Negotiation
Management, Analysis and Support
11
|
Negotiation
Management, Analysis and Support
|
|
| |
||
| Distributive Negotiations |
11
|
|
| Single issue negotiations | ||
Beliefs and subjective probability
What are your beliefs about your opponent’s reservation value?
Assume that you are buying a vintage car:
What is the highest value for the seller’s RV?
What is the lowest value the seller would accept?
Assume that:
- the lower bound value of your estimate of the seller’s RV is $18,000, and
- your reservation value is $40,000 and the seller will certainly sell for this amount.
Assume further that all values between $18,000 and $40,000
are equally likely, i.e., buyer’s beliefs are described by a uniform distribution?
Buyer’s beliefs about the seller’s reservation value
