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Distributive Bargaining - Coggle Diagram
Distributive Bargaining
I. Basic Concepts of Distributive Bargaining
Definition: Competitive / win‑lose negotiation; fixed & limited resources; one party’s gain equals the other’s loss
Core Elements
Target Point: Optimal expected settlement price
Resistance Point (Reservation Price): Bottom line for each party
Initial Offer: First bid in negotiation
Bargaining Range: Overlap area of two parties’ resistance points
Positive range: Reachable agreement
Negative range: Likely deadlock
BATNA (Best Alternative To a Negotiated Agreement): Best fallback option if no deal is reached, determines bargaining power
II. Four Key Tactical Tasks
Assess the other party: Target point, resistance point, cost of terminating negotiation
Indirect Assessment: Gather background info, market data & situation of the counterpart
Direct Assessment: Directly inquire and test the other party’s demands
Manage the other party’s impressions: Shape self‑image, hide critical private information
Modify the other party’s perceptions: Influence their judgment on your value & delay costs
Manipulate actual costs of delay or termination: Create time pressure & negotiation costs
III. Core Strategies & Tactics
Pre‑negotiation Preparation
Information Gathering: Counterpart’s demands, time constraints, decision‑makers, alternatives, core interests
Opening Stance
Opening Offer: Aggressive yet reasonable; anchor the bargaining zone; avoid extreme or overly conservative bids
Concession Strategy: Make slow concessions with decreasing magnitude; avoid one‑off large compromises
Concession Principles
Pace: Small‑scale & gradual concessions with declining range
Logic: Conditional concessions; exchange your concessions for the other party’s compromises
12 Guidelines for Making Concessions: Concede slowly, make small concessions, attach conditions, avoid easy compromise, etc.
Closing Tactics
Final Offers: Clarify no further concessions
Split the Difference: Compromise by splitting the gap between two bids
Provide Alternatives: Offer optional settlement plans
IV. Hardball Tactics & Countermeasures
Common Hardball Tactics
Extreme Opening Offers: Unreasonably aggressive initial bids
Bogey: Pretend to compromise on minor issues to gain core interests
Chicken: Make threats to force the other party to yield
Good Cop / Bad Cop: One negotiator applies pressure while the other acts moderately
Nibble: Request extra small benefits after reaching a deal
Countermeasures
Identify tactics, stay calm, and refuse emotional compromises
Stick to your own resistance point and strengthen your BATNA
Point out the other party’s tactics directly and reject unreasonable demands