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The Mind and Heart of the Negotiator, 7e (Thompson)
Chapter 1 Negotiation: The Mind and The Heart
1.1 Multiple-Choice Questions
1) Anytime you cannot get what you want without the cooperation of others, you are negotiating.
In simple terms, negotiation is best described as:
A) a contest of wills between opposing parties
B) an interpersonal decision-making process necessary whenever people cannot achieve their
objectives single-handedly
C) a third-party mediation
D) the process of compromise so as to instigate conflict, with one side coming out the victor
Answer: B
Page Ref: 1
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
2) Negotiators need to be effective in terms of maximizing all areas of potential value at the
bargaining table. In virtually any negotiation, two things are at stake: economic value and:
A) personal reputation
B) a person's ego
C) relationships and trust
D) money and scarce resources
Answer: C
Page Ref: 2
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
3) Within organizations, people are increasingly interdependent both laterally and hierarchically.
When negotiators are described as being interdependent, that means those people need to know
how to:
A) integrate their interests and work across functional areas
B) have similar incentive structures
C) be self-sufficient and self-focused
D) develop different norms of communication
Answer: A
Page Ref: 5
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
1
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4) Regarding some of the major shortcomings that negotiators struggle to overcome, "lose-lose"
negotiation occurs when negotiators:
A) settle for too little by making concessions that are too small
B) both parties make unwise sacrifices and fail to recognize and exploit opportunities for mutual
gain
C) accept all terms offered by the counterparty
D) do not sign a binding contract
Answer: B
Page Ref: 4
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
5) Negotiators often struggle with several shortcomings that trap them into achieving less than
optimal negotiation outcomes. When a negotiator rejects a proposal that is demonstrably better
than any other option available, the negotiator is being trapped by:
A) the agreement bias
B) the winner's curse
C) hubris
D) settling for too little
Answer: C
Page Ref: 7
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
6) In negotiation it is important to optimize one's strategies by attempting to achieve as much as
possible. Regarding this aspirational outlook, Nobel Laureate Herb Simon distinguished
optimizing from satisficing. Satisficing is best defined as:
A) helping other people
B) negotiating a slice of the pie that is much larger than your original aspirations
C) doing just enough to reach one's minimum goals
D) setting high aspirations
Answer: C
Page Ref: 2
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
7) When we delve into managers' theories about negotiation, we often find that they operate with
faulty beliefs. Which of the following is a myth that negotiators often hold about negotiation?
A) Whatever is good for one party must be good for the counterparty
B) A good negotiator should always approach a counterparty as if they were of equal status
C) Good negotiators play it safe and do not take risks
D) Good negotiators rely on intuition
Answer: D
Page Ref: 10
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
2
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8) Negotiation is a mixed-motive enterprise, which refers to the fact that parties:
A) manage both economic and psychological dimensions
B) have incentives to cooperate as well as compete
C) use both deliberate thought and intuition
D) balance rewards and costs
Answer: B
Page Ref: 9
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
9) Improving your skills in your pursuit to become a successful negotiator depends on:
A) learning how to "outsmart" the counterparty
B) taking advantage of the counterparty's lack of preparation
C) seeking feedback, analysis, and focused practice
D) always letting the other party share their interests first
Answer: C
Page Ref: 8
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
10) A key reason why business people need negotiation skills is due to the increased
specialization of skills. This skill specialization increases the need for negotiators to understand
the motivations behind another's behavior because:
A) people are less dependent on each other for project success
B) people are becoming less competitive with one another in the workplace
C) people are more dependent on each other in the workplace
D) managers must customize incentive and punishment structures for all employees
Answer: C
Page Ref: 5
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
11) Information technology provides special opportunities and challenges for negotiators. One of
the main challenges for negotiators is:
A) disposing of old equipment
B) training employees in new software programs
C) troubleshooting system security issues
D) working in a culture of 24/7 availability
Answer: D
Page Ref: 5
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
3
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12) Besides differences in language and currency issues, one of the main challenges that
globalization presents for negotiators is:
A) the tendency of people to see what they want to see when appraising their own performance
B) learning and adjusting to different norms of communication between parties
C) finding housing for employees
D) influencing the economic forces within the foreign country
Answer: B
Page Ref: 6
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
13) Negotiators who have developed a bargaining style that works only within a narrow subset of
the business world will suffer unless they can:
A) act more competitively
B) act more cooperatively
C) take risks
D) broaden their negotiation skills across businesses, industries, and cultures
Answer: D
Page Ref: 6
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
14) One of the major shortcomings in negotiation occurs when negotiators make too-large
concessions resulting in a too-small share of the bargaining pie. This negotiation trap is called:
A) egocentrism
B) the confirmation bias
C) the winner's curse
D) the mixed-motive negotiator
Answer: C
Page Ref: 7
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
15) With regard to negotiation style, truly effective negotiators are neither tough or soft, but
rather they:
A) are friendly
B) are principled
C) rely on intuition
D) are dignified
Answer: B
Page Ref: 10
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
4
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16) Negotiation experience in the absence of ________, is largely ineffective at improving
negotiation skills.
