Raiffa Reading

(Ctools) Raiffa, “Two Parties, One Issue” pp. 33-34, 126-130, The Art & Science of Negotiation (Harvard University Press), 1982.

Two-party bargaining

  • Distributive and integrative
    • Distributive – one issue is under contention and the parties have almost strictly opposing interests on the issue

Checklist for Negotiation

Preparing for Negotiations

  • Know yourself – what you need, want, aspire to; know your walk-away point
  • Know your adversaries – speculate about alternatives, what will happen if no deal is struck
  • Negotiating conventions – how open should you be, can you trust your adversary’s word, etc.
  • Consider the logistics – who should negotiate? Need professional assistance?
  • Simulated role playing – can be of value
  • Set aspiration levels – what contract value should you strive for? Have a target level a reasonable distance from your walk-away price

Opening Gambits

  • First offer – can sway perceptions or cause animosity
  • Reaction to first offer – midpoint of two offers will be focal point – compare with aspiration level
  • Protect integrity – avoid giving false information

The Negotiations Dance

  • Patterns of Concessions – monotone decreasing, i.e. become successively smaller, signaling that you are approaching your limit
  • Reassessing perceptions – reassess opinion on adversary’s reservation price

End Play

  • Making commitments
  • Breaking commitments gracefully
  • Help adversaries to break a commitment gracefully
  • Deception is immoral
  • Not a commitment if both sides realize it can be broken early
  • Introducing an intervenor
  • Broadening the domain of negotiation