Negotiation theory
Encyclopedia
The foundations of negotiation theory are decision analysis
, behavioral decision making, game theory
, and negotiation analysis.
Another classification of theories distinguishes between Structural Analysis, Strategic Analysis, Process Analysis, Integrative Analysis and behavioral analysis of negotiations.
Individuals should make separate, interactive decisions; and negotiation analysis considers how groups of reasonably bright individuals should and could make joint, collaborative decisions. These theories are interleaved and should be approached from the synthetic perspective.
Most theories of negotiations share the notion of negotiations as a process, but they differ in their description of the process. Structural Analysis considers this process to be a power game. Strategic analysis thinks of it as a repetition of games (Game Theory
). Integrative Analysis prefers the more intuitive notion of process, in which negotiations undergo successive stages, e.g. pre-negotiation, stalemate, settlement.
Especially structural, strategic and procedural analysis build on rational actors, who are able to prioritize clear goals, are able to make trade-offs between conflicting values, are consistent in their behavioral pattern, and are able to take uncertainty into account.
Negotiations differ from mere coercion, in that negotiating parties have the theoretic possibility to withdraw from negotiations.
It is easier to study bi-lateral negotiations, as opposed to multilateral negotiations.
to be a possession, manifested for example in economic or military resources, but also thinks of power as a relation.
Based on the distribution of elements, in structural analysis we find either power-symmetry between equally strong parties or power-asymmetry between a stronger and a weaker party. All elements from which the respective parties can draw power constitute structure. They may be of material nature, i.e. hard power
, (such as weapon
s) or of social nature, i.e. soft power
, (such as norm
s, contract
s or precedent
s).
These instrumental elements of power, are either defined as parties’ relative position (resources position) or as their relative ability to make their options prevail.
Structural analysis is easy to criticise, because it predicts that the strongest will always win. This, however, does not always hold true.
s, such as the Prisoner's Dilemma
, a concept
taken from Game Theory
. Another common game is the Chicken Dilemma
.
Strategic analysis starts with the assumption that both parties have a veto
. Thus, in essence, negotiating parties can cooperate (C) or defect (D). Structural analysis then evaluates possible outcomes of negotiations (C, C; C, D; D, D; D, C), by assigning values to each of the possible outcomes.
Often, co-operation of both sides yields the best outcome. The problem is that the parties can never be sure that the other is going to cooperate, mainly because of two reasons: first, decisions are made at the same time or, second, concessions of one side might not be returned. Therefore the parties have contradicting incentives to cooperate or defect. If one party cooperates or makes a concession and the other does not, the defecting party might relatively gain more.
Trust may be built only in repetitive game
s through the emergence of reliable patterns of behaviour such as tit-for-tat.
This table illustrates the options and possible outcomes of the Negotiator's Dilemma.
Process Analysis focuses on the study of the dynamics of processes. E.g. both Zeuthen and Cross tried to find a formula in order to predict the behaviour of the other party in finding a rate of concession, in order to predict the likely outcome.
The process of negotiation therefore is considered to unfold between fixed points: starting point of discord, end point of convergence. The so called security point, that is the result of optional withdrawal, is also taken into account.
Stages may include pre-negotiations, finding a formula of distribution, crest behaviour, settlement
is a concept in negotiation theory whereby parties pretend to reason to reach settlement, but have no intention to do so, for example, one political party may pretend to negotiate, with no intention to compromise, for political effect.
and political psychology
refers to negotiating strategies in which there is no real intention to reach compromise, or a model of information processing
. The "inherent bad faith model
" of information processing is a theory in political psychology that was first put forth by Ole Holsti
to explain the relationship between John Foster Dulles
’ beliefs and his model of information processing. It is the most widely studied model of one's opponent. A state is presumed to be implacably hostile, and contra-indicators of this are ignored. They are dismissed as propaganda ploys or signs of weakness. Examples are John Foster Dulles
’ position regarding the Soviet Union, or Israel’s initial position on the Palestinian Liberation Organization.
Decision analysis
Decision analysis is the discipline comprising the philosophy, theory, methodology, and professional practice necessary to address important decisions in a formal manner...
, behavioral decision making, game theory
Game theory
Game theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...
, and negotiation analysis.
Another classification of theories distinguishes between Structural Analysis, Strategic Analysis, Process Analysis, Integrative Analysis and behavioral analysis of negotiations.
Individuals should make separate, interactive decisions; and negotiation analysis considers how groups of reasonably bright individuals should and could make joint, collaborative decisions. These theories are interleaved and should be approached from the synthetic perspective.
