Question 1

Various names have been used to describe the amount that must be exceeded in the bargaining interaction in order to obtain a profit. Several of the "names" are listed below. However, one is incorrect. Which one?

Accepted Answer

The correct terms used in bargaining interactions to describe the amount that must be exceeded to obtain a profit include maximum concession point, breakeven point, zero-profit point, and minimum disposition. "Net-sum point" is not a standard term used in this context.

Question 2

strategy of _________ reciprocating both the frequency and magnitude of the other bargainer's concessions was found to be more effective in obtaining concessions from the other bargainer than strategies involving _______ reciprocation.

Accepted Answer

The strategy of always reciprocating both the frequency and magnitude of the other bargainer's concessions (matching the other's concessions in both how often and how much they concede) is more effective than strategies involving less reciprocation (not matching as often or as much), as it builds trust and cooperation.

Question 3

The _____ solution assumes individual utilities are not comparable. It is of a normative nature and assumes away such features as bargaining ability.

Accepted Answer

The Nash solution, named after John Nash, assumes individual utilities are not comparable and is normative in nature, abstracting from features like bargaining ability.

Question 4

bargainer's resistance to making concessions is negatively correlated to both the time required to make a further concession and the probability of withdrawing from the negotiations.

Accepted Answer

Bargainer's resistance to making concessions is positively correlated to both the time required to make a further concession and the probability of withdrawing from the negotiations. Higher resistance typically leads to longer times before making another concession and increases the likelihood of withdrawing from negotiations.

Question 5

The unit price in a ________ optimal contract can vary anywhere between the two limiting prices, the higher of which would give all the joint profit to the manufacturer and the lower of which would give all the joint profit to the distributor. The tendency in this situation is to split the joint profit evenly between the buyer and the seller.

Accepted Answer

The concept described in the statement is known as Pareto optimal contract, where the unit price can vary between two limiting prices and the joint profit is split evenly between the buyer and the seller. The given statement does not mention any connection with any of the other options, such as Palmer, Martin, or Nash. Therefore, option C (Pareto) is the best choice.

Question 6

The subset of _______ optimal joint strategies offering each player at least his/her security level is called the negotiation set (contract curve).

Accepted Answer

The subset of Pareto optimal joint strategies offering each player at least his/her security level is called the negotiation set or contract curve. The Pareto optimal solutions satisfy the criterion of allocative efficiency, which states that resources should be allocated in such a way that no one can be made better off without making someone else worse off. Therefore, the negotiation set represents the optimal choices for the players in terms of both efficiency and fairness.

Question 7

onceding only in response to a strike threat by the other side gives the impression that one is strong, while sometimes reciprocating a concession gives the impression that one is tough. This leads to the general conclusion that every agreement ought to lie somewhere between the two starting points of the bargainers.

Accepted Answer

Conceding only in response to a strike threat can actually give the impression of weakness, as it suggests one is only willing to negotiate under pressure. Reciprocating a concession can show a willingness to compromise and negotiate, which is often seen as a strength in bargaining situations. The general conclusion that every agreement should lie between the starting points of the bargainers oversimplifies the complexity of negotiations, where multiple factors influence the outcome beyond initial positions.

Question 8

In general, __________ theory can help predict the approximate outcome of bargaining situations, but _____________ conditions will cause the true solution to vary around the predicted outcome point.

Accepted Answer

Economic theory can help predict outcomes in bargaining, but human psychology can influence decision making and cause variation from the predicted outcome. Therefore, economic and psychological factors should be considered.

Question 9

The level of resistance also is assumed to be related to the minimum necessary share. As a bargainer concedes toward his/her minimum necessary share, (his/her) resistance should increase. It also can be predicted that for a given offer, the lower the minimum necessary share, the greater the resistance.

Accepted Answer

The statement is contradictory. As a bargainer concedes toward their minimum necessary share, their resistance should decrease, not increase. Additionally, for a given offer, the lower the minimum necessary share, the lower the resistance, not greater.

