Bargaining Techniques

What is a synonym for BATNA?

Which key negotiation term best describes the threshold at which you would leave the table?

The buyer’s reservation price is 1500. The seller’s reservation price is 1000. The settlement price is 1100. What is the bargaining surplus?

When should you make the first offer in a negotiation?

Your friend is about to enter her first negotiation. She is startled by two conflicting pieces of advice she received. One person told her not to let the other party talk too much during the negotiation. Another person told her that she should listen more than she should speak. Based on what we discussed in the course, what would you recommend her?

How do you determine your reservation price as a buyer for a piece of land?

Dennis Brösel works for SteelNord GmbH. The company is about to purchase a new production machine for casting molds to increase its production capacity. Dennis Brösel was commissioned to sell the old machine.

There is no second-hand market for this type of machine, as it is usually used until the end of its service life. It is therefore difficult to determine an appropriate value for the used machine. If the old machine were given in payment when the new one was purchased, SteelNord would be credited with €40,000.

But Dennis first wants to talk to Südstahl GmbH about selling the old machine. SteelNord has already made frequent deals with Südstahl and left a very positive impression. The negotiation process and the handling of the handover were always very uncomplicated.

Andre Castlehard works for Südstahl and is supposed to negotiate the possible purchase of the production machine from SteelNord GmbH. The request from SteelNord GmbH could not have come at a better time, because Südstahl temporarily needs a production machine of the same type that SteelNord is currently selling. In 2 years from now, Südstahl will switch to DIN 1602 and therefore will have to buy a completely new production machine. However, buying a DIN 1602 compatible machine right now is not desired. A used machine appears to be the ideal solution since a new machine could not be used until the end of its service life (due to the switch to DIN 1602 in 2 years).

A new machine would cost €800,000 and could probably be given in payment to the manufacturer for €100,000 when switching to DIN 1602 and purchasing a new machine. Alternatively, Südstahl could also rent a production machine. The cost for a rented machine is 0.75€ per piece produced. Südstahl plans to produce 1 million units until the switch to DIN 1602.

After Südstahl engineers have once again confirmed the technical compatibility of the SteelNord machine, Andre and Dennis meet to discuss the possible sale.

Which of the following statements accurately characterize the ZOPA? Only one option is correct.

You are looking to sell your grandmother's old sewing machine. It is a true rarity, however it is currently broken because of a minor flaw. The cost of repair is estimated at € 80. The machine was purchased at a price of DM 300, corresponding to approximately € 200 in today’s value. Additionally, you spent approximately € 100 for repairs in the past. You happen to know a merchant offering € 20 for your unrepaired machine. In order to speed up the sale, you also list the machine online on a specialized marketplace for sewing machines. The final price is determined by means of an auction, the seller is only required to set an initial price. On that website, you also find offers for comparable, working machines at the prices of € 140, € 160 and € 180.

What is the ZOPA derived from the buyer's and the seller's BATNAs? Which of the following statement is the most accurate? Only one option is correct.