Common Assumptions Of Most Theories
Negotiation is a specialized and formal version of conflict resolution most frequently employed when important issues must be agreed upon. Negotiation is necessary when one party requires the other party's agreement to achieve its aim. The aim of negotiating is to build a shared environment leading to long-term trust and often involves a third, neutral party to extract the issues from the emotions and keep the individuals concerned focused. It is a powerful method for resolving conflict and requires skill and experience. Zartman defines negotiation as "a process of combining conflicting positions into a common position under a decision rule of unanimity, a phenomenon in which the outcome is determined by the process."Most theories of negotiations share the notion of negotiations as a process, but they differ in their description of the process. Structural Analysis considers this process to be a power game. Strategic analysis thinks of it as a repetition of games (Game Theory
Game theory
Game theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...
). Integrative Analysis prefers the more intuitive notion of process, in which negotiations undergo successive stages, e.g. pre-negotiation, stalemate, settlement.
Especially structural, strategic and procedural analysis build on rational actors, who are able to prioritize clear goals, are able to make trade-offs between conflicting values, are consistent in their behavioral pattern, and are able to take uncertainty into account.
Negotiations differ from mere coercion, in that negotiating parties have the theoretic possibility to withdraw from negotiations.
It is easier to study bi-lateral negotiations, as opposed to multilateral negotiations.
Structural Analysis
Structural Analysis is based on a distribution of empowering elements among two negotiating parties. Structural theory moves away from traditional Realist notions of power in that it does not only consider powerPower (sociology)
Power is a measurement of an entity's ability to control its environment, including the behavior of other entities. The term authority is often used for power perceived as legitimate by the social structure. Power can be seen as evil or unjust, but the exercise of power is accepted as endemic to...
to be a possession, manifested for example in economic or military resources, but also thinks of power as a relation.
Based on the distribution of elements, in structural analysis we find either power-symmetry between equally strong parties or power-asymmetry between a stronger and a weaker party. All elements from which the respective parties can draw power constitute structure. They may be of material nature, i.e. hard power
Hard power
Hard power is a term describing political power obtained from the use of military and/or economic coercion to influence the behavior or interests of other political bodies...
, (such as weapon
Weapon
A weapon, arm, or armament is a tool or instrument used with the aim of causing damage or harm to living beings or artificial structures or systems...
s) or of social nature, i.e. soft power
Soft power
Soft power is the ability to obtain what one wants through co-option and attraction. It can be contrasted with 'hard power', that is the use of coercion and payment...
, (such as norm
Norm (sociology)
Social norms are the accepted behaviors within a society or group. This sociological and social psychological term has been defined as "the rules that a group uses for appropriate and inappropriate values, beliefs, attitudes and behaviors. These rules may be explicit or implicit...
s, contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
s or precedent
Precedent
In common law legal systems, a precedent or authority is a principle or rule established in a legal case that a court or other judicial body may apply when deciding subsequent cases with similar issues or facts...
s).
These instrumental elements of power, are either defined as parties’ relative position (resources position) or as their relative ability to make their options prevail.
Structural analysis is easy to criticise, because it predicts that the strongest will always win. This, however, does not always hold true.
Strategic Analysis
According to structural analysis, negotiations can therefore be described with matriceMatrice
Matrice is a comune in the Province of Campobasso in the Italian region Molise, located about 7 km northeast of Campobasso...
s, such as the Prisoner's Dilemma
Prisoner's dilemma
The prisoner’s dilemma is a canonical example of a game, analyzed in game theory that shows why two individuals might not cooperate, even if it appears that it is in their best interest to do so. It was originally framed by Merrill Flood and Melvin Dresher working at RAND in 1950. Albert W...
, a concept
Concept
The word concept is used in ordinary language as well as in almost all academic disciplines. Particularly in philosophy, psychology and cognitive sciences the term is much used and much discussed. WordNet defines concept: "conception, construct ". However, the meaning of the term concept is much...
taken from Game Theory
Game theory
Game theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...
. Another common game is the Chicken Dilemma
Chicken (game)
The game of chicken, also known as the hawk-dove or snowdrift game, is an influential model of conflict for two players in game theory...
.
Strategic analysis starts with the assumption that both parties have a veto
Veto
A veto, Latin for "I forbid", is the power of an officer of the state to unilaterally stop an official action, especially enactment of a piece of legislation...
. Thus, in essence, negotiating parties can cooperate (C) or defect (D). Structural analysis then evaluates possible outcomes of negotiations (C, C; C, D; D, D; D, C), by assigning values to each of the possible outcomes.
