Negotiations - The Coursera Treatment 2: Seidel

Posted by Beetle B. on Sun 04 September 2016

Should I Negotiate?

Consider the time spent in preparing and executing the negotiation, and the expected gain. Is the time spent worth it? If you had used the time for something else, what could you have gained instead?

Is there a risk involved in negotiating? Some people will get upset if you try to negotiate with them.

Positional Bargaining

Always search for underlying interests, but always be prepared for positional bargaining. Even when you have ascertained the interests, you have to formulate a position at some point and present it to the other side.

Deal Making vs Dispute Resolution

Deal Making:

  • Forward Looking
  • Interest based
  • Problem Solving

Dispute Resolution:

  • Backward Looking
  • Position Based
  • Adverserial

Are you in a deal making situation or a dispute resolution situation?

Dispute Resolution

Search for interests even in dispute resolution.

6 processes of dispute resolution:

  • Power
  • Litigation
  • Arbitration (3rd party decides the outcome)
  • Mediation (3rd party does not decide the outcome)
  • Negotiation
  • Avoidance

Alternative Dispute Resolution: Litigation is costly. Negotiation, mediation and arbitration are the alternatives.

Deal Making

It is OK to use arbitration or mediation here as well!


Key questions you should ask in the planning stage:

  • What is the overall goal in reaching an agreement?
  • What issues are important to you? And why are they important?
  • What is your BATNA?
  • What is your reservation price (the minimum price you’ll accept)?
  • What is your most likely price?
  • What is your stretch goal?

People who pick larger stretch goals, on average win the most (in the long run). They do lose individual cases more often, though.

Now ask/answer the same questions about the other party!


In dispute resolution, keep in mind that the BATNA may involve litigation or arbitration.

Use decision trees in making decisions based on BATNA.

Cross Cultural Negotiation

Learn about the culture, but do not stereotype. Do not expect the other party to conform to the culture without verifying.

Use the (GAP analysis?) tool to evaluate the other culture.

When attempting to act in the other culture’s manner, be aware you may easily offend. It may look superficial. Identify key features and taboos, and act on those.

In general, respecting the other culture is more important than adopting it.

Ethics and the Law


Some sources of non-legal ethics:

  • What would a mentor do?
  • Are you willing to explain it to family and friends?
  • What if your actions appeared in a local newspaper and everyone you knew read it?
  • What does your gut say?

Having a strong reputation for being honest and fair often benefits you in the long run. So it may be worth the “cost” early on (where you know insisting on fairness will make you lose money) for gains later on.

Using Agents in a Negotiation

Should you use one?

  • Is the agent a better negotiator than you?
  • Does the agent have better knowledge of the field?
  • Are you emotionally attached to the issue? An agent will not emotions interfere.
  • Are you too busy to negotiate?

You very often will be negotiating with an agent. The first question you should ask the agent is:

Do you have authority? How much authority do you have?”

3 types of authority:

  • Express - Explicitly has authority
  • Implied - Is in a position (e.g. at a company) that usually has authority.
  • Apparent

An agent may give a “legal” document indicating authority, but that does not mean he/she does have the authority. Think of the case where a borrower needed a loan, and his manager said that on behalf of the company, he is authorized to have the company provide collateral.

The borrower defaulted, and the bank went after the company. The courts ruled that the company did not have to pay as the manager was not authorized to have the company provide collateral.

So don’t take the agent’s word of authority. Go ask the one he/she is representing! (In this case the company)

Power In Negotiations

Information is the main source of power in a negotiation.

The best negotiators are the ones who know:

  • The best questions to ask
  • The best way to ask
  • The ability to listen to the answers

The importance of listening well cannot be overstated! It also correlates highly to career performance.

The most important knowledge to attain is information about the other side’s BATNA. So you can either improve yours or weaken theirs.

Generally, if your BATNA is strong, disclose it. If weak, hide it.

3 Key things to focus on in a negotiation.

  • Learn their BATNA
  • Learn your BATNA
  • Improve your BATNA

An AOL Exec once said:

Never make a deal without talking to multiple people.

If your BATNA is weak, can a coalition strengthen it?

Getting To Know The Other Side and Cross-Cultural Communications

Understand that some cultures will want to get to know you and will not get right to the point. Don’t get frustrated. Embrace it and use it to get to know more about the other side.

Avoid your favorite topic. You’ll talk too much.

Ask a lot of questions. People love to talk about themselves. Listening is crucial. Clarify with “So you think that…” or “So what you’re saying is…” A conversation can go on forever with some people with those kinds of questions.

Traps: A Checklist

Below are traps you should not fall for:

  • Assuming a fixed pie
  • Anchoring
  • Overconfidence: It is great for motivation, but only after the decision has been made. It is bad in decision making. Test yourself for confirmation bias.
  • Framing
  • Availability Bias
  • Escalation: Competitive arousal occurs when there is intense rivalry, time pressure, and events are in the spotlight. Minimize by: Limit the role of the intense person, spread responsibility, and manage time better.
  • Reciprocity, Contrast Principle, and the Big Picture: When things are presented in sequence vs in isolation (e.g. showing poor expensive houses before a good overpriced one). Big Picture: Don’t get lost in the details.