The Negotiator Magazine

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IV. DISTRIBUTIVE STAGE

Near the conclusion of the Information Exchange, the focus changes from the other side back to our own sides. Negotiators stop asking the other party what it wants and begin to state what they must obtain or what they are willing to give the other side. At this point they enter the Distributive Stage. The Information Exchange involves value creation, as the parties try to determine what they have to divide up, while the Distributive Stage involves value claiming, as the parties try to obtain items for themselves. This is a highly competitive part of bargaining exchanges, with both sides seeking to advance their own interests. Individuals who naively ignore the competitive aspect of this stage are likely to lose to manipulative opponents who seek to maximize their own returns.

It is important for people to have firm goals and set bottom lines before they enter the Distributive Stage. They should have planned concession patterns they think will lead them to the results they desire. How do they visualize a series of position changes that will conclude with good deals for themselves? Should they make the first offer or try to induce the other side to do so? If business partners or close friends are negotiating over something with a defined and relatively narrow settlement range, going first can be an advantage. By beginning with an offer just inside the settlement range, the other side may consider the offer fair and accept the terms being offered.

In most other situations, it is usually beneficial to get the other side to make the first offer. If one or both parties have miscalculated the value of the deal to be negotiated, the side going first will disclose the mistake. The other side may be more generous than this side anticipated, and it can now take advantage of that situation. The second reason for getting the other side to go first concerns "bracketing." Once one side makes an initial offer, the other can start far enough away from that point to place its goal in the middle of the initial positions. Parties tend to move from their opening positions toward the center. By getting the other party to make the initial offer, this side can start with an offer that places its objective near the midpoint of their positions.

What tactics are parties likely to employ during the Distributive Stage to obtain the terms they desire? Patience and silence are two powerful tools. Many negotiators are talkative people who give away information and make unreciprocated concessions. When an opening offer is made, some negotiators look disappointed and say nothing. The offeror begins to feel uncomfortable, and makes another offer. The same tactic can be used following a concession by the other side. Most persons abhor silence, and if it continues for a minute or two they speak to fill the silent void. To counteract this weapon, negotiators should try to make offers and concessions in a succinct manner, followed by silence. If the other side doesn't respond, the offeror should say nothing. If the silent pause becomes excessive, the offeror can ask the other side if it is planning a response. Through such attitudinal bargaining the offeror can force the other party to participate and avoid bidding against itself through consecutive position changes.

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