Often, co-operation of both sides yields the best outcome. The problem is that the parties can never be sure that the other is going to cooperate, mainly because of two reasons: first, decisions are made at the same time or, second, concessions of one side might not be returned. Therefore the parties have contradicting incentives to cooperate or defect. If one party cooperates or makes a concession and the other does not, the defecting party might relatively gain more.
Trust may be built only in repetitive game
Game
A game is structured playing, usually undertaken for enjoyment and sometimes used as an educational tool. Games are distinct from work, which is usually carried out for remuneration, and from art, which is more often an expression of aesthetic or ideological elements...
s through the emergence of reliable patterns of behaviour such as tit-for-tat.
This table illustrates the options and possible outcomes of the Negotiator's Dilemma.
Process Analysis
Process analysis is the theory closest to haggling. Parties start from two points and converge through a series of concessions. As in strategic analysis, both sides have a veto (e.g. sell, not sell; pay, not pay). Process analysis also features structural assumptions, because one side may be weaker or stronger (e.g. more eager to sell, not willing to pay a certain price).Process Analysis focuses on the study of the dynamics of processes. E.g. both Zeuthen and Cross tried to find a formula in order to predict the behaviour of the other party in finding a rate of concession, in order to predict the likely outcome.
The process of negotiation therefore is considered to unfold between fixed points: starting point of discord, end point of convergence. The so called security point, that is the result of optional withdrawal, is also taken into account.
Integrative Analysis
Integrative analysis divides the process into successive stages, rather than talking about fixed points. It extends analysis to pre-negotiations stages, in which parties make first contacts. The outcome is explained as the performance of the actors at different stages.Stages may include pre-negotiations, finding a formula of distribution, crest behaviour, settlement
Bad faith negotiation
Bad faithBad faith
Bad faith is double mindedness or double heartedness in duplicity, fraud, or deception. It may involve intentional deceit of others, or self deception....
is a concept in negotiation theory whereby parties pretend to reason to reach settlement, but have no intention to do so, for example, one political party may pretend to negotiate, with no intention to compromise, for political effect.
Inherent bad faith model in international relations and political psychology
Bad faith in political sciencePolitical science
Political Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...
and political psychology
Political psychology
Political psychology is an interdisciplinary academic field dedicated to understanding political science, politicians and political behavior. Psychological theories of behavior including; belief, motivation, conflict, perception, cognition, information processing, learning strategies, socialization...
refers to negotiating strategies in which there is no real intention to reach compromise, or a model of information processing
Information processing
Information processing is the change of information in any manner detectable by an observer. As such, it is a process which describes everything which happens in the universe, from the falling of a rock to the printing of a text file from a digital computer system...
. The "inherent bad faith model
Inherent bad faith model
The inherent bad faith model of information processing is a theory in political psychology that was first put forth by Ole Holsti to explain the relationship between John Foster Dulles’ beliefs and his model of information processing....
" of information processing is a theory in political psychology that was first put forth by Ole Holsti
Ole Holsti
Ole Rudolf Holsti is an American political scientist and academic. He currently holds the position of George V. Allen Professor Emeritus of Political Science at Duke University...
to explain the relationship between John Foster Dulles
John Foster Dulles
John Foster Dulles served as U.S. Secretary of State under President Dwight D. Eisenhower from 1953 to 1959. He was a significant figure in the early Cold War era, advocating an aggressive stance against communism throughout the world...
’ beliefs and his model of information processing. It is the most widely studied model of one's opponent. A state is presumed to be implacably hostile, and contra-indicators of this are ignored. They are dismissed as propaganda ploys or signs of weakness. Examples are John Foster Dulles
John Foster Dulles
John Foster Dulles served as U.S. Secretary of State under President Dwight D. Eisenhower from 1953 to 1959. He was a significant figure in the early Cold War era, advocating an aggressive stance against communism throughout the world...
’ position regarding the Soviet Union, or Israel’s initial position on the Palestinian Liberation Organization.
See also
- Conflict resolution researchConflict resolution researchConflict resolution is any reduction in the severity of a conflict. It may involve conflict management, in which the parties continue the conflict but adopt less extreme tactics; settlement, in which they reach agreement on enough issues that the conflict stops; or removal of the underlying causes...
- Dispute resolutionDispute resolutionDispute resolution is the process of resolving disputes between parties.-Methods:Methods of dispute resolution include:* lawsuits * arbitration* collaborative law* mediation* conciliation* many types of negotiation* facilitation...
- NegotiationNegotiationNegotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective advantage, to craft outcomes to satisfy...
- Morphological AnalysisMorphological analysisMorphological Analysis or General Morphological Analysis is a method developed by Fritz Zwicky for exploring all the possible solutions to a multi-dimensional, non-quantified problem complex.-Overview:...