Distributive bargaining, also known as positional bargaining, zero-sum negotiation, competitive negotiation or negotiation win-lose, is a type or style of negotiation in which parties compete for the distribution of a fixed amount of value.
At the end of a purely distributive bargaining, which a party has won the other has lost. The final points keep adding zero as has been previously created value, unlike what happens in an integrative negotiation.
Distributive bargaining usually occurs in negotiations based on the sale of products where all that matters is price, for example in the sale of an automobile or real estate.
The purely distributive bargaining is usually an aggressive person, ruthless, stubborn, cunning, deceitful, self-centered and, above all, manipulative.
Before seeing the different strategies and tactics that can be used in a distributive negotiation, you need to know some important characteristic of this type or style of negotiation:
Bargaining power: benefits that you have to win a negotiation. Is basically given by the alternatives that you have a negotiation, for example, buyers today usually have more power than sellers, as they have more options to choose a product.
Perception: what one side thinks the other. In a distributive bargaining is not so much what one has, but what the other party thinks you have.
Alternatives: alternatives that you have a negotiation, for example, if you have a single client than the client that is negotiating, only have an alternative. The more options you have, will have greater bargaining power.
BATNA (best alternative to a Negotiated Agreement) is a better alternative to a negotiation (the alternative that one would take in case of not reaching an agreement). Before any negotiation, we must determine our BATNA and thus know when no agreement is better and retire (when possible agreement less favorable than our BATNA), for example, if we calculate that we can charge a client 1000, that amount will be our BATNA when negotiating with a second client, in this case, our goal is to reach an agreement where we pay 1000 or more and preferably, should offer a lower figure, we know that it is preferable to a non- agreement and seek the first customer.
Some peculiarities of BATNA is dynamic, ie constantly changing, and it is psychological, ie based on a personal perspective, which tends to be subjective (eg, a seller might consider that his product is worth much more than actually worth).
Backup point: The point that sets the lower limit of a negotiation. Is the minimum (or maximum) that you are willing to accept. The backup point adrift of BATNA though not always coincide (eg, when to buy a place, not only consider the price of other similar facility, but also its location.) Before any negotiation, we must determine our point of reservation and, thus, how much is the minimum (or maximum) that we should accept.
Zone of possible agreement: range within which you can close a deal. It is located located between the reservation points of the two parties, for example, if a buyer of a product sets its reserve price in 3000 (the most you would pay), and a seller of the product sets its reserve price in 2500 (least you could accept), the zone of possible agreement between the two sides would be located between 2500 and 3000.
Distributive bargaining strategies
The distributive bargaining strategies are aimed at shaping the perception of the counterpart on the limits of the zone of possible agreement, looking to the other party change its point of reservation to do so back, and think that ours is closer than their own it really is.
For that, thereby, once shaped the perception of the counterparty to the limits of the zone of possible agreement, it is easier to influence their perception of the solution, and thus achieve the ultimate goal, which is that The agreement ends near its reservation or, if possible, in himself.
Therefore, the distributive bargaining strategies basically consist of:
Do not reveal proprietary information, not reveal, conceal or distort information as one’s own motivations, needs and interests, your own BATNA and reservation point, etc. For this purpose, information is distorted, half-truths are told, shut up relevant information, it answers questions with other questions or incomplete responses, there is silence, it diverts attention to other issues, not shown much interest in something, dissimilar emotions or reactions, etc..
Counterparty information: get as much information counterpart, their true motivations, needs and interests, their alternatives, their BATNA and reservation point, your trading style, their way of trading (if it is aggressive or passive ), their strengths and weaknesses, etc.. For this purpose, are formal and informal questions, read between the lines, analyze their actions, interpreting nonverbal language, you get information from other sources, etc.
Distributive bargaining tactics
The tactics of distributive bargaining, unlike the strategies are specific actions, but have the same goal, which is to reach an agreement as close as possible to the point of booking the other hand, basically pre-shaping their perception of boundaries of the zone of possible agreement.
The following are some of the main tactics used in a distributive bargaining:
- To bid high, is to establish a high bid and thereby raise the other party “anchor” their perception of the range of possible agreement.
- Make excessive demands, is to make excessive demands, some of which might be irrelevant and would have the sole purpose of being traded for concessions.
- Make miniconcesiones: miniconcesiones is to make in order to give the impression of yielding enough.
- Setting limits: is to set limits in order to convince the other party that will not give more, for example, “it is impossible to accept, would imply an increase of 10% of our costs.”
- Previous: previous point is to support our arguments, for example, “we have always paid that amount, why we now call this one?”.
- Comparisons: comparisons is to achieve the same result as the preceding, for example, “I know of other similar premises were rented recently at least $ 1000.”
- Casting aspirations: it consists in shaping perceptions of the partner seeking to lower their aspirations, for example, if an employee wanted a raise, we could speak of the bad year we’ve had.
- Saw, is to seek to change the position of putting the other party against a second alternative, either real or imagined, for example, when a potential client to believe the owner of a local rent that had contact with other owners.
- Influence their subjective utilities, is to ensure that the other party lower the point of reservation to be influenced by the idea of getting benefits or subjective utilities, for example, if you want a seller to sell cheap we could promise to recommend to others.
- Capture core values, is to build something that we know that the other party wants or cares a lot and, for example, ask enough in return.
- Real or feigned anger, is to have rabies or pretend to demonstrate the seriousness of our position, to doubt the other party of its position, or to intimidate.
- Reduce the time, is rushing to the other party either directly or indirectly, in order that you tense, giddy and make a decision without the Mediterranean much.