August 2014 Archways

On Course

Let’s Make a Deal

Students learn the science—and art—of negotiation.

By Matt Gray

After months of searching, Katherine had found her dream house. It had everything she wanted: four bedrooms, a great location, and a beautiful backyard.

house-for-saleThere was just one problem—the price. $365,000.

“The house is clearly overpriced,” she tells her agent, Diane, pointing out the cost per square foot of similar homes in the area.

“Don’t worry about the asking price,” Diane reassures her. “The house has been on the market for two and a half months. I think we just need to make them a fair offer, and we should be able to get it.”

Katherine counters with an offer of $340,000, one she knows is a little on the low side but believes is reasonable.

“They’re crazy, I’m not going to accept less than $356,000 for this house,” responds the owner. “I know what my house is worth, and I’m not going to take an offer that isn’t fair.”

Both sides feel they’ve made a “fair” offer, yet there’s $16,000 standing between them and a deal. Bridging the gap will require skilled negotiation, defined by Visiting Assistant Professor of Psychology Louisa C. Egan Brad as “the art and science of securing agreements between two or more independent parties who are seeking to maximize their outcomes.”

For the past three years, Egan Brad has taught Psychology of Negotiations, a half-semester version of a 10-week course she previously taught to MBA students at the Kellogg School of Management at Northwestern University. The scenario above is actually one of the course’s weekly simulations. Students receive materials ahead of time, and on different weeks they may be recruiters and job candidates, representatives of TV stations and multimedia corporations, or members of a company’s board of directors.

“This is a very hands-on course that integrates practice and theory,” says Egan Brad. “The fact is that we participate in negotiations every day. Understanding the skills and strategies involved in these interactions is of value to every student regardless of her major.”

Linguistics and languages major Katherine Marcoux ’14, the above-mentioned “homebuyer,” says, “Practicing these skills has given me tremendous confidence and strength to be successful in life’s real negotiations.” She is going to spend the next year living in the country of Andorra as a Fulbright Teaching Assistant (see story on page 11) and is already using lessons from the course to negotiate the rent for her summer apartment there.

In addition to the in-class exercises, which are followed by discussion and lecture, students complete weekly challenges outside of class and report back to their classmates via online forums. The course culminates in a final project entailing a high-stakes, real-world negotiation.

Some of Egan Brad’s favorite projects have resulted in an upgrade to first class on a short-haul flight, a car dealership writing off hefty repair charges, and improved summer travel itineraries.

Diane Rojas, a Haverford student who was the buyer’s agent in the home-buying exercise, successfully negotiated for a $10,000 scholarship from The University of Connecticut School of Law.

“Psychology of Negotiations has without a doubt been one of the best classes I have taken in my four years in college,” Rojas says. “The work we do in this class directly translates to the experiences that we are about to engage in in the world outside of the Bi-Co. I am confident that my future negotiations will result in better outcomes for myself and hopefully the parties I represent as a lawyer.”

As for Marcoux, she eventually “purchased” her dream house for $353,000, after the agents involved agreed to take a small cut in their commissions so the owner made a profit she could live with.

“For me these negotiations are less about the money than they are about being valued as an individual,” Marcoux says. “It’s about taking a stand and not allowing yourself to be taken advantage of.”

 

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