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Salt Harbor Case

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Salt Harbor Exercise

The Salt Harbor exercise was a real world negotiation exercise that added many factors into the decision making. In this exercise, Lukas and I were partners. Lukas was the buyer and I was the seller. In this negotiation, I had recently purchase some property that I wanted to build into a coffee shop. The neighbor, who is also the buyer, did not want me to build the coffee shop and instead wanted to purchase the property. Lukas stopped me from being able to build the coffee shop through legal channels. I was given the option to take my chances in court or attempt to tell the property to Lukas and open my coffee shop at another location.

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This exercise was challenging because, like any real world situation, there was varying degrees of information asymmetry that made negotiating challenging. We were both looking to get more information out of the other person in order to be in a better position to negotiate. What made this exercise even more interesting is that it simulated a real world situation that two people would deal with every day. This made it easier to understand the underlying implication of the exercise as opposed to the first exercise.
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My Strategy: My initial strategy was to see what Lukas would offer first before I made a bid. Even though I risked being anchored, I want to gather as much information about him and the decisions he is making before I made my bid. I also made sure to understand the implications of my costs and have a reasonable reservation price that would meet my needs. I understood the reservation price as the bare minimum I would ever take for the property and therefore put it at 100. I suppose in my mind, I understood the reservation price to include all possible situations. At 100, this would cover the

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