Get All Weeks Introduction to Negotiation: A Strategic Playbook for Becoming a Principled and Persuasive Negotiator Quiz Answers
Week 01: Introduction to Negotiation: A Strategic Playbook for Becoming a Principled and Persuasive Negotiator Quiz Answers
Mastery Quiz 1 – 2 Quiz Answers
Q1. Preamble: This is the first mastery quiz for the course. The questions on this quiz are meant to test whether you have watched all the material and understand the concepts presented in Modules 1 – 2. If you are reading this, I hope that means you’ve had a chance to look over the questions in advance (provided in the Preview of Mastery Quiz 1 – 2) and so you know what to expect.
- The pie is the benefit the negotiating parties could get if they work together.
- The pie is the difference between the benefit the negotiating parties could get if they work together and the sum of the benefits each party could get on its own.
- The pie is the difference between the benefit one party can get on its own and the benefit the other party can get on its own.
Q2. What is the Shapley Value?
- For each party in the group, it is the amount of pie created by that party joining others in the group, averaged across all possible orderings in which parties join the group.
- For each party in the group, it is half of the amount of pie created by that party joining others in the group, averaged across all possible orderings in which parties join the group.
- For each party in the group, it is the maximum portion of the pie created by that party joining the group, across all possible orderings in which parties join the group.
Q3. In the Planet–Gazette merger, the Gazette was twice as big as the Planet. If the Planet were the same size as the Gazette, how much more of the pie would you expect the Planet to get?
- No more
- 50% more
- 100% more
Q4. Recall in the Planet–Gazette merger case, the increased productivity from the Gazette’s know-how was worth $1 million to the Planet. Imagine the Planet could hire a consultant to improve its productivity up to the same level as the Gazette. The cost of the consultant would be $200,000. Of course, with the merger, there is no need for the consultant. When the Planet has the ability to hire a consultant, how much more money should the Planet get in the merger?
- The same amount as before
- $200,000 more
- $300,000 more
- $400,000 more
- $500,000 more
Q5. Consider a potential merger between two hypothetical beer companies. Prior to the merger, the first, Ann Hy, is worth $150 billion and the second, Czar Bosch, is worth $100 billion. If they merge, they will gain $30 billion in increased value from reduced costs and additional sales (in present discounted value). Thus the combined value of the new entity (called Ann Hy-Czar Bosch) would be $280 billion. How much more could Czar Bosch hope to get by using the theory of the pie instead of proportional division?
- $1.3 billion
- $3 billion
- $5 billion
- $10 billion
- $10.7 billion
Q6. In an Ultimatum Game where the pie is $100, would you rather be:
- the person making the offer
- the person receiving the offer
Q7. You should propose proportional division if it benefits you.
Q8. Abe and Bea each have some money to invest in a CD (Certificate of Deposit). Abe has $5,000 and Bea has $20,000. Both are interested in making a 6-month investment at Synchrony Bank. The CD rates for Synchrony Bank (as of July 8, 2015) are as listed below.
interest, Abe would get $5,010 in six months. With 0.50% interest, Bea would get $20,050 at the end of six months.
If they pool their funds, they will be able to purchase a $25,000 CD, which pays a higher interest rate. The 0.60% interest will return $25,075 at the end of six months.
Obviously, Abe gets back his $5,000 principle, and Bea gets back her $20,000 principle. How should the $75 interest be divided between the two of them
- Divide up the interest according to the amount invested. Since Bea has 80% of the funds, she should get 80% of the interest, or $60 in total. This is the same as both parties getting 0.60% interest on their funds
- Divide the interest in two, so each gets $37.50.
- Abe gets $17.50 and Bea gets $57.50.
Mastery Quiz 3 Quiz Answers
Preamble: The questions on this quiz are meant to test whether you have watched all the material and understand the concepts presented in Module 2. If you are reading this, I hope that means you’ve had a chance to look over the questions in advance (provided in the Preview of Mastery Quiz 2) and so you know what to expect.
