Mastery Quiz 3

TOTAL POINTS 11
1.
Question 1
Preamble: The questions on this quiz are meant to test whether you have watched all the
material and understand the concepts presented in Module 3. If you are reading this, I hope that
means you’ve had a chance to look over the questions in advance (provided in the Preview of
Mastery Quiz 3) and so you know what to expect.

Q1. The best possible outcome for the buyer in the Zincit case is Package E.

1 point
Yes

No

2.
Question 2
When you are unsure if you have the authority to accept an innovative solution, the best course
of action is to...

1 point
Go with the new idea if it creates significant value. It is better to ask for forgiveness than
permission.

Stick to the known solutions. It is better to lose a deal than get fired for doing something that you
don’t have permission to do.

Bring back two deals, one of which is clearly allowed along with the innovative solution.

3.
Question 3
In the Zincit negotiation, who should suggest the lawyer’s fee be renegotiated, since it is to his or
her benefit?

1 point
Eli Hasan (Seller)

Sam Massey (Lawyer)

Zincit representative (Buyer)

Hasan and Massey, but not Zincit

All three

4.
Question 4
Consider a Zincit negotiation in which the Zincit representative proposes a new alternative to the
five packages: A, B, C, D, and E. If the new option offers Hasan’s lawyer Sam a lower
commission, Sam should advise Hasan to stick to the five options on the table.

1 point
Yes

No

5.
Question 5
Consider a Zincit negotiation in which the Hasan proposes a new alternative to the five
packages: A, B, C, D, and E. If Hasan's new option involves splitting the pie evenly, the Zincit rep
should insist on sticking to the initial five options because they all lead to Zincit getting more than
half of the pie.

1 point
Yes

No

6.
Question 6
How do you fight fire?

1 point
You fight fire with fire.

You call out the other person for lighting a fire.

You try to put out the fire.

7.
Question 7
In one of the negotiation reenactment videos, Hasan makes an ultimatum to Zincit: Package A or
B or no deal. Hasan then leaves the room. What is Zincit’s best response?

1 point
No deal. We don’t like to be given ultimatums.

B, as B is better for us than A.

A, as A will hurt you more than it hurts us.

What would you say to a deal that made you $1 million better off than A?

8.
Question 8
You are negotiating a division of two assets, say a bowl of beets and a bowl of broccoli. You like
broccoli more than beets, but both are good. The other side likes beets but dislikes broccoli.
These preferences are known to all parties. What is your best course of action?

1 point
Suggest the other side gives broccoli another try.

Suggest you divide the beets and broccoli equally between the two of you.

Suggest you divide the beets and broccoli equally between the two of you, and then propose to
trade half your beets for all of the other side’s share of broccoli.

Suggest you get all the broccoli and the other side gets all the beets.

Suggest the other side divides the broccoli and beets into two parts, and then you get to choose
which part to take.

9.
Question 9
If you are negotiating a division of two assets, say beets and broccoli, and the other side asks
whether you prefer beets to broccoli or broccoli to beets, you should...

1 point
Reveal that you prefer broccoli to beets.

Pretend that you prefer beets to broccoli.

Say that you are indifferent between the two.

Say that it isn’t an appropriate question to ask.

10.
Question 10
In the Zincit case, which of these approaches maximizes Hasan’s payoff?

1 point
Hasan and Zincit split the bonus 50:50, so they each make an extra $50 million in the event that
the FDA approves the drug.

Hasan gets all (or nearly all) the bonus, in the event the FDA approves the drug, in return for a
lower upfront payment. For example, Hasan would get a $90 million bonus, but only $15 million
upfront.

Hasan should not accept anything less than $20 million upfront (since that is what Zums offered
him); thus he should maximize his bonus subject to not accepting less than $20 million upfront.

11.
Question 11
Anya and Boris are planning to take a 7-day trip together. Anya would like to spend most of her
time playing golf, with a little time at the beach. Boris doesn't really like golf, so he would like to
spend as much time as possible at the beach. The following four options are the only ones
available to the two of them.

Anya Boris

1. All 7 Days playing Golf 10 0

2. 5 Days playing Golf / 2 at the Beach 12 3

3. 3 Days playing Golf / 4 at the Beach 9 6

4. All 7 days at the Beach 6 7

All the payoffs above are known to both parties. Anya knows that Boris does not like Option 1, so
she proposes taking Option 1 off the table if Boris will agree to reciprocate. What should Boris
do?

1 point
Agree to take Option 1 off the table if Anya will take Option 3 off the table.

Agree to take Option 1 off the table if Anya will take Option 4 off the table.

Agree to take Option 1 off the table if Anya will take Options 3 and 4 off the table.

Turn down Anya’s offer and take nothing off the table.

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