Deck 14: Bargaining and Negotiations

Question 1

____________ occurs between all forms of human groupings including individuals, groups, organizations, and countries.

A) Communicating
B) Trading
C) Bargaining
D) Swapping
E) Organizing

Answer 1

C

Question 2

Two-party bargaining can be divided into two types: _________ and ___________.

A) standard / routine
B) fail safe / goal oriented
C) distributive / integrative
D) win / lose
E) routine / fail safe

Answer 2

C

Question 3

________________ exists where there are areas of mutual concern and complementary interests. The situation is a varying-sum schedule such that, by working together, both parties can increase the total profits available to be divided between them.

A) Integrative bargaining
B) Routine bargaining
C) Distributive bargaining
D) Net-sum bargaining
E) Net-zero bargaining

Answer 3

A

Question 4

The ____________ needs to determine how he/she, as a decision maker, ought to behave in light of his/her analysis of how his/her opponent might behave.

A) organizer
B) bargainer
C) representative
D) executive
E) agent

Question 5

bargaining situation can then be defined as an interaction where parties with certain disagreements confer and exchange ideas about a possible solution until a compromise is reached or the bargaining is terminated. This is referred to as ______________.

A) standard bargaining
B) implicit bargaining
C) routine bargaining
D) explicit bargaining
E) fail safe bargaining

Question 6

ccording to the textbook, three additional conditions also must exist in order for bargaining to occur. Which of the following is not one of those conditions?

A) The provisional offers must determine the outcome of the situation, i.e., one party must lose and the other party must win.
B) Mutual compromise must be possible. If one of the parties must choose between total victory and complete loss, no bargaining occurs. Bargaining situations require intermediate solutions for the parties involved.
C) The possibility must exist for provisional offers to be made by those involved in the situation.
D) The provisional offers must not determine the outcome of the situation until the terms are accepted by all parties.

Question 7

The parties in __________ bargaining are in basic conflict and competition because of a clash of goals: the more one party gets, the less the other gets.

A) standard
B) routine
C) distributive
D) fail safe
E) common

Question 8

One of the factors refers to the social relationship existing between the bargainers. Examples are degree of friendship or differences in status or power. Which of the following factors is this referring to?

A) General bargaining predispositions
B) Social relationship with significant others
C) Social relationship with the opponent
D) Payoff system
E) Situational factors

Question 9

ll of the following, with one exception, are the minimum necessary variables for a model of the overall bargaining process (which) include both the decision maker's and the opponent's ______________. Which one is the exception?

A) initial offers
B) desired outcomes
C) rate of concession
D) the final maximum offer
E) maximum level of concession (zero profit level)

Question 10

The word ___________ is derived from Latin and in civil law means "trading on deliberations leading to an agreement."

A) bargaining
B) deliberating
C) discussion
D) negotiation
E) considering

Question 11

The findings by psychologists can be categorized under six areas, each representing a major factor assumed to affect bargaining. Listed below are five of the six areas. However, one is incorrect. Which one?

A) General bargaining predispositions
B) Social relationship with the opponent
C) Situational factors
D) Bargaining system
E) Social relationship with significant others

Question 12

Payoffs result from various aspects of the negotiated agreement. For example, certain terms may yield a specific amount of profit, or there may be a bonus for attaining a specified agreement, or the time spent in bargaining may involve certain costs. This is referring to __________.

A) Social relationships
B) Compensation systems
C) Bargaining systems
D) Bargaining strategies
E) Payoff system

Question 13

The condition under which ____________ takes place is when two or more parties have divergent interests or goals and communication between the parties is possible.

A) communicating
B) swapping
C) organizing
D) trading
E) bargaining

Question 14

conomists, on the other hand, have seen ____________ bargaining as a problem that only involves two parties dividing fixed resources with no opportunity for any outside influence of third parties.

A) net-sum
B) zero-sum
C) distributive
D) routine
E) standard

Question 15

In the ________ bargaining situation, the profits (and/or losses) of the respective bargainers always sum to the same fixed amount. The term _________ stands for the fact that what one bargainer gains, the other losses and the gains (and/or losses) net out to be _______.

A) net-sum / net-sum / one
B) zero-sum / zero-sum / zero
C) routine-sum / routine-sum / two
D) zero-sum / zero-sum / ten
E) net-sum / net-sum / zero

Question 16

Individual differences in bargaining predispositions may affect bargaining behavior. This is referred to as ________________.

