Development on Bay Island
SCENARIO:
Manatee Townhomes, Inc., has proposed a residential development for a harbor island in Bay City. Before proceeding it must obtain the approval of Bay City's Department of Streets and Thoroughfares. Streets and Thoroughfares will grant approval only if Manatee agrees to pay a sum money in the form of a traffic impact exaction.
In this exercise the two groups meet to determine the amount of the exaction. Manatee wants a low exaction in order to keep its profits high; Streets and Thoroughfares wants a high exaction in order to minimize future tax levies. There is a large zone of potential agreement ($3.8 million to $10 million), but neither side knows too much about the interests of the other side. There are few, if any, opportunities for joint gains.
MECHANICS:
- Divide the group into teams of one or two Manatee representatives and one or two Street and Thorough-fares representatives. Distribute the confidential instructions, and allow 20-30 minutes for reading the instructions, preparing strategies, and, if there are two-person teams, caucusing with teammates. Allow 30-45 minutes to negotiate the exaction. Debriefing should last for 30-60 minutes.
- This case has a wide zone of potential agreement where each of the parties has reason to misunderstand the interests of the other side. In this sort of situation, the first offer is often powerful in anchoring the decision, but making a first offer that is advantageous to one's own side is difficult without securing information about the other side's true interests.
- This case explores the advantages and disadvantages of sharing information. Since this is a one-issue case with a wide zone of agreement, gaining information about the other side is to one's advantage and revealing information about one's own side is a disadvantage.
- This case presents the opportunity to distinguish between distributive bargaining and integrative bargaining situations, and to consider negotiation tactics that might be useful in each situations.
TEACHING MATERIALS:
Role Specific:
- Confidential Instructions for:
- Department of Street and Thoroughfares
Teaching Package:
PROCESS THEMES:
Anchoring; Bluffing; Information exchange; Interest analysis; Interests, quantifying; Misrepresentation; Offers, first
SCENARIO:
Veritas and Pulchra are neighboring countries with a long history of friendly, mutually beneficial relations. Recently, however, relations between the two countries have been strained due to a catastrophic industrial accident wherein a concentrated form of the Class M chemical pesticide DS-30 leaked from a chemical plant in Veritas near the Pulchran border, adversely affecting a large tract of Pulchran farmland. To comply with Pulchran regulations on Class M pesticides, a significant amount of Pulchran wheat had to be destroyed because of excessive exposure to DS-30.
Compensation and emergency relief to affected Pulchran farmers are central issues in that country's upcoming elections, but the Pulchran National Legislature is unwilling to appropriate any money without first getting some commitment from Veritas to pay for the damage it caused. There are a wide range of standards that the two countries could use to determine the amount and nature of compensation. Because of significant political concerns, negotiators from each country's Foreign Ministry have been asked to meet and settle this case quickly.
MECHANICS:
The case is designed for one negotiator on each side, though pairing participants and running the case as a 2-on-2 negotiation can also work. The participants should take approximately 30 minutes to negotiate. A review and discussion period requires 45-60 minutes.
MAJOR LESSONS:
- This simulation provides a good vehicle for illustrating various negotiation strategies. There are a fair number of interests with varying intensities, some shared, some dovetailing, and others conflicting. Options for joint gain are plentiful.
- The range of possible agreements is wide; by comparing agreements the usefulness of generating options should emerge.
- It almost always pays to maintain cordial working relations with adversaries, even in the face of substantial disagreement. Energy should be focused on solving the problem, not "beating" the other side.
TEACHING MATERIALS:
For all parties:
The following materials may also be distributed as handouts at the end of the exercise:
- Some possible Criteria for Establishing Reparations
- Illustrative Preparation Memo
Role Specific:
Confidential Instructions for:
Teaching Package:
PROCESS THEMES:
Agenda control; Commitment; Information exchange; Interests; Legitimacy; Options, generating; Personality
SCENARIO:
Over the past eight months, Gadgets, Inc. (‘Gadgets’), a metal plating firm, has failed to comply with state regulations on the concentrations of copper and lead in their waste water. Gadgets' required monthly reports to the state Department of Environmental Protection (DEP) have been accurate, but the violations were overlooked by DEP for the first five months. When DEP noticed Gadgets' violations three months ago, it demanded immediate compliance and five months worth of fines.
Gadgets officials were surprised and upset. Citing economic hardship, past good faith efforts and its role in the local economy, Gadgets requested a delay in paying the fines while it explored options for rectifying its pollution problem. DEP initially agreed, but has now come under fire from environmental activist.
