While using a reservation value as a backup plan can be beneficial in negotiations, there are potential limitations and drawbacks that need to be considered. One limitation is that the reservation value may act as a psychological anchor, leading the negotiator to settle for suboptimal agreements rather than striving for better outcomes. This anchoring effect can hinder the negotiator's ability to explore creative solutions and maximize value.
Another drawback is the risk of over-reliance on the reservation value, which may result in a lack of flexibility in the negotiation process. If the negotiator becomes too focused on the backup plan, they may miss opportunities for mutually beneficial agreements or fail to adapt to changing circumstances during the negotiation.
To address these limitations, negotiators can implement strategies to mitigate the anchoring effect of the reservation value. This can include setting the reservation value based on objective criteria rather than arbitrary benchmarks, regularly reassessing the value throughout the negotiation, and consciously avoiding fixating on it during the bargaining process.
Furthermore, negotiators can enhance their flexibility by incorporating contingency plans alongside the reservation value. By having alternative strategies in place, negotiators can adapt to unexpected developments and explore different paths to reaching agreements, reducing the risk of tunnel vision on the reservation value.