Buying a House with Distributive Bargaining Skills

1223 WordsJul 12, 20185 Pages
Distributive bargaining is a very important negotiation skill. Used as the core of the core of an negotiation, distributive bargaining is defined as, “a negotiation method in which two parties strive to divide a fixed pool of resources, often money, each party trying to maximize its share of the distribution” (Michael R. Carrell, 2008). Within the distributive bargaining process, the two parties involved have to negotiate over a set of assets in which one person looses and the other gains. This is why Distributive bargaining is also called Zero-sum. Carroll explains that distributive bargaining is called a zero-sum process because one party looses whatever amount is gained by the other” (Michael R. Carrell, 2008). The dynamic of a…show more content…
Carrell, 2008). Reservation prices from a seller’s point of view is often based on sentimental value. Authors William Geotzmann and Liang Peng’s article, Review of Economics and Statistics, discusses how Housing prices are estimated in the presence of seller reservation prices. This article looks into the details behind reservation prices when it comes to items like art and homes. Reservation price is very important to the seller and shows the importance of the buyer’s need to prepare a reservation price in effort to remain focused on his or her’s home buying goals financially. Geotzmann and Peng describe how the sell of a home or art piece can be painful and influence the reservation price. According to the article, reservation prices might be based upon a seller’s deep-felt conviction about how painful it would be to part with a piece, or they might be based upon what the latest example of such work would go for” (William Goetzmann, 2006). The knowledge of the motivation behind the seller’s reservation price should serve as a caution for a buyer to prepare a reservation price that could be held firm against a sentimental seller. The next step in a distributive bargaining negotiation is the act of bracketing. Bracketing is used as a way to achieve the desired outcome in negotiations. Bracketing can be used in a win/win, win/lose, and as an countermeasure to win/loose negotiation. When buying a home bracketing should be used in the

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