PACS 4050 1st EditionFinal Exam Study Guide Lectures: 8 - 12Lecture 8 (Chapter 8 October 29)What if They Don’t Obey the Rules of the Road? Trust, Ethics, and Reputation in NegotiationRelation-based trust: When you have a strong pre-existing relationship with the other person you can predict their trustworthy behavior with accuracy. In this type of relationship you can freely share information and assume the other will not exploit you.Knowledge-based trust: The type of trust that develops when you know the other person and have had some prior interactions with them such that you can be confident inn predicting their behavior.Identity-based trust: Trust in another person that is based on a shared identity-like same religionor same sorority. You do not actually know or have personal experience with the individual, but you trust them due to your shared identity.Institutional-based trust: The type of trust you have in someone because you know the institution or organization they represent has structures or policies in place that require their members to act in trustworthy ways.Deception: Giving information that implicitly encourages people to draw false conclusions.Trust dilemmas: Are mixed-motive situations where there are short-term incentives to compete.To move the other person toward thinking long term you must focus on the future of the relationship, increase communication, focus on joint outcomes, and institute accountability.Ethics of purpose: Is an absolutist approach to ethics that views people as basically good and suggests they will use a good means to reach a good end.Ethics of principle: A relativist approach to ethics that is grounded in the prevalent culture. It assumes that people are rational and will do the right thing to produce an outcome that is consistent with the culture. A do unto others approach. Ethics of consequence: A utilitarian or pragmatic approach to ethics. It assumes the individual will choose the action that produces an outcome that does the lease harm and the most good.Essential competition: The type of competition where there can only be one winner. In business it can be when there is a very small niche market and there is not room for two competitors, thus it is essential that one must win. Some will be tempted to use unethical tactics when there is essential competition.Selective disclosure: In negotiation, this means you don’t disclose all your information, rather you share only that information that is in your best interest to share.- General Strategies for Promoting Trusto Enlarge the shadow of the future.o Change the payoff structure to eliminate the conflict between self-interest and mutual interest.o Increase communication.o Persuade the other party to focus on joint outcomes.o Institute accountability.- Repairing Broken Trust in Negotiationo Set up a face-to-face meeting with the other negotiator.o Put the focus on the relationship instead of on who is right or who is wrong.o Apologize to the other negotiator. Let the other negotiator vent about why he or she is upset or frustrated. o Do not get defensive when talking to the other negotiator, even if you believe theperson is misinformed or wrong.o Ask for clarifying information.o Formulate a plan; ask the other negotiator what he or she thinks is fair or what they need.o Think about ways to prevent a future problem.o Do a relationship checkup after working things out.- Forms That Unethical Behavior May Take in Negotiation Settingso Selective disclosure and or exaggeration.o Misrepresentationo Deceptiono False Threatso False Promiseso Falsificationo Inflicting direct and intentional harm- If you have no prior information about the trustworthiness of the other person, you should approach the negotiation with caution. - If you have reason to believe the person across the negotiations table from you cannot be trusted, you will likely hold your cards close to your chest and be reluctant to share critical information. Integrative potential is unlikely to be recognized, never mind achieved. Rather, the negotiation will take on a more distributive tone, with each party claiming as much value as possible with little or no effort to create value first.- Relation-based trust is probably the best predictor of future trustworthy behavior.- Trust dilemmas arise in situations where there are incentives for both parties to compete(defeat) in the short run, even though over time, both would be better off by cooperating.- If you are a negotiation tactic that you deem ethical (overstating the value of you BATNA), and the other negotiator learns their real value of you alternative, that person is likely tojudge your bargaining behavior as unethical. Likewise, if the other negotiator holds a very high ethical standard, he or she my judge behaviors that most see as ethical and unethical.Lecture 9 (Chapter 9 November 5) Objects in the Mirror May Be Closer than They Appear: Perceptions, Biases, and Communication in NegotiationSelective attention: The tendency to focus only on information in our environment that is consistent with what we already believe or know. This can lead to biased information processingwhere decision makers ignore information that is inconsistent with poor beliefs and only attend to self-confirming evidence.Halo effect (and horns effect): This effect occurs when we only know one good (bad) thing aboutanother person and then generalize this information to other attributes of the person without good reason. If someone is nice (mean) you may also assume they are smart (stupid).Framing effects: These effects occur when a situation is described in terms of what you stand to gain versus what you stand to lose. People are much more sensitive to and influenced by loss frames, and they are more risk-seeking in the domain of losses.Preference reversals: Are related to framing effects in that people will give responses that are intransitive depending on how the question is framed. That is, they will reverse their preference as a function of whether the question is posed in terms of possible gains or possible losses.Loss aversion: People are much more sensitive to losses than they are to gains of the same size. Loss aversion can be explained by the subjective utility curve in Prospect Theory.Prospect theory: A subjective utility theory that shows individuals psychological value for moneyis not linear. Most people have a utility curve that is concave in the domain of gains and convex in the