A) Standard bargaining predispositions
B) Routine bargaining predispositions
C) Individualized bargaining predispositions
D) Cooperative bargaining predispositions
E) General bargaining predispositions

Question 17

In a __________ schedule bargaining situation, the profits (and/or losses) of the respective bargainers, when added together, need not always equal the same fixed amount.

A) standard-sum
B) routine-sum
C) fixed-sum
D) floating-sum
E) varying-sum

Question 18

This factor refers to the relationships of the bargainers to significant others not participating directly in the bargaining. Which of the following is this statement referring to?

A) Social relationship with the opponent
B) Social relationship with significant others
C) Social payoff systems
D) Social relationships with management
E) Social relationships with various parties

Question 19

iscussion, understanding, and agreements are vital to ___________ bargaining.

A) distributive
B) common
C) standard
D) routine
E) fail safe

Question 20

The physical and social setting of the bargaining may have an effect. Is the bargaining being conducted in the home territory of one of the bargainers or on neutral ground? What, if any, is the seating arrangement? Which of the factors is this statement referring to?

A) Situational factors
B) Payoff system
C) Physical systems
D) Forum factors
E) Physical and maintenance factors

Question 21

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?

A) maximum concession point
B) breakeven point
C) net-sum point
D) zero-profit point
E) minimum disposition

Question 22

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.

A) occasionally / frequent
B) always / less
C) frequently / less
D) sometimes / full
E) occasionally / full

Question 23

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

A) Nash
B) Noah
C) Parmer
D) Martin
E) Palmer

Question 24

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.

Question 25

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.

A) Parmer
B) Martín
C) Pareto
D) Palmer
E) Nash

Question 26

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

A) Parmer
B) Palmer
C) Nash
D) Martín
E) Pareto

Question 27

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.

Question 28

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.

A) statistical / physical
B) economic / psychological
C) management / economic
D) economic / financial
E) financial / psychological

Question 29

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.

Question 30

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.

A) worst
B) poorest
C) best
D) fairest
E) weakest

Question 31

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

A) tough
B) fair
C) rigid
D) tough but fair
E) not easily pushed around

Question 32

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.

A) Martin
B) Noah
C) Palmer
D) Parmer
E) Nash

Question 33

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?

A) Negotiating
B) Planning
C) Organizing
D) Operating
E) Bargaining strategy

Question 34

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.

Question 35

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

A) economic/psychology
B) statistical/physical
C) economic/financial
D) financial/psychological
E) management/economic

Question 36

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.

Question 37

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.

Question 38

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

A) bargaining tactic
B) organizing activity
C) strategic step
D) negotiating step
E) planning activity

Question 39

_________ 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.

A) Parmer / Parmer
B) Nash / Nash
C) Martin / Martin
D) Noah / Noah
E) Palmer / Palmer

Question 40

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.

Question 41

It is not enough to set as an objective to negotiate a percentage improvement from the seller's original price proposal. The buyer should never reveal (his/her) objectives to the seller. The negotiation's objectives should also use a data driven approach to determine minimum and maximum pricing strategies.

Question 42

The seller's bargaining strengths depend on the following:
The sellers current capacity
The probability of being the successful bidder
The sellers deadline
The status of the seller

Question 43

The model [the buyer-seller interactions exchange model] is built on the relationships inherent in a bargaining situation and illustrates at least _______ major types of relations that can be affected by any bargaining interaction.

A) four
B) five
C) six
D) seven
E) eight

Question 44

The procedure for a formal negotiation [a short version] is given below:
Select teametermine objectives
Prepareetermine bargaining strengthevelop a plan
Set strategyetermine tacticsollow-up

Question 45

Once the buyer has a complete understanding of what he/she is buying, a thorough price/cost analysis should be performed using the seller's cost data. The buyer cannot be an effective negotiator without the price analysis. The only reasonable way to reduce the price proposal is convincing the seller through data analysis. However, at times it is reasonable to ask for price reductions without a price/cost analysis.

Question 46

The buyer's bargaining strengths are:
The number of bidders
The urgency of the buyer needs.The length of time before agreement
The status of the buyer

Question 47

There are standard procedures for processing RFPs. After receipt of the initial proposals, the proposals should be screened for responsiveness in terms of ________.

A) technical quality and managerial capability
B) financial stability
C) experience on similar projects and other relevant criteria
D) all of the above
E) "B" and "C" only

Question 48

The buyer must be thoroughly prepared for each and every negotiation. Data collection is the first step in the preparation process. The next step involves setting the time and place of the negotiations and then identifying the negotiation team members.