ZOPA negotiations involve reconciling disparate sets of interests between parties in order to find an agreement, and the information key to creating this negotiated agreement is in determining the zone of possible agreement, or what can be achieved at the bargaining table.
Finding the zone of possible agreement in negotiations can be difficult, especially when you’re dealing with friends and family. We all know people who have “alligator arms.” When the restaurant check comes, they can’t manage to reach their wallets, or they quibble that they had the small tomato juice, and you had the large.
Negotiations With Your Closest Friends – How to Find the Zone of Possible Agreement
With our close friends, of course, the opposite tends to occur, with each person insisting on picking up the tab. Though motivated by mutual feelings of affection, these interactions can be awkward, even tense.
David Mandel, a scholar with Defence Research and Development Canada, recently conducted two experiments that tested how generosity affects negotiations among friends. Previous researchers had concluded that norms of fairness become more powerful between people with close ties. If that were the case, of course, friends would quickly agree on a fair price, and the deal would be done.
The situation is more complicated, Mandel found. Specifically, in his experiments, most sellers of a music CD bent over backwards to offer a generous price to their friends. In fact, the sellers’ asking prices were significantly lower than what their friends were willing to offer. Thus, these sellers assumed the curious stance of wanting to talk buyers down in price. (This finding is a reversal of the classic endowment effect, in which the owner of an object tends to value it more highly than others do.) Curiously, in Mandel’s studies, generosity toward friends proved to be something of a one-way street: when negotiating to buy from friends, participants were not motivated to overpay.
ZOPA Negotiation: Framing and Setting Expectations When Bargaining with Friends
In dealings with friends, Mandel concludes, our attitudes and behavior vary depending on how the situation is framed and what “script” is evoked. The impulse toward generosity seems most powerful in exchanges in which “I am giving this to you.” When an allocation between two people is involved, however, a norm of fairness may dominate and suggest a 50-50 split. As a practical matter, that’s a graceful way of concluding a friendly dinner. And when friends have much more at stake—say, when one is selling a car or a house to the other—it’s wise to agree first on the appropriate process and principles to follow.
How have you found the zone of possible agreement with friends in the past? Share your stories with us in the comments.
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Adapted from “Dealing with Friends,” first published in the Negotiation newsletter.
Originally published in 2010.