Q1. The best possible outcome for the buyer in the Zincit case is…
- Package A
- Package B
- Package C
- Package D
- Package E
- None of the above
Q2. When you are unsure if you have the authority to accept an innovative solution, the best course of action is to…
- Go with the new idea if it creates significant value. It is better to ask for forgiveness than permission.
- Stick to the known solutions. It is better to lose a deal than get fired for doing something that you don’t have permission to do.
- Bring back two deals, one of which is clearly allowed along with the innovative solution.
Q3. In the Zincit negotiation, who should suggest the lawyer’s fee be renegotiated, since it is to his or her benefit?
- Eli Hasan (Seller)
- Sam Massey (Lawyer)
- Zincit representative (Buyer)
- Hasan and Massey, but not Zincit
- All three
Q4. Consider a Zincit negotiation in which the Zincit representative proposes a new alternative to the five packages: A, B, C, D, and E. If the new option offers Hasan’s lawyer Sam a lower commission, Sam should advise Hasan to stick to the five options on the table.
Q5. Consider a Zincit negotiation in which the Hasan proposes a new alternative to the five packages: A, B, C, D, and E. If Hasan’s new option involves splitting the pie evenly, the Zincit rep should insist on sticking to the initial five options because they all lead to Zincit getting more than half of the pie.
Q6. How do you fight fire?
- You fight fire with fire.
- You call out the other person for lighting a fire.
- You try to put out the fire.
Q7. In one of the negotiation reenactment videos, Hasan makes an ultimatum to Zincit: Package A or B or no deal. Hasan then leaves the room. What is Zincit’s best response?
- No deal. We don’t like to be given ultimatums.
- B, as B is better for us than A.
- A, as A will hurt you more than it hurts us.
- What would you say to a deal that made you $1 million better off than A?
Q8. You are negotiating a division of two assets, say a bowl of beets and a bowl of broccoli. You like broccoli more than beets, but both are good. The other side likes beets but dislikes broccoli. These preferences are known to all parties. What is your best course of action?
- Suggest the other side gives broccoli another try.
- Suggest you divide the beets and broccoli equally between the two of you.
- Suggest you divide the beets and broccoli equally between the two of you, and then propose to trade half your beets for all of the other side’s share of broccoli.
- Suggest you get all the broccoli and the other side gets all the beets.
- Suggest the other side divides the broccoli and beets into two parts, and then you get to choose which part to take.
Q9. If you are negotiating a division of two assets, say beets and broccoli, and the other side asks whether you prefer beets to broccoli or broccoli to beets, you should…
- Reveal that you prefer broccoli to beets.
- Pretend that you prefer beets to broccoli.
- Say that you are indifferent between the two.
- Say that it isn’t an appropriate question to ask.
Q10. In the Zincit case, which of these approaches maximizes Hasan’s payoff?
- Hasan and Zincit split the bonus 50:50, so they each make an extra $50 million in the event that the FDA approves the drug.
- Hasan gets all (or nearly all) the bonus, in the event the FDA approves the drug, in return for a lower upfront payment. For example, Hasan would get a $90 million bonus, but only $15 million upfront.
- Hasan should not accept anything less than $20 million upfront (since that is what Zums offered him); thus he should maximize his bonus subject to not accepting less than $20 million upfront.
Q11. Anya and Boris are planning to take a 7-day trip together. Anya would like to spend most of her time playing golf, with a little time at the beach. Boris doesn’t really like golf, so he would like to spend as much time as possible at the beach. The following four options are the only ones available to the two of them.
|1. All 7 Days playing Golf||10||0|
|2. 5 Days playing Golf / 2 at the Beach||12||3|
|3. 3 Days playing Golf / 4 at the Beach||9||6|
|4. All 7 days at the Beach||6||7|
All the payoffs above are known to both parties. Anya knows that Boris does not like Option 1, so she proposes taking Option 1 off the table if Boris will agree to reciprocate. What should Boris do?
