bargaining

Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement. Bargaining is an alternative pricing strategy to fixed prices. Optimally, if it costs the retailer nothing to engage and allow bargaining, he can divine the buyer’s willingness to spend. It allows for capturing more consumer surplus as it allows price discrimination, a process whereby a seller can charge a higher price to one buyer who is more eager (by being richer or more desperate). Haggling has largely disappeared in parts of the world where the cost to haggle exceeds the gain to retailers for most common retail items. However, for expensive goods sold to uninformed buyers such as automobiles, bargaining can remain commonplace.

The following items are tagged bargaining.

10 Hard Bargaining Tactics

Posted by & filed under BATNA.

Don’t be caught unprepared by hard bargainers, warn Mnookin, Peppet, and Tulumello in Beyond Winning. Here is their Top 10 list of common tactics.

Advanced Negotiation Master Class

Posted by & filed under Advanced Negotiation Master Class.

In the mid-1990s, a young JD/MBA student at Harvard was writing a case study about a railroad deal that was ongoing at the time. Somewhat to his surprise, he landed an interview with Bruce Wasserstein, the renowned dealmaker who had pioneered the hostile takeover, and who was a consultant in the railroad negotiations.

It was a fascinating conversation, the student remembers.

“I began to recognize that sophisticated dealmakers play the game at a different level – like a chess game instead of trying to scream and yell louder than others in the room.

“Rather than a frontal assault, sophisticated dealmakers engage in a carefully thought-through sequencing strategy: Get all the pieces lined up, to the point where when you go in the room, it’s basically a done deal.”

Like many of us, this student was hooked by the sweet art of negotiation … and he went on to become a world-renowned dealmaker, instrumental in megadeals such as Oracle’s $10.3 billion hostile takeover bid for PeopleSoft, Cox Enterprises’ $8.9 billion freeze-out of minority shareholders in Cox Communications, the $6.6 billion leveraged buyout of Toys “R” Us, and Exelon’s $8.0 billion hostile takeover bid for NRG.

Metaphorical Negotiation

Posted by & filed under Negotiation Skills.

Negotiators talk about building agreement, bluffing the opposition, and volleying offers back and forth. According to mediator Thomas Smith, careful attention to such metaphors can reveal deeper meaning beneath the explicit words that people use, notably regarding how they view the negotiation process and their relationship to one another.

Taking Alternative Dispute Resolution (ADR) Too Far

Posted by & filed under Mediation.

More and more companies are inserting alternative dispute resolution (ADR) clauses in their contracts with customers and vendors, and even in agreements with their own employees. ADR processes such as mediation and arbitration can be beneficial for all concerned if they help avoid the cost, delay, and uncertainty of going to court. Mediation, in particular, may offer creative solutions, protection of confidentiality, and preservation of important relationships.

Negotiation and Leadership: Dealing with Difficult People and Problems

Posted by & filed under Executive Education Seminars (3 Day Courses), Executive Training.

Our April seminar is currently sold out. To be added to the waiting list, please email pon@law.harvard.edu or call 1-800-391-8629.

This course examines core decision-making challenges, analyzes complex negotiation scenarios, and provides a range of competitive and cooperative negotiation strategies. Whether you’re an experienced executive or and up-and-coming manager – working in the private or public sector – this program will help you shape important deals, negotiate in uncertain environments, improve working relationships, claim (and create) more value, and resolve seemingly intractable disputes. In short, this three-day executive education program will prepare you to achieve better outcomes at the table, every single time.

Self-Analysis and Negotiation

Posted by & filed under Negotiation Skills.

“Separate the people from the problem,” advises the best-selling negotiation text Getting to Yes. That’s certainly good counsel when tempers flare and bargaining descends into ego battles, but it’s a mistake to ignore the psychological crosscurrents in negotiation. Unless they are addressed, a deal may never be reached.

Enhancing Your Deal in Business Negotiations

Posted by & filed under Sales Negotiations.

Not all contracts are created equal. Some maximize joint through creative trades, while others are barely satisfactory. Strategic wariness causes many people to leave untapped value on the bargaining table. Of course, agreements based on incomplete and distorted information aren’t likely to be efficient.