A) optimism
B) successful outcomes
C) high profile parties
D) diagnostic feedback
Answer: D
Page Ref: 8
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
17) Effective negotiation involves all of the below listed strategies EXCEPT:
A) deliberate planning
B) thoughtful preparation
C) the use of a "gut feeling" or intuition
D) strategic reasoning
Answer: C
Page Ref: 10
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
18) A key to successful preparation is assuming the counterparty is as smart, informed, and
motivated as you are. What is the name of such a perspective?
A) The optimizing model
B) The fraternal twin model
C) The satisficing model
D) The fixed-pie bias
Answer: B
Page Ref: 11
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
19) In negotiation, people hold tightly to several false beliefs about the process. Of these, the
fixed-sum perception is defined as:
A) the assumption that attacking the other party is the best way to get most of the pie
B) the assumption that capitulating to the other negotiating party's demands is the best way to a
win-win agreement
C) the belief that whatever is good for one party must ipso facto be bad for the other party
D) the assumption that sticking to your demands and refusing anything but the majority of the
pie is the best way to get most of the pie
Answer: C
Page Ref: 9
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
5
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20) The process of negotiation is best described as a ________, which involves both ________
and ________.
A) self-assessment; focus; introspection
B) grass-is-greener negotiation; selectiveness; restlessness
C) strategic risk; aggressiveness; gambling
D) mixed-motive enterprise; cooperation; competition
Answer: D
Page Ref: 10
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
21) Educated, smart, motivated people often do not realize their negotiating potential. Over
________ of corporate executives and CEO's leave money on the table at the conclusion of a
negotiation.
A) 25%
B) 46%
C) 66%
D) 80%
Answer: D
Page Ref: 2
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
22) Many negotiators approach a negotiation from the perspective of having to choose between:
A) getting what they want or being liked
B) a choice that puts them in a weak position or a choice that might strengthen them in the future
but has an uncertain probability
C) the lesser of two evils
D) being aggressive toward the counterparty or being legalistic with the counterparty
Answer: A
Page Ref: 2
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
6
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23) Negotiators often believe that if they make a personal sacrifice in the hopes of securing a
business relationship rather than pushing to attain things that are important to them hope their
personal sacrifice will be remembered by the counterparty and rewarded in future negotiations.
This strategy is NOT advisable because:
A) the personal sacrifice may make them look weak to the counterparty
B) team members and the counterparty are not to be trusted
C) the relational sacrifice a person makes today may not be remembered or reciprocated by the
receiving party tomorrow
D) the only strategy of consistent success in a negotiation is being aggressive, holding one's
ground, and making very few concessions to the counterparty
Answer: C
Page Ref: 2
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
24) People often struggle with which negotiation strategies to use in short versus long-term
relationships. If a negotiator believes that a negotiation is a single-shot situation and that they
won't need to interact with the counterparty in the future, the negotiator will often use:
A) an aggressive negotiation strategy
B) a passive negotiation strategy
C) an agent to represent themselves
D) a contingent contract
Answer: A
Page Ref: 3
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
25) Agreements where the outcome is one that creatively combines the negotiating parties'
interests in a way that maximizes the joint economic value is called:
A) a compromise agreement
B) a fixed-sum agreement
C) a reverse-split agreement
D) an integrative agreement
Answer: D
Page Ref: 4
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
7
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26) Following negotiation, there are always concerns by both parties that the agreed upon terms
will be honored. It has been found that successful contract negotiations consider specific
objectives when assessing the quality of contracts. Which of the following is NOT one of those
objectives?
A) How to maximize the likelihood of reaching a good agreement
B) How to reach an agreement that will last
C) How to reach an agreement that will need several ratifications by other parties to refine terms
D) How to reach an agreement that fulfills the intended purpose
Answer: C
Page Ref: 7
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
27) Most negotiations are ________, meaning that if parties work together, they can create more
joint value than if they are purely combative.
A) fixed-sum
B) win-lose
C) variable-sum
D) focal-point based
Answer: C
Page Ref: 9
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
28) Of the many types of feedback that are potentially available to negotiators, information about
the counterparty's ________ and ________ is particularly important.
A) interests; priorities
B) experience; specialized expertise
C) skills; failures
D) reputation; honesty
Answer: A
Page Ref: 8-9
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
29) People who view negotiation as a challenge and believe that negotiation ability can be
improved with experience and practice:
A) achieve better deals when they see the negotiation as fixed-sum
B) are naïve and achieve lower-quality deals than naturally gifted negotiators
C) are more successful in reaching high-quality deals
D) are more successful when they approach negotiations aggressively
Answer: C
Page Ref: 10
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
8
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1.2 Discussion Questions
1) What are the key reasons why effective negotiation skills are increasingly important in the
business world?