In the midst of this situation, the Innovative Technology Program (‘ITS’) of DEP has announced a new system for pollution prevention. ITS has been looking for a middle-sized firm to test its new system and DEP has ordered Gadgets to install this new system for further testing. The environmental activists now believe that Gadgets is getting off the hook, and that the system has not been sufficiently tested for use in a working firm.
Following the procedures of DEP's Innovative Technology Program, the Environmental Secretary's Special Assistant has called a meeting of interested parties to discuss four issues: (1) the choice of a pollution prevention technology; (2) a possible DEP subsidy for the installation of the new pollution prevention system at Gadgets; (3) the payment of fines by Gadgets; and (4) the frequency of and responsibility for monitoring of compliance by Gadgets. In addition to the Environmental Secretary's Special Assistant, the meeting will include representatives from Gadgets management, the Gadgets workers' union, two environmental activist groups, and the EPA.
MAJOR LESSONS:
This case provides a useful context for examining the dynamics of regulatory, particular compliance, negotiations. It also for examination of multi-party negotiation dynamics, such as coalition building and blocking, meeting design, and caucusing. Because there is a wide range of possible agreements, it can be interesting to compare agreements (and non-agreements) reached by different groups. The presence of scientific and technical uncertainty raises issues about the value of contingent agreement.
TEACHING MATERIALS:
For all parties:
- Schedule of potential fines for Gadgets Inc.
Role Specific:
- Gadgets Inc. Vice President
- Gadgets Inc. Workers Union President
- Chief Water Scientist for Newberg Bay
- Director of Deep Green environmental body
- Environmental Protection Agency representative
- Environmental Secretary Special Assistant
Teacher's Package:
KEYWORDS:
Multi-party negotiation; regulatory compliance; science-intensive policy disputes; environmental dispute resolution
GE International Contract
SCENARIO:
Several years ago, GE International purchased a networked computer system to serve all of its operating departments. Unfortunately, the computer system has become utterly ineffective. GE International's Senior Manager of Information Management Operations has been charged with finding an expert to divide and reprogram the computer system, rewrite the manuals, and maximize the value of the existing high-quality hardware and software.
The Senior Manager has located a computer consulting company that seems to be far better equipped than any of the alternative companies to handle this project. The consulting company, in turn, is eager for the publicity of working with a world-renowned company like GE International. At the last minute, the Senior Manager and the computer consultant realize that they have been exploring this contract without knowing that the other party had an enormously different idea regarding the appropriate price for the project. The parties are meeting one last time to see if there is a way to salvage the deal.
This case is similar to The Tendley Contract but takes place in a more corporate setting.
MAJOR LESSONS:
- This case is an excellent vehicle for comparing principled negotiation to positional bargaining.
- What are the advantages and disadvantages of revealing one's BATNA in this situation? How do the parties' BATNAs — and their disclosure or nondisclosure of them — affect the negotiation?
- The fact that there is such a huge discrepancy in what the two parties want GE International to pay for the job makes it very difficult to come up with a contract without generating creative options. What can the parties do to facilitate option generation?
- This case often generates discussion around "fair" pricing for the contract. What are some criteria for determining a fair price? Are the parties' initial expectations regarding the price relevant to what the price should be? Do the parties' BATNAs have any bearing on what the price should be?
TEACHING MATERIALS:
- Confidential Instructions for:
- Computer Systems Consultant
- GEII Team
- Teacher's Package includes:
- All of the above
- Teaching Note
SCENARIO:
George and Martha are about to be divorced, and have reached agreement on all issues but one–child support. They are in different tax brackets, and value child support and alimony differently. Both sides have chosen a representative to negotiate a decision.
MECHANICS:
Divide the class into teams of two, distribute the instructions, and allow approximately 10 minutes for participants to read and prepare a strategy. Following this preparation period, allow participants approximately 20 minutes to negotiate the case. Debrief the negotiation for about 45 minutes.
MAJOR LESSONS:
- This case illustrates the danger of single-issue bargaining. Should the participants limit the negotiation to a monetary dispute, George and Martha will be locked in a contest of wills. Hard bargaining may well emerge, resulting in a situation in which one party's gain means a corresponding loss to the other party.
- Despite George and Martha's diverging preferences in characterizing payments, it is possible to obtain mutual gain by trading on the two parties' attachments to their relative interests.
