Which of the Following Is a Difference Between Interest-Based Bargaining

question 35

Multiple Choice

Which of the following is a difference between interest-based bargaining and distributive bargaining?

• A) In interest-based bargaining, negotiators do not have a BATNA, while in distributive bargaining they do.
• B) In interest-based bargaining, negotiators reveal their reservation points at the beginning of the negotiation.
• C) In interest-based bargaining, companies stake out their positions at the beginning of negotiations and rarely deviate from these positions.
• D) Interest-based bargaining rarely begins with parties stating their anchor points, while distributive bargaining begins with parties stating opening prices.

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Definitions:

Interest Rate

Interest rate is the percentage of the principal amount charged by lenders for the use of their money or paid by banks for keeping money in an account.

Debt Ratio

A financial ratio that measures the extent of a company’s leverage, specifically the ratio of its total liabilities to its total assets.

Business Risk

The exposure to uncertainty and potential loss in a company’s operations due to factors like fluctuations in revenue or expenses.

Financial Risk

The possibility of losing money on an investment or business venture, often due to changes in the financial markets or failure to meet debt obligations.