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Arguing vs Bargaining

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Description (through illustration) of how bargaining works for two parties - buyer and seller - in a game interaction. Relevant for: public policy process; public management; business economics; and organizational behaviour.

Published in: Government & Nonprofit
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Arguing vs Bargaining

  1. 1. Power, Politics & Policy Process Dr. Faheem Jehangir Khan Research Economist, PIDE faheemjkhan@pide.org.pk
  2. 2. FJK | 2015 PIDE, Islamabad The Public & Its Policies Arguing versus Bargaining
  3. 3. FJK | 2015 PIDE, Islamabad FJK Arguing versus Bargaining  Argue Give reasons or cite evidence in support of an idea, action, or theory, typically with the aim of persuading others to share one’s view.  Bargain An agreement between two or more people or groups as to what each will do for the other.
  4. 4. FJK | 2015 PIDE, Islamabad FJK Arguing versus Bargaining Negotiator 1 (Buyer) Initial offer Max. acceptable offer
  5. 5. FJK | 2015 PIDE, Islamabad FJK Arguing versus Bargaining Negotiator 1 (Buyer) Negotiator 2 (Seller) Initial offer Max. acceptable offer Initial demandMax. acceptable demand
  6. 6. FJK | 2015 PIDE, Islamabad FJK Arguing versus Bargaining Negotiator 1 (Buyer) Negotiator 2 (Seller) Initial offer Max. acceptable offer Initial demandMax. acceptable demand Bargaining Range The ‘Bargaining Range’ or ‘Negotiation Zone’ is the range between the minimum price the supplier will accept and the maximum price the buyer will pay.
  7. 7. FJK | 2015 PIDE, Islamabad FJK Arguing versus Bargaining Negotiator 1 (Buyer) Negotiator 2 (Seller) Initial offer Max. acceptable offer Initial demandMax. acceptable demand No deal range No deal range
  8. 8. FJK | 2015 PIDE, Islamabad FJK Arguing versus Bargaining: Example Negotiator 1 (Buyer) Negotiator 2 (Seller) Initial offer Max. acceptable offer Initial demandMax. acceptable demand No deal range No deal range Rs.50,000Rs.30,000
  9. 9. FJK | 2015 PIDE, Islamabad FJK Arguing versus Bargaining: Example Negotiator 1 (Buyer) Negotiator 2 (Seller) Initial offer Max. acceptable offer Initial demandMax. acceptable demand No deal range No deal range Rs.40,000Rs.20,000 Rs.50,000Rs.30,000
  10. 10. FJK | 2015 PIDE, Islamabad FJK Arguing versus Bargaining: Example Negotiator 1 (Buyer) Negotiator 2 (Seller) Initial offer Max. acceptable offer Initial demandMax. acceptable demand No deal range No deal range Rs.40,000Rs.20,000 Rs.50,000Rs.30,000 Bargaining Range: 30k – 40k ‘win-win’ situation

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