Oil Pricing Exercise


Alba and Batia are two unfriendly oil producing nations that sell a significant amount of their production to nearby Capita. Anti-dumping agreements and Capita's alternate supply options limit Alba and Batia to prices per barrel of $10, $20, and $30. Each country's monthly profit can vary from $2 to $18 million per month, depending on the two country's relative prices and consequent Pricing Board of Alba or Batia. They are instructed that maximizing their own country's profits is their sole objective.



This is a group exercise, with several people on each country's Oil Pricing Board. It is possible to have as few as three or as many as ten members of each Board. The exercise is run in 8 or more rounds, corresponding to months, and takes 2 1/4 to 3 1/2 hours to run and review.



For all parties:

  • General Instructions and Score Sheets
  • Monthly Price Report Message Forms


Teacher's Package

  • All of the above
  • Teaching Note (English version only; non-English versions do not include teaching note)



Assumptions; Commitment; Communication; Competition v. Cooperation; Compliance; Constituents; Credibility; Decision analysis; Education, as a means; Ethics; Game theory; Group process; Group-think; Joint gains; Managing uncertainty; Meaning of "success"; Message analysis; Misrepresentation; Recurring negotiations; Risk aversion; Risk perception; Trust



This is a so-called "social trap" exercise, in which long-term maximization requires unenforced mutual trust where significant short-term gains are possible by breaking that trust. In most rounds, communication must be implicit, and is hence highly ambiguous and subject to misinterpretation, usually by the projection of negative and adversarial intentions that don't actually exist. At certain points, the parties are given the opportunity to communicate explicitly, and may choose to reach pricing agreements or not (and subsequently, to honor those agreements or not).

The exercise highlights the frequency with which we make imprecise and inadequately supported assumptions, suggesting the importance of making and keeping assumptions explicit and testing them periodically.

The danger of self-fulfilling assumptions is also illustrated. Parties can turn cautious competitors into the cutthroat adversaries they fear by proceeding with pre-emptive ruthlessness.

The difference between reacting to the other side's moves (or one's perception of what those moves mean or will be), and acting purposefully to influence the other side to (re)act constructively, is easily illustrated by comparing the experience of different teams. The monetary variation tends to be dramatic between cooperative and competitive games, and analysis usually suggests that to establish the former, some teams have to take a risk. Players face the tension between seeking high short-term gains and low short-term risk inherent in a competitive strategy, and lower but more stable long-term gains inherent in a cooperative strategy.

The exercise presents rich opportunities to observe, analyze, and critique intra-group dynamics and decision making.

Negotiation Pedagogy Video Series, Part III
This unscripted video, available separately, shows PON faculty member Sheila Heen running and debriefing the "Oil Pricing" exercise, interspersed with excerpts from a post-workshop interview with the instructor.
Order the video here.

Sally Soprano I


If you are new to teaching negotiation or are looking to go in-depth on the fundamental negotiation concepts, the Sally Soprano All-In-One Curriculum Package will provide you with everything you need to teach negotiation.

The All-In-One Curriculum Package makes it easy to teach negotiation, track learning outcomes, and includes materials for the instructor as well as for students.

Materials include: 

  • Instructor’s Guide – Guide for instructors on negotiation concepts, simulation logistics, and debriefing simulation participants.
  • Instructor Background Reading List – List of background readings for instructors to complete before using the simulation to gain a better understanding of the negotiation concepts.
  • Student Background Reading List – List of background readings for students to complete before the simulation to gain understanding of the negotiation concepts.
  • Confidential Role Instructions – Confidential role-specific materials for participants in the exercise.
  • Pre-Negotiation Surveys – After completing the background reading and/or presentation of the negotiation concepts, participants complete the online Pre-Negotiation Survey to benchmark their understanding of the key learning points the game is intended to teach.
  • Agreement Outcome Form – Participants reporting the results of any agreements reached in the simulation.
  • Post-Negotiation Survey – After finishing the simulation, but before the debrief, participants fill out the Post-Negotiation Survey so Instructors can gauge participants understanding of the issues and concepts.
  • Class PowerPoint Presentation – The first part of the PowerPoint slide deck is for the instructor to use to introduce negotiation concepts, how to participate in a negotiation simulation, and Sally Soprano. The second part is for the instructor to use in debriefing the simulation with participants.
  • Feedback Survey – At the conclusion of the exercise, participants can give feedback on the process and outcomes.

The Sally Soprano All-In-One Curriculum Package requires a minimum of 90 minutes of class time, but is best run in a two and half or three-hour class. To order this package, you must purchase a minimum of ten copies. A separate copy must be purchased for every participant in the exercise. The materials are all single use and must be re-purchased for subsequent uses.


Sally Soprano is a distinguished soprano who is now somewhat past her prime. She has not had a lead role in two years but would like to revive her career. The Lyric Opera has a production scheduled to open in three weeks, but its lead soprano has become unavailable. Lyric’s representative has requested a meeting with Sally’s agent to discuss the possibility of hiring Sally for the production. Neither knows much about the other’s interests or alternatives. There is a wide range of possible outcomes.

