Negotiation Mistakes & Biases
Not doing this will cause relying on instinct and reacting “on the fly”.
What is failing to plan?
This kind of temporary alliance is used to gain more bargaining power in contract talks with a large retailer, a group of small suppliers might band together in.
What is a Coalition?
Knowing this before negotiating gives you confidence and prevents accepting a deal worse than your fallback option.
What is understanding your BATNA?
What are issues in a negotiation?
Issues are the things you negotiate, like money, time, or benefits and they are the building blocks of agreements.
Assuming the other side shares your beliefs or priorities refers to this common planning mistake.
What is the false consensus effect?
Name one of the five types of power and provide the definition.
Potential power: based on one’s position or other source of power
Actual power: based on other party acknowledging the power and giving you value as a result
Legitimate power: determined by an individual’s organization role and status
Coercive power: results from being able to inflict punishment on another
Resource power: ability to obtain value from others as a result of control over a desired resource
Gives you information about when to walk away and guards you against influence attempts during the negotiation.
What is a resistance point?
What is the difference between obvious issues and potential issues?
Obvious issues are those both sides know must be negotiated, while potential issues are additional topics you can brainstorm before the negotiation begins to create more options at the table.
Setting goals that are too precise, such as targeting specific numbers for each issue, can cause negotiators to miss creative opportunities.
What is overspecification?
What is the difference between power and influence?
Power is the capacity or potential to cause change in someone’s behavior, attitudes, or values and beliefs.
Influence is the degree of actual change in someone’s behavior, attitudes, or values and beliefs.
Because the path of a negotiation can never be fully predicted. This quality is more important than being exact in a negotiation plan.
What is flexibility or being flexible?
Why can a preference table from one negotiation become inaccurate or misleading in a future negotiation with the same person?
Because preferences are situation-specific, what each party values can change with time and context, so rankings and scores of today may not reflect future priorities or interests.
This bias causes negotiators to continue investing in a failing strategy because they’ve already spent resources on it.
What is the sunk cost bias?
During a merger discussion, a junior analyst uncovers exclusive financial data that could change the entire deal, but hasn’t revealed it yet. Although the analyst lacks formal authority, their undisclosed leverage gives them what type of power.
Potential power
What is flexibility in negotiations?
Adapting your plan and responding strategically rather than rigidly following your script, allowing you to adjust when new information or challenges arise
What technique allows negotiators to trade less-important issues for those they value more?
Logrolling
Becoming so focused on fighting or getting back at the other side that you lose sight of the goal can cause this negotiation result.
Can also be caused by a lack of ideas.
What is an impasse or stalemate?
ABC Logging Company is the only company that provides high-quality redwood to XYZ Furniture Manufacturing. There has been a recent upsurge in demand for red-wood furniture, however ABC Logging refuses to provide them with the extra redwood until XYZ agrees to pay more for the shipments. What kind of power is being used here?
Coercive power - ABC is punishing XYZ by withholding needed resources
Resource power - ABC has control of a desired resource and is using it to negotiate new contract terms
You discover new information mid-negotiation that weakens your BATNA. According to the reading, what two steps should a skilled negotiator take in response — one tactical and one psychological?
Tactically: Reassess your leverage and explore new creative trade-offs.
Psychologically: Stay composed and avoid revealing the weakness while recalibrating your goals and resistance point.
What is the purpose of creating a preference table when planning a negotiation?
To organize and rank negotiation issues by importance so you can compare trade-offs and evaluate how much of one issue you’re willing to give up to gain more of another.