- This exercise demonstrates the feasibility of Howard Raiffa's notion of post-settlement settlement. As it is designed, the lesson points out that a "win-win" solution is possible when the parties closely analyze their interests and their potential for mutual gains. The failure to identify interests and invent options in a negotiation may lead to failure to reach any agreement, let alone an optimal one.
TEACHING MATERIALS:
Role Specific:
Confidential Instructions for:
Teacher's Package:
- All of the above
- Teaching Note
PROCESS THEMES:
Competition v. Cooperation; Creating and Claiming value; Financial analysis; Interests, dovetailing; Joint gains
NEW – ALL-IN-ONE CURRICULUM PACKAGE
If you are looking to go in-depth on the fundamental negotiation concepts and track learning outcomes, the Harborco All-In-One Curriculum Package will provide you with everything you need. The All-In-One Curriculum Package makes it easy to teach negotiation 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 Harborco. 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.
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.
SCENARIO:
Harborco is a consortium of development, industrial, and shipping concerns interested in building and operating a deepdraft port. It has already selected a site for the port, but cannot proceed without a license from the Federal Licensing Agency (FLA). The FLA is willing to grant Harborco a license, but only if it secures the support of at least 4 of 5 other parties: the environmental coalition, the federation of labor unions, a consortium of other ports in the region, the Federal Department of Coastal Resources (DCR), and the Governor of the host state. The parties have several issues to negotiate before deciding whether or not to approve the port, including the types of industries that will be be permitted to locate near the port, the extent to which environmental damage be mitigated, the extent to which organized labor will be given preference in hiring during construction and operation of the port, the amount of any federal financial assistance to Harborco, and the amount of any compensation to other ports in the region for potential economic losses?
MECHANICS:
This game is best played with 12 people (2 per role) although 6 people also works. A game manager is needed to conduct periodic votes and to answer questions. Game instructions require at least 30 minutes to read; more preparation is helpful. Negotiations require a minimum of 2 hours. However, the more time allowed for negotiation, the better.
MAJOR LESSONS:
- When the game is played by several groups at the same time, the comparison of outcomes is instructive. Typically, some groups will reach agreement and some will not. Very few groups will reach unanimous (6-way) agreement.
- Players are exposed to elementary utility analysis in the point scoring scheme. The importance of pre-negotiation analysis in evaluating options is illustrated. The players can then explore how and why different negotiating strategies led to different outcomes.
- Multi-issue, multi-party negotiations tend to involve the formation of coalitions–especially blocking coalitions. This game provides an instructive context for exploring coalition strategies.
- Parties that reveal their true interests do not necessarily do better than those who remain silent or bluff. The advantages and disadvantages of revealing all one’s concerns are illustrated in this game.
- Pareto-superior and Pareto-inferior agreements are illustrated by the scores.
- When 12 players play the game (2 per role) they have an opportunity to explore the special difficulties of negotiations involving non-monolithic parties.
- The need for a neutral “process manager” of some sort is also illustrated, as the parties struggle to structure their discussions.
- The advantages of caucusing can be explored. In some cases, players will initiate caucuses; in others, they will avoid private caucusing.
TEACHING MATERIALS:
For all parties:
Role specific:
Confidential Instructions to the Negotiator for:
- Harborco
- Other Ports
- Environmental League
- Union
- Federal DCR
- Governor
Teacher’s package (67 pages total):
- All of the above
- Teaching Note
- Game Review Chart
Please note that this exercise is included in the Resolving Public Disputes package, also available through the Clearinghouse.
PROCESS THEMES:
Agenda control; Authority; BATNA; Bluffing; Caucusing; Coalitions; Commitment; Communication; Competition v. Cooperation; Constituents; Delay tactics; Information exchange; Joint gains; Media; Mediation; Meeting design; Misrepresentation; Monolithic vs. non-monolithic parties; Objective criteria; Offers, first; Pareto optimization; Political constraints, dealing with; Pressure tactics; Reservation price; Systems of negotiation; Time constraints; Utility analysis
SCENARIO:
The Hong Kong Property Deal is a simple two-party negotiation that appears to have a single distributive issue (price), but contains several hidden issues that offer integrative opportunities.
The simulation is set in Hong Kong in 1996, just before the British returned Hong Kong to the People’s Republic of China. Lee Wing and Terry Jones each operate a business next door to each other on Tai Po Kau Harbour Road. Between their two businesses is a small lot that is unattractive as a separate building site because it sits between two large warehouses. Lee Wing purchased the small lot in 1990 for $70,000 with the intent of expanding his warehouse. These plans were never realized, and the lot is currently vacant.