- Agree to take Option 4 off the table if Anya will take Option 1 off the table.
- Agree to take Option 3 off the table if Anya will take Option 1 off the table.
- Agree to take Options 3 and 4 off the table if Anya will take Option 1 off the table.
- Turn down Anya’s offer and take nothing off the table.
Mastery Quiz 4 Quiz Answers
The questions on this quiz are meant to test whether you have watched all the material and understand the concepts presented in Module 4. If you are reading this, I hope that means you’ve had a chance to look over the questions in advance (provided in the Preview of Mastery Quiz 4) and so you know what to expect.
Q1. Brigitte has a gas station for sale. If she can sell the station for $600k, then she can take a trip around the world. Part of why she needs $600k is she won’t have a job waiting upon her return. She’ll be 52 and needs a cushion while she looks for a job. When Albert asks her why she is selling the station, Brigitte should…
- Refuse to answer the question. It is not Albert’s business.
- Explain that she plans to retire.
- Explain that competition is making the job harder for an owner/operator.
- Explain her desire to travel around the world.
Q2. Brigitte has a gas station for sale, which Albert is interested in purchasing. Based on the financials, Albert firmly believes the station is worth more than $800k. However, he has been authorized to pay up to but no more than $520k. Brigitte has a firm offer for $500k but would like to get $600k. The negotiations break down. At this point, Albert has come up to $520k, and Brigitte has come down to $560k. Which of these is Albert’s best course of action?
- Albert should come up to $530k. The station is still a great deal at that price.
- Albert should offer to meet halfway, at $540k.
- Albert should ask Brigitte for an option to buy the station for $560k if he can get approval.
- Albert should see if Brigitte will give him an option to buy the station at $560k if he can get approval; if she won’t provide such an option, he should offer to buy the station at $540k outright.
- Albert should walk away.
Q3. Brigitte has a gas station for sale. She has a firm offer from Acmeoil for $400k. Albert is interested in purchasing the station. He has offered $520k and asks Brigitte what her other offer is. Which of these is Brigitte’s best course of action?
- Reveal that she has turned down the other offer.
- Refuse to answer the question. It is not Albert’s business.
- Reveal that the other bidder has offered $400k.
- Say that the other bidder has offered $550k.
Q4. Brigitte has a gas station for sale, which Albert wants to buy. If Brigitte can sell the station for $600k, then she can take a two-year sailboat trip around the world. Brigitte shares her plans and why she needs $600k. Albert honestly thinks this is the stupidest plan he’s ever heard. And even if it were a good idea, this isn’t a valid reason for him to pay more money. How should Albert reply?
- Albert should explain why sailboat trips are not a cost-effective way to travel.
- Albert should say: I appreciate that you want to take a round-the-world trip. I want to be 7 ft. tall and play for the Lakers. But that isn’t going to happen either.
- Albert should say: Why do I care how you spend your money? I’m prepared to pay what the station is worth, not what it costs you to travel around the world.
- Albert should say: I can’t just pay you more so you can travel around the world, but help me understand more about your plans so I can see how I might be able to help.
Q5. In the Outpsider case, if Cade tells the buyer, Pat Bennett, he has another offer of $550k, what should Pat say?
- I’ll offer you $525k.
- Okay, we’ll match that.
- Okay, we’ll pay you $575k.
- I’d take that offer if I were you.
Q6. In the Outpsider case, what is the trick to expanding the pie and making the deal happen?
- Giving Cade a job at the new magazine.
- Raising the purchase price.
- Providing Cade with health insurance coverage for his back.
- Allowing Helen to keep writing articles.
- Allowing Helen to keep getting ads at cost.
Q7. If the buyer tries to play a good cop, bad cop routine (e.g., “You’re lucky you’re dealing with me and not the person who usually negotiates these deals”), the seller should:
- Be happy to be dealing with the good cop.
- Implicitly call out the buyer for using this tactic.
- Explicitly call out the buyer for using this tactic.