Question 10

Giving a bargaining opponent the impression that tough bargaining is because of one's payoff system and that one is firm but fair is the _________ strategy.

Accepted Answer

Giving the impression that one's tough bargaining is due to a payoff system and being firm but fair is known as the "principled" strategy. This strategy can result in a win-win situation, as both parties can come to an agreement that satisfies their interests. It is often considered the best strategy because it focuses on finding mutual gain rather than maximizing individual gain at the expense of the other party.

Question 11

The best strategy is to give the other side the impression that one is _________.

Accepted Answer

The best strategy is to have a balanced approach where one appears tough but fair. This approach can help establish credibility and build trust with the other side, leading to a better chance of achieving mutually beneficial outcomes. Being too tough or rigid can lead to unnecessary conflicts, and being too easily pushed around can result in losing out on potential opportunities.

Question 12

The _______ solution to the bargaining problem suggests a method of fair division. It suggests a way of dividing joint profits that is "fair" in the sense that a referee or judge "should" follow if called upon to settle a division between two corporations.

Accepted Answer

The Nash solution, named after Nobel laureate John Nash, is a mathematical concept that suggests a fair division of joint profits. It proposes that the solution to the bargaining problem is a point where no individual can receive a larger payoff by unilaterally deviating from the agreed-upon allocation. This creates a stable and equitable outcome that is considered fair. The other answer choices (Martin, Noah, Palmer, and Parmer) do not refer to any known solutions to the bargaining problem.

Question 13

Of the items listed below which is the factor that includes the specific actions of the bargainer during bargaining. For example: How extreme is his/her opening? Does he/she concede frequently or infrequently?

Accepted Answer

Bargaining strategy refers to the specific actions taken by the bargainer during negotiation, such as their opening offer, concession patterns, and overall approach to the negotiation process. Planning, organizing, and operating are all important aspects of negotiation preparation and implementation, but they do not specifically address the actions of the bargainer during bargaining itself.

Question 14

The actual payoff system that bargainers face in an interaction must certainly be a major determinant of bargaining behavior. Several different factors related to the payoff system have been studied.The amount that has to be exceeded if the bargainer is to realize a profit.The cost of time spent in bargaining.The cost of failure to reach agreement.dded benefits achieved by obtaining a specific threshold value.Qualitative or quantitative variations in the general level of payoff values.Whether payoffs are based solely on one's own profit schedule or are based, in whole or in part, on the degree to which one's profits exceed those of others.Whether conflict is constant-sum or varying-sum.Penalties the bargaining opponent (or perhaps a third party) is likely to impose for failure to yield.

Accepted Answer

The statement accurately reflects the various factors related to the payoff system that can influence bargaining behavior.

Question 15

combined _____________ approach will help provide the truest solution and best approach to understanding bargaining and negotiation situations and their outcomes.

Accepted Answer

Bargaining and negotiation situations involve both economic and psychological factors, such as individual preferences, values, and perceptions. Therefore, combining economic and psychological approaches can provide a better understanding of the behavior and outcomes of bargaining and negotiation. For example, economic theories can explain how individuals make decisions based on their financial incentives, while psychological theories can explain how emotions, personality traits, and social norms influence their behavior. Thus, combining these two approaches can help researchers and practitioners develop more effective negotiation strategies and policies.

Question 16

Time pressure in psychological experiments has been exerted in various ways:
High or low probability that the present round of offers would be the last.Warning that time was almost up.Number of offers remaining before penalties for additional offers.ost of each of the trial offers.

Accepted Answer

Time pressure has indeed been exerted in various ways in psychological experiments, including those listed: high or low probability that the present round of offers would be the last, warning that time was almost up, number of offers remaining before penalties for additional offers, and cost of each of the trial offers.

Question 17

When bargaining is moving smoothly, toughness is counterproductive. Excessive toughness in bargaining could be a particularly bad strategy in buyer-seller interactions where future interactions were expected. If one party always chose a very tough stance, the other party will develop a similar approach to the bargaining interaction. This could result in lower transaction costs, good future agreements, and, where possible, continuance of the bargaining opponent.

