Distributive bargaining

Definition

Distributive bargaining is a negotiation strategy in which parties aim to divide a fixed resource, often referred to as a 'pie'. This approach is competitive and typically involves one party's gain being another party's loss, making it a zero-sum game. Understanding the dynamics of distributive bargaining is essential for effective negotiation tactics, especially in international contexts where interests can sharply contrast.

5 Must Know Facts For Your Next Test

1. Distributive bargaining is often employed in situations where resources are limited and parties have opposing interests, making it crucial for negotiators to be strategic.
2. In this type of bargaining, each party will typically start with an initial offer that is more favorable to them, expecting to make concessions as negotiations progress.
3. Effective distributive bargaining requires good preparation, including understanding one's own goals and the likely goals of the other party.
4. Tactics such as anchoring, where one party sets a reference point for negotiations, are commonly used in distributive bargaining to influence the outcome.
5. The outcome of distributive bargaining can set the tone for future interactions between parties, influencing relationships and potential collaboration.

Review Questions

• How does distributive bargaining differ from integrative bargaining in terms of strategy and outcomes?
  • Distributive bargaining is characterized by a competitive approach where each party seeks to maximize their share of a fixed resource, leading to one party's gain being another's loss. In contrast, integrative bargaining focuses on collaboration and finding win-win solutions that address the interests of both parties. While distributive bargaining often results in a zero-sum outcome, integrative bargaining encourages cooperation and mutual benefit, fostering better long-term relationships.
• Discuss the importance of understanding BATNA in the context of distributive bargaining negotiations.
  • Understanding BATNA is crucial in distributive bargaining because it provides negotiators with leverage. Knowing the best alternative if negotiations fail helps parties assess their position and make informed decisions about when to walk away from a deal. A strong BATNA can enhance confidence during negotiations, allowing one to resist unfavorable offers and push for better terms. This awareness ultimately shapes the strategies employed during the bargaining process.
• Evaluate the potential long-term effects of relying solely on distributive bargaining tactics in international negotiations.
  • Relying solely on distributive bargaining tactics can lead to short-term gains but may have detrimental long-term effects on relationships between negotiating parties. In international contexts, this approach can foster distrust and hostility, making future cooperation more challenging. Additionally, it may overlook opportunities for mutually beneficial solutions that could arise through integrative bargaining. Thus, while distributive tactics can be effective in certain scenarios, over-reliance can hinder future diplomatic relations and collaborative efforts.

Related terms

Integrative Bargaining: A collaborative negotiation approach where parties seek win-win solutions by addressing interests rather than just positions.

BATNA:

Best Alternative to a Negotiated Agreement; the most advantageous course of action a party can take if negotiations fail.

ZOPA: Zone of Possible Agreement; the range in which an agreement is satisfactory to both parties involved in a negotiation.