DB structure: Scenarios

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DB structure: Scenarios

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DB structure: Scenarios. Bargaining Zone: Scenario 1. The bargaining zone is the space between the buyer ’ s reservation price (BR) and the seller ’ s reservation price (SR) – that is, the zone of possible agreement. If BR < SR , then there is no zone of possible agreement. S R. B R. - PowerPoint PPT Presentation

Transcript of DB structure: Scenarios

Page 1: DB structure: Scenarios

DB structure: Scenarios

Page 2: DB structure: Scenarios

Bargaining Zone: Scenario 1

• The bargaining zone is the space between the buyer’s reservation price (BR) and the seller’s reservation price (SR) – that is, the zone of possible agreement.

• If BR < SR, then there is no zone of possible agreement.

BR SRNegative Bargaining

Zone

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Bargaining Zone: Scenario 2

• The bargaining zone is the space between the buyer’s reservation price (BR) and the seller’s reservation price (SR) – that is, the zone of possible agreement.

• If BR > SR, then a zone of possible agreement exists. The zone of agreement is from SR to BR.

SR BRPositive Bargaining

Zone

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Reminder: Distributive Negotiation Strategies

• Know your BATNA• Strengthen your BATNA whenever possible• Highlight the strength of your BATNA without providing specifics• Define your own reservation price• Do not reveal your reservation price• Define your aspiration level• Focus on your strengths; be realistic but optimistic• Research the other party’s BATNA/reservation price• Get more information during the negotiation• Make aggressive first offers whenever possible• Watch how you are making concessions• Make sure that concessions are reciprocated• Consider what commitment tactic to use• Try to include more issues!