Negotiation Management, Analysis and Support
Distributive Negotiations		13
Single issue negotiations

New information and update

Suppose the seller announces that she has reduced the list price to $34,000. How does this change your beliefs?

What is the probability that the seller’s reservation value is less than $24,000?

(24,000 -18,000)/(34,000 -18,000) = 6/16 = 0.375

instead of 0.3.

Your confidence increased by 20% that the seller may sell the product for $24,000 or less (from 30% to 37.5%).

• Information is valuable because:

New information allows for belief update.

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