Negotiation Terminology
Interests are the underlying concerns, needs, desires or fears behind a negotiator's position. By uncovering a party's interests, a negotiator may open up the negotiation for creative problem solving.
The target point is the point at which a negotiator would like to conclude negotiations. It is his optimistic goal for a specific issue.
The bargaining mix is the package of issues up for negotiation. Each item in the bargaining mix, can have its own starting, target and resistance point.
The point beyond which a negotiator is unwilling to settle is her resistance or reservation point.
The bargaining zone or range is the spread between the two parties resistance points.
Positive Bargaining Range. When a buyer's resistance point is above the seller's resistance point there is a positive bargaining range.
Negative Bargaining Range. When a seller's resistance point is above the buyer's resistance point.
The settlement zone consists of the points which overlap between the parties participating in a negotiation. If the bargaining ranges of two negotiators do not overlap, it is unlikely that a settlement will be obtained. settlement can be reached.
The Best Alternative to a Negotiated Agr eement (BATNA) is that solution that can be obtained by completing a different deal with a different party. At worst, a negotiator's BATNA would maintain the status quo (e.g., no deal so things remain as they are). It is one's walk away position. Knowing your BATNA gives you the power to walk away from any negotiation when the emerging deal is not very good.
Pareto Frontier is the range of outcomes in which the best possible as well as the most efficient deal can occur. It is reached when there is a win-win outcome, where nothing is left on the table, and where both parties to the agreement end up feeling like and are winners.
Efficiency is measured by comparing the amount of resources expended against the expected benefit. In multi party, multi issue negotiations, it is obviously very difficult to determine efficiency. If it makes the best use of the available resources and leaves as little a as possible on the table, an agreement is efficient.
