BU288 Lecture Notes - Lecture 15: Escalation Of Commitment, Reservation Price, Best Alternative To A Negotiated Agreement
Document Summary
Theoretically, nobody loses in a negotiation b/c nobody accepts a deal that makes it worse off (but irl, a lot of the times people do) Bad deal is anything that doesn"t give us breakeven cash flow. You don"t just want to breakeven, you want the best deal you can get target price. Consider other party"s point of view (e. g. look at their receipts, their net) List of every negotiating point what she has that you want, what we have that she wants. Look for solutions that can satisfy both parties. Integrative: divide pie by half and both team"s benefits will be maximized. Irrational escalation of commitment we"re human and we like to succeed. Feeling of failure if we don"t get a deal so we just negotiate until we get a deal, which might make us worse off than no deal. Reservation price: their bottom line if they don"t get an offer that reaches their breakeven, they"ll walk away.
