How Does Distributive Bargaining Work.pdf - How Does...

How Does Distributive Bargaining Work?
In many business negotiations, distributive bargaining involves haggling over issues, such as
price. Both parties go back and forth in an attempt to persuade the other to pursue the path that
benefits them the most. Each individual in the negotiation has a reservation point, such as a
price or position, that represents the least favorable point at which they will accept the
negotiated terms.
During distributive bargaining, both parties try to figure out their opponent’s reservation or
walk-away point and try to make a deal that closely aligns with their goal while coming as close
as possible to their competitor’s reservation - before going too far. Since distributive bargaining
ends with one person’s loss becoming another’s gain, it is often referred to as a win-lose or
zero-sum negotiation.
Distributive bargaining contrasts with integrative bargaining, which is a cooperative approach
that seeks to maximize the benefits to all parties involved.
Disadvantages of Distributive Bargaining
Since distributive bargaining is characterized by a win/lose outcome, the process tends to foster
competitive or adversarial relationships. Parties involved in the negotiation do not have shared
interests as they both try to come out of the negotiation ‘on top.’
As a result of the competitive nature of this approach, some individuals participating in
distributive bargaining may attempt to gain an advantage by using dishonest, deceptive, or