Andre is looking for a plot of land upon which to build a house and not far from where he lives

presently, in a small fishing village on a Greek island. A half-hectare plot has been for sale for nearly

three years. The owner, a former resident on the island, had used two local real estate agencies in

succession without concluding a sale.

Last week another, different, real estate agency erected a 'for-sale' board on the site and Andre

checked the sale particulars on the Internet. The asking price is $250 000, which was $20 000 above

the price asked for the plot on the owner's previous attempts to sell it. Interestingly, the owner had

not dropped his price despite his failure to sell.

Andre enquired about the plot at the mayor's office in Zante, the island's only town, 18 kilometres

away, seeking details of any planning restrictions affecting the site and what was expected from any

building or buildings erected there. He was assured there were no planning restrictions on what could

be built on it.

He contacted the selling agent, Ms Voutos, who claimed there had already been many enquiries from

people living on the island and from Athens, where Giorgo Krimpas, the owner, lived. She also said

that Giorgo was determined to get his price of $250 000, that he was in no hurry to sell, and that he

insisted that all negotiations were to be conducted through herself.

Andre thought the owner might be in a strong bargaining position by demonstrating his firmness on

price and by recently increasing the price to $250 000. Leaving everything to his agent, Ms Voutos,

her commission presumably rested on her getting Giorgo his price in view of the alleged interest in

the site.

Andre's problem boiled down to where to open his negotiations. Should he offer the asking price? If

not, should he go over it? How far should he go under it? If either, which price should he offer?

He had insufficient finance in place to pay close to the asking price for the land, given that, in

addition to the land price, he had to finance the clearing of the land of bush and overgrowth, much of

it a disused and neglected old olive grove, plus the accumulated rubbish dumped on it over the years.

Then he had to undertake landscaping on the sloping ground and build a boundary fence, pay the

architect's fees, install all the electricity, water and sewage utilities, and construct a 500-metre private

access road. Lastly, he had to finance the construction of his house, plus a swimming pool.

Andre did not like dealing with agents; he preferred direct negotiations between principals. He did

not like Giorgo's aggressive price tactics of increasing his price to $250 000 when he couldn't sell

the land for three years at $230 000. In these circumstances, he was determined that he would not

accept Giorgo's opening price. If a commercial developer took an interest in the site, which was large

enough to build three or four houses for holiday lets during the summer season, this could create

problems for Andre's ambitions.

please answer the below questions:

1-In this transaction what are Giorgo and Andre's interests?

2-How would you describe the distributed bargaining problem between Andre and Giorgo/Ms. Voutos?

3-Why would Giorgo use an agent such as Ms. Voutos?

4-How might Andre deal with Giorgo's apparently strong bargaining position with a conditional bargain for Andre to settle at less than, but no more than, $250 000?

5-If Andre's entry price for the land is $220 000 and his exit price is $245 000, and Ms Voutos entry price is $250 000 and her exit price is $240 000, explain the concept of Negotiator's Surplus and identify the necessary conditions for a deal to be agreed between the buyer and the agent (subject to Giorgo's veto as principal seller).