January 9: Nature of Negotiation

The first negotiations class was very interesting. When Prof. Wertheim had some students participate in the nickel auction, my thoughts on the exercise completely changed. My initial thought about the exercise were based on some theories I had learned in other business and economics courses. I made the assumption that the other person would always outbid the previous person until they had no financial incentive to do so. I figured that the best way to do well would be to put the initial bid at 4 cents so that the other person had no incentive to bid higher. During the discussion I realized that I should not have assumed that the other person was always going to outbid the other. It was a little difficult for me to accept this at first. The professor explained that when two people are working something out there should never be money left on the table. That was when I really got a different perspective on the negotiation process. I realized that when you are negotiating you are working in your own best interests, but you are trying to come to an agreement that is acceptable to both sides. The point of the negotiation is to avoid having the other person just outbid you every time so that nobody makes any money.
The Elmtree negotiation was the next case that we went through as a class. This case seemed pretty straightforward. I found the process of determining your walkaway price, estimating the other party's walkaway price, and estimating a zone of possible agreement to be very logical and I can see that it is a very useful thing to do. I also found the discussion on whether to make the first offer or not to be interesting. I look forward to developing my negotiation skills in this class and cant wait to see what is in store for the rest of the semester.