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What is the significance of understanding the resistance point of both parties?
A “resistance point” is the bare minimum terms that a negotiator is willing to accept in a negotiation. One should always establish a resistance point prior to beginning a negotiation. To do so, a negotiator should seek to understand herself, the counterparty, and the negotiation situation. Understanding each party’s interests, objectives, and resistance point allows a negotiator to development a strategy and select tactics to achieve that strategy. Any factors that may provide useful information in the negotiation or influence a counterparty’s negotiation strategy are relevant. Such understanding allows a party to establish a reservation point and proceed with the negotiation process. The reservation point may affect the negotiation process, and it is strengthen by an understanding of:
• The nature and strength of each party’s interests,
• Each party’s BATNA,
• Each party’s cost of delay or non-agreement.
The BATNA is generally the guiding force in determining the resistance point. It can also be a primary source of a party’s negotiating power. Each party to the distributive negotiation is advised to guard or conceal information about themselves while trying to find out as much information as possible about the other party. The question becomes, how much should one disclose about her reservation point. Generally, parties will seek to make concessions and selectively reveal information to determine the other party’s reservation point or other useful information.
• Strategy Note: Be aware of the “goal-setting paradox”. Pursuant to this theory, a negotiator who focuses on her ideas or principles in the negotiation rather than the reservation point may feel less satisfied in an outcome than a negotiator who focuses on her own reservation point.
• Discussion: Do you think the resistance point is always closely related to the BATNA? Can you think of other necessary considerations when setting the resistance point?