Post #3: Roleplay: Salt Harbor

Roleplay (Salt Harbor)

During the second negotiation class we once again played a game. It was as joyful and effective as during the first class except that this time we were all smarter and more analytical in the elaboration of our strategies. We tried to apply the four key concepts of negotiation we learned about last time. Nobody wanted to lose or make a mistake, so we paid very close attention to all details.

Description:

This time I was given the role of the owner of the Easterly, a successful inn, located in the seaside village of Salt Harbor. However, in the midst of my success I faced a challenge—Brims (a regional chain of coffee shops) bought the vacant parcel of land facing the harbor just near to my hotel. They already had a permit to build a one-and-a-half-story structure that would block the view from the best rooms of my hotel. That could have a bad impact on my business and its profit. According to my lawyer, if I went to court, I would have 50% chance of stopping the building of the Brims’ new coffee shop. Moreover, it would probably take many years and cost a lot of money. Thus, the best way to act was to purchase the lot from Brims and to prevent someone else from building on it keeping the value of the inn. 

Negotiations:

My objective was to purchase the land at the best price possible taking into account all details and following all prices mentioned in my role instructions. According to my data, Brims paid $100,000 for the given parcel 3 months ago. Even if an alternative site for Brims would probably cost $200,000 my first price offer was $120,000. I thought that real estate market at the moment of purchase could be higher and I did not want to offer more because it is always better to start with a little amount. Moreover, at my heart I was hoping my opponent would agree. A rough “no” for the last offer brought me back to earth. The first offer of my opponent was $250,000 which was a lot for me even if my reservation price (or walk-away price) was $350,000. Of course, I could agree with the opponent’s first offer because technically it suited me! However, shake hands without even trying to negotiate for a lower price would be a bad idea. Moreover, my assignment was to purchase Brims’ land at the BEST price, so the last one I realistically hope for was $220,000. In this case, my BATNA would be to purchase the Brims’ land for $350,000 if its manager did not agree with my best price. 

Thus, I was quite calm and emotionless during the negotiations. I asked many questions in order to find some arguments and make Brims’ negotiator change her mind and agree with my price offer. At the end of our negotiations I raised my price to $190,000 and Brims’manager finally agreed and we shook hands. Both sides were absolutely satisfied by the deal because we both found our zone of possible agreement.