NOTE This exercise is a modified version of the exercise Sally Swansong I, developed by Norbert S. Jacker and Mark N. Gordon. Sally Swansong I is still available upon request. The Spanish, Swedish, and Dutch translations are based on the original Sally Swansong exercise. See also Theotis Wiley, a variation of this simulation set in the context of a potential endorsement contract between a basketball player and an athletic shoe company.


Materials for the standard version include:

  • Confidential Instructions for:
    • Sally Soprano’s Agent
    • Lyric Opera’s Business Manager
  • Post-negotiation handouts:
    • Some possible criteria for establishing salary
    • Some creative options
  • Teacher’s Package includes:
    • All of the above
    • Teaching Note

PROCESS THEMES Anchoring; Attorney/Client relations; Authority; BATNA; Bluffing; Confidentiality; Constituents; Fairness; Information exchange; Interests, dovetailing; Lawyering; Legitimacy; Meaning of “success”; Misrepresentation; Objective criteria; Offers, first; Options, generating; Pareto optimization; Precedents; Risk aversion; Risk perception; Systems of negotiation; Trust


This exercise is an excellent vehicle for comparing principled negotiation and positional bargaining.

The knowledge that one’s BATNA is weak often leads people to negotiate much less vigorously than they otherwise would. Is this ever justified? If so, under what conditions? The case affords a good opportunity to point out that any such analyses should be based on a consideration of the parties’ relative BATNAs.

The available data allow a number of more or less equally persuasive arguments about what a “fair” salary would be. This is at a minimum good practice in developing and using objective criteria. Beyond that, the case presents the more difficult challenge of finding an objective basis with which to judge the applicability of alternative objective criteria.

Good negotiators put the distributive issues in this case in perspective and reduce their importance by dovetailing interests with creative options that expand the pie. This case has an enormous potential range of such creative options.

Since the case does have a strong competitive element, there is ample opportunity to explore techniques for indirectly and directly extracting information from the other side. Likewise, techniques of protecting oneself from “giving up” the possibility for gains that were unforeseen can be explored and discussed.




A digitally enhanced version of this simulation is available through the iDecisionGames platform and includes the following features:

  • An Instructor’s Guide summarizing the negotiation concepts covered in the simulation, a quick review of simulation logistics, and a ready-to-use set of debriefing slides;
  • Highlights from background readings that will help both students and instructors gain a better understanding of negotiation concepts and methods covered in the simulation;
  • Pre- and post-simulation questionnaires instructors can use gauge each student’s grasp of the core concepts before and after participating in the simulation;
  • PowerPoint slides that introduce key concepts before the simulation and highlight lessons for debriefing;
  • Real time, interactive, data analytics provided via the iDecisionGames platform.

To order the Sally Soprano Enhanced Package click here.

Tulia and Ibad Mediation


Eight days ago, Tulian rebels attacked a police station in the Tulian President's hometown of Toji. In retaliation, Tulian troops attacked a rebel camp 20 miles inside neighboring Ibad. The troops were withdrawn, but yesterday rebel forces backed by Ibadi troops invaded southern Tulia and advanced on Toji with the announced intention of pressing on to the Capital to overthrow the President. The President has requested Organization of African Unity (O.A.U.) intervention, and the O.A.U. has called for a cease-fire and sent a delegation to a neighboring neutral country to meet with representatives of Tulia and Ibad.



Either party and/or the mediator can be represented by 1 to 3 participants. The materials include charts for Interests and Currently Perceived Choice analyses. These can take 15-60 minutes or more to prepare. The meeting itself should probably run at least an hour. Videotaping and/or close observation are essential for maximally effective feedback to the mediator.



For all parties:

General Information:

  • Chronology
  • General Background
  • Map
  • Positions and Interests Worksheet


Role Specific:

Confidential Instructions to the:

  • Ibadi Negotiators — with a Currently Perceived Worksheet for Tulia
  • Tulian Negotiators — with a Currently Perceived Choice Worksheets for Tulia and Ibad


Teacher's Package:

  • All of the above
  • Illustrative Completed Worksheets
  • Draft Teaching Instructions



Agenda control; Caucusing; Commitment; Communication; Compliance; Confidentiality; Constituents; Currently perceived choice analysis; Force; Issue control; Linkage; Mediation; Meeting design; One-text procedure; Options, generating; Political constraints, dealing with; Precedents; Public opinion; Reality testing; Risk aversion; Self-help; Threats; Time constraints



This is an good, straightforward mediation exercise in an international context. Detailed review of precise language, ordering of issues, use of caucuses, and framing of issues can be enormously rewarding. Close observation and/or videotaping is invaluable, although student-student review is also useful.

"Face-saving" and legitimacy are important factors in fashioning agreement that can be explored at length in review.

Considerable political and creative skill is needed to fashion a mutually beneficial option and present it in a politically acceptable package. "Issue control" is thus highlighted as a separate concept from the substance of any proposal.