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Reasonable, But Not Easy

Posted by admin VIP     3 Comment(s)    Add a Comment  comment-icon.png
05/22/2012 02:26 PM

Last time we spoke about making an extreme opening offer by making it soft and being willing to concede faster and farther than normal.  This entry will discuss reasonable offers.

Why waste time with a Reasonable Offer discussion.  Basic logic suggests that if its reasonable the other side should take it or the natural dance will end in a predictable agreement, right?  Reasonable = Easy, right?  Unfortunately, No.

Though a reasonable offer (one that is perceived to be close to or within the Zone of Agreement so as to establish a final agreement range) would appear to spur a quick resolution, there are strategies and consequences to be aware of.  For example, how do you communicate the offer as reasonable?  A reasonable glass half-full to you may seem like an insulting glass half-empty to the other party.

First, to indicate the offer is reasonable, you must demonstrate commitment.  To demonstrate commitment in an opening offer, the offer's communication will need to show that a large cost will be imposed by you (the offeree), on the offeror (the other party), if they move significantly from the opening offer.  Example: Betty offers Joe the candy bar for $5 and states that Marvin has already offered $2.50.  Further, to show commitment, only modest concessions should be made.  Joe counters with $3, Betty's modest concession is $4.95. 

Second, due to the very nature of how commitment is demonstrated in the offers communication and by modest concessions, hard bargaining is likely to come into play.  Demonstrating commitment  requires communicating limited flexibility.  To assert that idea, the offeree is trying to solidify their position through argument and modest concessions.  Likely the offeror may perceive that this commitment is hard bargaining and they will respond in kind (often called a tit-for-tat strategy).  The reasonable offer also affects the person's expectations: since the offer appears reasonable they think they can get more by expanding the range and offering outside the zone of agreement.  

So....what to do.  If you go Extreme, you are not sure if you will insult and destroy a possible deal.  If you go reasonable, you may look like a hard bargainer and garner a tit-for-tat response, making the negotiation more difficult than anticipated.  How can you decide?  Any thoughts?  Let us know by commenting.  

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May 23rd, 2012

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July 23rd, 2012

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Added by oppomilla
August 25th, 2012

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