- Do a deal so as to avoid having to negotiate with the bad cop.
- Ask to work with a different negotiator.
Q8. What is the nibble?
- Using the threat of losing a big deal to get one or more small concessions thrown in.
- Asking for the same deal over and over until the other side gets worn out and concedes.
- Suggesting several different offers in vague, noncommittal terms to see which piques the other side’s interests.
Q9. How do you fight the nibble?
- You fight the nibble with a nibble.
- You fight the nibble with overwhelming force.
- You call out the nibble.
Q10. Aisha wants to buy a house. The seller has asked for $500,000 and seems eager to sell. The house has been on the market for some time. Which of these opening offers do you think will lead to the lowest selling price?
Mastery Quiz 5 Quiz Answers
Q1. The questions on this quiz are meant to test whether you have watched all the material and understand the concepts presented in Module 5. If you are reading this, I hope that means you’ve had a chance to look over the questions in advance (provided in the Preview of Mastery Quiz 5) and so you know what to expect.
The questions on this quiz are meant to test whether you have watched all the material and understand the concepts presented in Module 5. If you are reading this, I hope that means you’ve had a chance to look over the questions in advance (provided in the Preview of Mastery Quiz 5) and so you know what to expect.
- Game Theory
Q2. In a negotiation, players will never get less than their added value.
Q3. Consider the card game with 26 red cards and 26 black cards. The 26 black cards are all held by Adam, while the red cards are spread out across 26 different individuals. A red card and a black card together are worth $100. The players aren’t allowed to change the game, that is, the individuals with red cards cannot get together and form coalitions, and Adam cannot eliminate any of his black cards. Based on the theory of Added Value, we expect that:
- Adam will end up with more than half the pie. He is a monopolist while the other side of the market is diffuse. His added value equals the entire pie.
- Adam will end up with half the pie. His added value equals the collective added value of the other side.
- Adam will end up with less than half the pie. The sum of the added values of the red card holders equals the entire pie.
Q4. What was Holland Sweetener’s mistake?
- Selling generic aspartame
- Not partnering with Monsanto
- Getting paid to stay
- Not getting paid to play
- Locating in Denmark
- Locating in the Netherlands
Q5. Anjay is selling his coffee company, and there are two potential buyers, Bert and Cecilia. Bert values the business at $40,000, while Cecilia values it at $50,000. Anjay is willing to sell for any amount over $20,000. All of these facts are known to all of the parties. If Bert has not taken this course, how much do you expect Bert will make?
Q6. In the Photo Op case, which of these is William Willcox’s best course of action?
- Go ahead and distribute the brochures and ask for forgiveness later.
- Digitally alter the image so as to get around the copyright.
- When asking about the licensing fee, reframe the use as a publicity opportunity for Bachrach Studios.
- Voluntarily pay the fine.
Q7. Is it better to give or to receive? In the above scenario, would Anita prefer to:
- Make the proposal to Bonita.
- Receive the proposal from Bonita.
Q8. Ai Ping is looking to buy Bao Wun’s antique cabinet. Bao Wun isn’t sure of the value. He has been asking for $10,000, but so far the most Ai has offered is $2,000. It looks like a deal isn’t possible, so the two sides are ready to walk away. Before giving up completely, Ai suggests they try a settlement escrow and Bao agrees. Confidentially, Ai is willing to pay up to $8,000, and Bao is willing to sell for as little as $6,000. If they employ a settlement escrow, what do you expect will happen?
- The device will report that no deal is possible.
- The device will report that they should do a deal at $7,000.
- The device will report that there is a deal to be done.
- The device will report that Ai is willing to pay $8,000 and Bao is willing to sell for $6,000.
Q9. When comparing mediation to arbitration, which one is more forward-looking?
Q10. You get into a taxi and discover that the meter is “broken.” It is late at night and taxis are hard to find. Which of these should you do?
- Negotiate the fare at the start.
- Start the negotiation when you arrive.
- Start the negotiation when you arrive and have exited the taxi.