests: did I communicate my interests;
_5__Persuasion: How well did I persuade the other side about my legitimate needs and limits and the value of what I offered
_4__The Other's Interests did I find out the other side's real interests and constraints
_4__Creating Value (integrative or win-win) vs Claiming Value (distributive or win-lose)
_4__Options: Did we explore "expand the pie" options: did we try to find ways of meeting each party’s needs
_4__Inquiry vs. advocacy: did I ask (inquiry) a lot of questions, or just advocate my position. Did a fair amount of both. More towards asking questions.
_2__Alternatives: Was I clear on my BATNA; was I clear about what happens if there is no agreement
_4__Legitimacy: was the agreement considered fair by some external benchmark
_5__Commitments: did the agreement avoid problems in the future; were any “strings left untied?”
_5__Communication: did we practice effective two way communication…did we listen…did we rephrase…
_5__Focus on the problem, not the person: did we avoid attacking or threatening the other person
_5__Relationship: did we deal well with differences; is our relationship better off now than before
_5__Psychological factors: did outside factors (eg. emotions) affect the outcome (their efforts or ours)
_4__Did we reach an outcome that maximized potential mutual gains; did we come close to the "Pareto Frontier?"

The key to success in this negotiation was conversation regarding the situation surrounding the Appletons' move. By talking about the situation I was able to learn that there was already a buyer for the Appleton home and the fact that the Appletons were approaching the Bakers meant that there was some desperation. Through discussion I was also able to get a sense of body language and tone (although I already knew my opponent) and how these changed throughout the negotiation. I also was able to gain trust and paint a picture that the Bakers didn't have much to offer as a teacher and bookkeeper, but were friendly neighbors who did had an interest in the plot, and were trying to make a fair offer. I convinced my opponent that I had limited flexibility beyond my initial offer -- only moving $1000. On the whole I think that I did a good job with the exception of setting my initial offer too high. I'm not sure how I would combat this. I think by making the initial offer I was able to get a good sense for where I stood, but this was a little too late. On the otherhand, with the high walkaway, a high initial offer by the Appletons may have thrown me off as well.

Negotiation 1

The nickel game poses some interesting questions. How does someone actually know that their opponent has best intentions, especially when it is unclear what the value of maintaining a good relationship is for unknown future games? It is clear that when everyone looks out for each others interests they can maximize their gain. This means, in seven turns in the in class game, 16 cents for the person who went first and 12 cents for the person who went second. The first group that played the game left some money on the table, but after feeling each other out gained trust, which is key to maximizing profits in this game and mutually they made more money. The second group had one player that approached the negotiation as a win-lose scenario and another who approached as a win-win. Although more money was left on the table the player with the win-lose approach returned a profit of 16 cents, the highest of everyone, while the win-win player only had a gain of about 8 cents, the lowest. Although everyone wins in win-win negotiations, how does one achieve a win-win negotiation when one is uncertain of the other party's motives and goals. The risk is high that if one party attempts to achieve mutual gains while one seeks personal gains the former will get the short end of the stick. A key to mutual acknowledgment of win-win negotiations is trust and this must be established through dialogue prior to entering into the substance of the negotiation. Other times reputations and personal relationships may be enough to establish trust, but not all situations lend themselves to this type of negotiations and parties may disagree about what type of negotiation is truly best for their mutual goals. In a world where there will always be a future negotiation there is little rationale for making the opponent lose or trust will be lost, there will be no future negotiations and the winner will be the ultimate loser.