Negotiation: An Artful Science
This post will be in a different style from what I usually post. I recently read “Negotiation: An Artful Science” by David H. Henard, and I thought it was interesting. It introduces the basics of negotiation as well as common tactics negotiators use. It even investigates how factors such as ethnicity and MBTI affect how people negotiate. And while I wouldn’t necessarily recommend this book to anyone, I’m sure it’s going to be very appealing to the right people.
Personally, I was quite surprised at how developed the ideas of negotiation were, and I thought it’d be fun to share a (crude) introduction to negotiation.
Vocabulary
A negotiation is an attempt from two or more parties to reach a mutual agreement. The agreement may be mutually beneficial, or it may benefit one party much more than another. Knowing how to negotiate is an important skill because everyone uses it at some point in their lives, whether it’s making large purchases or negotiating salary. It can also save you from spending six yuan on a bar of ice cream. Let’s consider a basic, yet extremely important form of negotiation: between buyer and seller.
The reservation point has a slightly different definition for buyer and seller. For the buyer, it’s the highest price they’re willing to pay for an item. For the seller, it’s the lowest price they’re willing to accept.
The zone of possible agreement (ZOPA) is determined by each party’s reservation points. It’s defined as the zone between the buyer’s and the seller’s respective reservation points. For example, if the buyer is willing to buy for as much as $80 and the seller is willing to sell for as little as $60, then $60 to $80 is the ZOPA. If the buyer’s reservation point is higher than the seller’s, then the ZOPA is positive. If the buyer’s reservation point is lower than the seller’s, then the ZOPA is negative. A positive ZOPA greatly increases the chances of a successful negotiation, and a negotiation with a negative ZOPA usually leads to no agreement, unless the parties adjust their reservation points.
The best alternative to a negotiated agreement (BATNA) is important for both parties to calculate before a negotiation session. It’s an evaluation of what would happen if the negotiation did not go through. For example, if you were applying to a job, then your BATNA would consist of your current salary as well as any benefits you may receive. It would be illogical to accept a negotiated agreement lower than one’s BATNA.
Open-Minded
There are two main types of negotiation.
Distributive negotiation is a fixed-sum (or zero-sum) game; the size of the pie is fixed. A gain for one party is a direct loss for another. This type of negotiation usually applies to simple negotiations, such as between buyer and seller. It also creates a more combative environment, as the parties are less likely to cooperate if compromises constitute a direct loss.
Integrative negotiation is far more common in business settings, especially when there are multiple issues that are being discussed. In integrative negotiations, the size of the pie is not fixed; oftentimes, with a bit of creativity, one can increase the size of the pie, thereby increasing their own gain.
Tactics
Of course, negotiation tactics and cognitive biases will likely be at play. For example, the other party will commonly ask probing questions to gain more information and gain an advantage in the negotiation. They may also employ the “good cop bad cop” tactic. Basically, it provides a contrast between the intimidating “bad cop” and the gentle “good cop”, making the good cop’s offers seem more desirable and creating a false sense of trust. Cognitive biases are very much present too. For example, negotiators will likely exploit the anchoring bias, which states that people rely much more heavily on the first piece of information they receive. There’s also loss aversion, where people value a loss about twice as much as they value a gain of equal value. There’s a lot more that are involved in negotiation, but these are just a few.
And of course, if one wants to improve their negotiation skills, then reading books and absorbing information alone does nothing; one must practice as well. The most sure way to get better at negotiation is to practice and negotiate. Nothing can substitute experience.
Life Update!
It doesn’t hurt to be a bit vulnerable, so I suppose I could talk about something other than “this is what happened this week”. Especially since nothing much happened besides broken promises of sufficient sleep.
I know that regret sometimes serves a purpose and lets us learn from our past mistakes, but I try not to feel regret for minuscule things. For example, I used to regret not skipping 9th grade biology (even though I wasn’t aware it was an option until it was too late), so I was unable to take higher-level science classes until junior year, but now I realize that the regret I felt was pointless. Now it feels like it never mattered. But other things are certainly worthy of regret. For example, I’ve been thinking about my relationship with my family, and I don’t think it’s great? I’m not sure though. I know it could be a lot better, especially since I occasionally notice the pent-up resentment I feel towards them for past events. I despise how my mother holds things over my head to get me to do things she wants. I despise how she uses authority and guilt to shut down any arguments I have, conveniently telling me to “talk to [her] once [my] attitude is fixed”. Admittedly, I am a dependent, so it doesn’t exactly seem like I have much of a say in the matter, but that’s fine.
(Also oh my gosh, I completely forgot to mention last week, but I’ve been writing weekly posts for half a year. That’s crazy.)
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