Accepted Answer

Excessive toughness in bargaining, especially in ongoing buyer-seller relationships, can lead to increased conflict, mistrust, and potentially higher transaction costs, making future agreements more difficult and possibly jeopardizing the continuation of the relationship.

Question 18

The most important ____________ for a seller is to submit the most responsive Request for Proposal (RFP) or Request for Quote (RFQ).

Accepted Answer

The most important thing for a seller is to submit the most responsive RFP or RFQ. This requires careful planning and organizing of the information and pricing to be submitted. Therefore, option E, planning activity, is the best choice. The other options such as bargaining tactic, negotiating step, or strategic step may also play a role, but they are not the primary focus.

Question 19

_________ originally took the position that his model constituted a positive theory and that it would describe actual bargaining outcomes, but it is now much more common to give a normative interpretation to the analysis and to treat the ______ solution as a "desirable" outcome of the bargaining process.

Accepted Answer

The statement is referring to the Nash bargaining solution, which is named after John Nash. Option B is the only one that mentions Nash.

Question 20

Usually a tougher bargaining-one using a more extreme opening position, fewer concessions, and/or smaller concessions-can obtain a more favorable fail agreement. There appear to be exceptions to such a conclusion, however. Never making a concession may be responded to by the other side in a similar fashion, leading to little or no convergence in the bargaining interaction. When time allotted to bargaining (or that which is left) is very short and when not reaching an agreement is clearly disadvantageous, toughness may be a poor strategy because it could result in no agreement.

Accepted Answer

While a tougher bargaining strategy can often lead to a more favorable agreement, there are exceptions. If neither side makes concessions, there may be no convergence in the negotiation. Additionally, when time is short and not reaching an agreement is disadvantageous, a tough strategy may not be the best approach.

Quiz 14: Bargaining and Negotiations

Various names have been used to describe the amount that must be exceeded in the bargaining interaction in order to obtain a profit. Several of the "names" are listed below. However, one is incorrect. Which one?

strategy of ___ reciprocating both the frequency and magnitude of the other bargainer's concessions was found to be more effective in obtaining concessions from the other bargainer than strategies involving _ reciprocation.

The _____ solution assumes individual utilities are not comparable. It is of a normative nature and assumes away such features as bargaining ability.

bargainer's resistance to making concessions is negatively correlated to both the time required to make a further concession and the probability of withdrawing from the negotiations.

The subset of _______ optimal joint strategies offering each player at least his/her security level is called the negotiation set (contract curve) .

In general, theory can help predict the approximate outcome of bargaining situations, but ___ conditions will cause the true solution to vary around the predicted outcome point.

Giving a bargaining opponent the impression that tough bargaining is because of one's payoff system and that one is firm but fair is the _________ strategy.

The best strategy is to give the other side the impression that one is _________.

The _______ solution to the bargaining problem suggests a method of fair division. It suggests a way of dividing joint profits that is "fair" in the sense that a referee or judge "should" follow if called upon to settle a division between two corporations.

Of the items listed below which is the factor that includes the specific actions of the bargainer during bargaining. For example: How extreme is his/her opening? Does he/she concede frequently or infrequently?

combined _____________ approach will help provide the truest solution and best approach to understanding bargaining and negotiation situations and their outcomes.

Time pressure in psychological experiments has been exerted in various ways: High or low probability that the present round of offers would be the last.Warning that time was almost up.Number of offers remaining before penalties for additional offers.ost of each of the trial offers.

The most important ____________ for a seller is to submit the most responsive Request for Proposal (RFP) or Request for Quote (RFQ) .

___ originally took the position that his model constituted a positive theory and that it would describe actual bargaining outcomes, but it is now much more common to give a normative interpretation to the analysis and to treat the solution as a "desirable" outcome of the bargaining process.