Mentions behavioural economics applied to negotiation in essence if somebody has a much stronger set of options there like to be a more aggressive negotiator than somebody with a less attractive set of alternatives. Outlines the importance of setting your reserve price and sticking to this.
Realise that a bargaining zone only exists when there is an overlap between the seller and the buyer.
Realise that each party may value money differently, so although £5 maybe significant to one, maybe insignificant to others, whereas delivery time or time spent by someone maybe more significant to other party.
Attempt to create value by seeing what both parties want. This may differ, then you can come to a good compromise. General note when when negotiating for yourself be cautious not to divulge too much of your information without the other party doing similar otherwise they could take advantage of you
Search for multiple issues that each party values differently and consider how to make the best deal. You may want to consider a contingency contract, although note even the contingency contract actual value may differ from one or both parties initial perceptions.
The first goal of negotiation is to know exactly what you want, don’t lose sight of this this. Otherwise often your goal can change without you intending it to. The second phase is establishing the preferences and goals of the counterpart you were negotiating with the final phase is to utilise this matrix to come to an agreement.
In negotiation generally do not reveal your true reservation price, the person will assume it is not your true reservation price so they negotiation won’t complete.
Clearly your method of negotiation depends on if there is going to be an ongoing relationship or not. If you are negotiating with somebody for a one-off transactional relationship you may consider more threats, if however there’s a longitudinal relationship such as friendship then threats are perhaps not best.
Interestingly suggests friends negotiated better than married couples who negotiate better than strangers. One of the things to establish is somebody’s reputation and the impact it would have on them. So if there is a credible threat or a credible promise it’s much more likely to be credible if there’s a long term relationship or a friend who knows them.
Outlines the importance of power in negotiation if there is one team who are more powerful than the other team. The powerful team are more likely to make the less powerful team provide value-adding propositions. Whereas two powerful teams or two teams with minimal power are unlikely to have great negotiation overall.
The impact of emotions on negotiation are important. At times being angry, but not that angry so you are throwing things can occasionally be used to obtain more.
Focusing about your aspirations or alternatives in negotiations is important. Aspiration negotiation, in which you are optimistic about what you can achieve leads to better outcomes but less satisfaction when completed. Whereas a focus on alternatives, particularly if your options are limited leads to often worse outcomes but greater satisfaction when the negotiation is over. The key point is to be aware of both.
In auctions do not fall for the winners curse. This is when you buy or sell for much more or less than the true value. Auctions can be good if price is the main thing, rather than secret information paradoxically. If there’s more bidders book argues you should bid less so you don’t risk overpaying rather than getting competitive arousal and bidding more. Note other bidders as just other parties who are interested not competition.
Interestingly suggests after a deal comparing yourself with other buyers, even if you do better by paying less, doesn’t add to your satisfaction. If you are a seller and managed to sell for more than your rival sellers you feel better whereas if you sell for less you feel worse
Objectively after a negotiation it’s often not clear how well you did therefore people rely upon their actual feelings. When you end a negotiation don’t leap up and down with joy, this is likely to make the other party think they’ve done badly so keep this feeling on the wraps!
Finally outlines the importance of preparation and focus for negotiation
