The Bargaining Zone and The Negotiation Dance; Negotiator’s surplus; Pie-Slicing Strategies; The Most Commonly Asked Questions; The Power of Fairness; Avoiding Problems through Wise Pie-Slicing

1. Distributive Negotiation:
Slicing the Pie
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2. The Bargaining Zone and
The Negotiation Dance
• Bargaining zone, or zone of possible agreements
(ZOPA), represents the region between each party’s
reservation point
• Positive vs. Negative bargaining zone:
▫ Failing to reach agreement in positive bargaining zone –
suboptimal result
▫ Negative bargaining zone – should pursue other alternatives
• Bargaining surplus: Amount of overlap between parties’
reservation points
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3. Negotiator’s surplus
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• Positive difference between the settlement outcome and
the negotiator’s reservation point
• Illustrates mixed-motive nature of negotiation

4. Pie-Slicing Strategies (I)
1. Assess your BATNA and improve it
2. Determine your reservation point, but do not
reveal it
3. Research other party’s BATNA and estimate
their reservation point
4. Set high aspirations (be realistic, but
optimistic)
5. Make the first offer (if you are prepared)
6. Immediately re-anchor if the other party
opens first
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5. Pie-Slicing Strategies (II)
7. Plan your concessions
▫ Pattern
▫ Magnitude
▫ Timing
8. Use an objective-appearing rational to support
your offers
9. Appeal to norms of fairness
10. Do not fall for the “even split” ploy
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6. The Most Commonly Asked Questions
• Should I reveal my reservation point?
• Should I lie about my reservation point?
• Should I try to manipulate the other party’s
reservation point?
• Should I make a “final offer” or commit to a
position?
• Saving face
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7. The Power of Fairness (I)
• Multiple methods of fair division
▫ Equality rule
▫ Equity rule
▫ Needs-based rule
• Rules of fairness are situation-specific
• People are concerned about the “other person”
• People seek equity in their relationships with
others
• When people sense inequity, they will attempt to
restore it
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8. The Power of Fairness (II)
• People evaluate not only the fairness of outcomes, but
also the fairness of procedures by which those outcomes
are determined
• Judgments about what is fair are driven by the nature of
the relationship with the other party
• Egocentrism taints judgments of fairness
• People don’t realize that they are self-serving
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9. Avoiding Problems through
Wise Pie-Slicing
• Consistency
• Simplicity
• Effectiveness
• Justifiability
• Consensus
• Generalizability
• Satisfaction
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10. Avoiding Problems through
Wise Pie-Slicing
• Consistency
• Simplicity
• Effectiveness
• Justifiability
• Consensus
• Generalizability
• Satisfaction
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