Answer: They are increasingly important because of the following key reasons: (1) knowledge
economy, (2) specialized expertise, (3) information technology, and (4) globalization.
Page Ref: 4-6
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
2) With regard to how people fall short in negotiating, what are the most common "traps" of
negotiation?
Answer: Leaving money on the table (also known as "lose-lose" negotiation); settling for too
little (also known as "the winner's curse"); walking away from the table (sometimes this
shortcoming is traceable to hubris or pride; other times, it results from a gross miscalculation);
and settling for terms that are worse than the alternative (also known as the "agreement bias").
Page Ref: 7
AACSB: Interpersonal relations and teamwork
Difficulty: Easy
3) What are some of the primary reasons why overconfidence can be detrimental in negotiation?
Answer: People with more experience grow more confident, but the accuracy of their judgment
and the effectiveness of their behavior does not increase in a commensurate fashion.
Overconfidence can be detrimental because it may lead people to take unwise risks.
Page Ref: 8-9
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
4) What are the most prevalent myths about negotiation, and how do these myths hamper
people's ability to learn effective negotiation skills?
Answer: The most prevalent myths are: Myth 1: Negotiations are fixed-sum in nature; Myth 2:
Negotiators need to be either tough or soft; Myth 3: Negotiation skills are something that people
are born with; Myth 4: Good negotiators rely on intuition or "gut feeling."
Page Ref: 9-11
AACSB: Interpersonal relations and teamwork
Difficulty: Easy
5) What is the fraternal twin model of negotiation, and why does it contribute to more successful
outcomes in negotiation?
Answer: The fraternal twin model assumes that the counterparty is every bit as motivated,
intelligent, and prepared as you are. Thus, it contributes to more successful outcomes because
parties rely on simultaneously expanding and allocating the pie of resources, rather than on
"outsmarting" or tricking the other party.
Page Ref: 11
AACSB: Interpersonal relations and teamwork
Difficulty: Hard
9
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6) Why does the fixed-sum myth effect the strategic choices that negotiators make and what
strategy to effective negotiators follow?
Answer: The fixed-sum myth gives rise to a myopic view of the strategic choices that
negotiators have. Most negotiators believe they must choose between behaving in a tough,
punitive fashion to the counterparty or to the other extreme of being soft and concessionary.
Effective negotiators are principled, and follow an enlightened view of negotiation strategy.
They recognize that to achieve their own outcomes they must work effectively with the other
party and cooperate, thus leveraging their own power and strengths.
Page Ref: 10
AACSB: Interpersonal relations and teamwork
Difficulty: Hard
7) Why is it beneficial for students of negotiation to learn and practice negotiation skills in a
domain or industry that is unfamiliar to them?
Answer: It is beneficial for students of negotiation to learn negotiation skills in an industry that
is unfamiliar because learning negotiation skills in a context in which one already has some
expertise may lead to context-dependence, so much so that the learned negotiation skills will not
transfer to other situations.
Page Ref: 9
AACSB: Interpersonal relations and teamwork
Difficulty: Moderate
8) When evaluating the success of a negotiation, what post-negotiation factors should you review
and consider?
Answer: Post-negotiation you should consider the post-deal implementation, the durability of
the agreement, how your reputation will be affected by the agreement (or lack thereof), how you
and perhaps the counterparty feel about negotiating together again, and the level of trust you feel
for the counterparty and if the counterparty feels they can trust you to honor the terms of your
agreement.
Page Ref: 8, Exh. 1-1
AACSB: Interpersonal relations and teamwork
Difficulty: Hard
9) Regarding short- versus long-term relationships, how are our interactions as negotiators
affected by the digital world and what precautions should we take because of this interactive
medium?
Answer: The networked, virtual world blurs the distinction between short and long term
negotiation relationships because most of our interactions are recorded or known to others. Even
if a negotiator does not actually meet a given counterparty again, by virtue of social media, a
detailed account of their interactions world surely be visible for anyone to see. For these reasons,
it is with caution that negotiators should assume the details of their communications and
behavior will be accessible for anyone who might be interested and consequently, act as though
all negotiations have long-term implications.
Page Ref: 3
AACSB: Interpersonal relations and teamwork
Difficulty: Hard
10
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10) How has the popularity of decentralized business structures and the decline of hierarchical
decision making challenged managers?
Answer: The advent of decentralized business structures and the decline of hierarchical decision
making provides opportunities for managers, but also poses some daunting challenges. People
must continually create possibilities, integrate their interests with others, and recognize the
inevitability of competition both within and between companies. Thus managers must be in a
near-constant mode of negotiating opportunities. Negotiation comes into play when managers
participate in joint ventures, partnerships, product launches, reorganizations, and project teams.
Page Ref: 5
AACSB: Interpersonal relations and teamwork
Difficulty: Hard
11
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