What is Transactional Negotiation?
A transactional negotiation is one in which two or more parties attempt to find common ground on a deal to trade something of value, whether a tangible item or an idea.
People often think that transactional negotiation strategies require adversarial bargaining, such as making tough demands, threats, or bluffs. But in fact, the most effective bargaining strategies do not require you to sacrifice your integrity or resort to dirty tricks. Rather, they require you to set aside plenty of time before your negotiation to engage in clear-eyed preparation.
When you’re approaching a transactional negotiation, in addition to determining your own best alternative to a negotiated agreement, or BATNA, and reservation value, it is also important to try to estimate the other party’s BATNA and reservation point. When you do so, you can estimate the zone of possible agreement, or ZOPA—the range of deals that both parties would accept.
For example, suppose your neighborhood electronics store is selling the TV you want for about $1,100 and Amazon.com is selling the same TV for $900 as part of an electronics sale that will end the next day. Buying from Amazon.com becomes your BATNA in your negotiation at the electronics store.
As for your reservation price, you might decide that it’s $975, or $75 above Amazon.com’s price, for the added benefit of taking the TV home that day and not having to worry about shipping it back if you don’t like it.
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The following items are tagged transactional negotiation: