Perception and the Types of Risk in a Negotiation

The video tutorial explores the concept of risk in negotiations, emphasizing the difference between actual risk and perceived risk. It explains how perception can alter our understanding of risk and introduces the idea of risk propensity. The tutorial then delves into specific types of risks encountered in negotiations, including strategic risk, BATNA risk, and contractual risk, highlighting their implications and how they can affect negotiation outcomes.

What is the primary difference between actual risk and perceived risk?

• Actual risk is subjective, while perceived risk is objective.

• Perceived risk is always lower than actual risk.

• Perceived risk is based on beliefs, while actual risk is a finite probability.

• Actual risk is always higher than perceived risk.

What does risk propensity refer to in the context of negotiation?

• The risk of alternatives not materializing.

• The probability of achieving negotiation objectives.

• The ability to accept the level of risk perceived in a situation.

• The likelihood of a negotiation failing.

What is strategic risk in a negotiation?

• The risk of failing to achieve strategic objectives.

• The risk of not having a backup plan.

• The risk of alternatives not being viable.

• The risk of the other party not fulfilling their obligations.

What does BATNA risk involve?

• The risk of the negotiation strategy failing.

• The risk of the other party not complying with the agreement.

• The risk associated with alternatives if the negotiation fails.

• The risk of not achieving strategic objectives.

What is contractual risk in a negotiation?

• The risk of not having a BATNA.

• The risk of parties not fulfilling their obligations.

• The risk of the negotiation strategy failing.

• The risk of alternatives not being viable.