BUS 485 Chapter Notes - Chapter 3: Best Alternative To A Negotiated Agreement, Zopa, Reservation Price

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 485
• Professor: mitra kiamanesh

Document Summary

Negotiations dance: the entire process of making an opening offer and then reaching a mutually agreeable settlement. Expanding the pie: win-win agreements (even in a win-win, the pie of resources created by negotiators eventually has to be sliced) Bargaining zone (zone of possible agreements zopa): the range between the negotiators" reservation points. The final settlement of a negotiation will fall somewhere above the seller"s reservation point and below the buyer"s reservation point. Positive: the reservation points overlap; the most the buyer is willing to pay is greater than the least the seller will accept. Negative: costly - negotiators spend hours trying to reach an agreement; no positive overlap between the parties" reservation points. Bargaining surplus: the amount of overlap between parties" reservation points; the size of the bargaining zone, or otherwise known as the size of the pie that will be sliced.