Wing has decided to move to Australia, and has arranged to sell his construction material importation business to a family friend, Bill Ling. Ling has gathered the necessary funds to buy Wing’s business and warehouse, but can only offer $50,000 for the small vacant lot (which he neither particularly needs nor wants).
Terry Jones conducts the Hong Kong business for Australian-based Outback Foods from the lot on the other side of Wing’s vacant lot. Unbeknownst to Wing, Outback Foods is having great success in Hong Kong and could use some extra space to expand its warehouse. Indeed, Terry Jones has a budget of up to $200,000 to purchase additional space for a warehouse.
Wing called Jones yesterday, and the parties are about to meet.
This case allows for the introduction of several fundamental negotiation concepts:
- Bargaining range (both positive and negative bargaining range); also known as zone of possible agreement (ZOPA);
- First offers in a distributive negotiation: how and when to present a first offer;
- Gathering information to determine the other party’s intentions and goals;
- Managing information about our own intentions and goals; and
- Introduction to integrative strategy.
Teacher’s Package Includes:
- Confidential instructions for Lee Wing
- Confidential instructions for Terry Jones
- Teaching note
SCENARIO:
Lattitude.com is a simple two-party, single-issue, primarily distributive negotiation regarding the potential sale of an internet domain name. It is designed to be negotiated entirely via e-mail, and may either be used in an online course or as a supplement to a face-to-face course. This simulation is a good vehicle for discussing the dynamics of distributive bargaining as well as the effect of the communication via email on both process and outcome.
Participant’s materials include:
- Confidential instructions for the potential seller
- Confidential instructions for the potential buyer
Teacher’s Package includes:
- All of the above
- Teacher’s note
NOTE: The time required refers to actual online negotiating time, but that this simulation is typically conducted over several days of asynchronous e-mail communication.
PLEASE NOTE: This role simulation was updated in 2005 with higher dollar figures, to make it seem more realistic and worthwhile. The older version with the original dollar figures is available upon request.
SCENARIO:
Burns & Burns, a law firm, is splitting into two new firms, the smaller of which wants to sell 300 volumes from its library that form a set on a specialized topic. So far they have not received any particularly attractive offer. The small law firm of Jones and Solomon is now interested. Purchasing these books as a used set could save Jones & Solomon money over assembling a new library. Two young lawyers are meeting to discuss whether a deal is possible.
MECHANICS:
The exercise can be run in a one-on-one or two-on-two configuration. Negotiation time can range from 20-45 minutes; 30 is usual. Preparation time can be as little as 30 minutes, but it is helpful to allow time for a little outside research on the law book industry. Review can range from 30-90 minutes, and is enhanced by participant demonstrations. These can be new negotiations between people who have just done the negotiation, but not with each other, negotiations between participants who have held off negotiating until this time, or continuing negotiations between participants who have been unable to settle. Both during the basic negotiations and any demonstrations, one or both negotiators can be given additional instructions on the style of negotiation to employ.
MAJOR LESSONS:
- This is an excellent case for exploring the uses of objective criteria. A variety of criteria can be gathered from the case and outside research, and others, with a little thought, can be inferred.
- This case is also a convenient vehicle for exploring different systems of negotiation and how they fare against each other.
- The relationship of BATNA to bottom line is easily illustrated here.
- The case suggests how seldom one encounters a true single-issue negotiation. A little reflection suggests the presence of significant opportunities to expand the pie. In particular, the possibility of establishing an ongoing relationship that might lead to client referrals merits careful consideration.
TEACHING MATERIALS:
For all parties:
- List of Some Possible Objective Criteria
Role Specific:
- Confidential Instructions for the:
Teacher's Package:
PROCESS THEMES:
Anchoring; Authority; BATNA; Constituents; Cost-benefit analysis; Information exchange; Lawyering; Legitimacy; Meaning of "success"; Objective criteria; Offers, first; Options, generating; Relationship; Reservation price; Systems of negotiation; Yesable propositions
Live-Mediation Teaching Video
The Negotiation Pedagogy Initiative at the Program on Negotiation (NP@PON) produced video of an actual landlord-tenant small claims mediation – from start to finish, including side bar conversations – for its 2009 Mediation Pedagogy Conference. It is rare that an actual (as opposed to staged or acted) mediation is available for instructional purposes. Of the many different styles of mediation that could have been employed, this is just one example – an unscripted video showing how one professional mediator handled a real small claims mediation. The mediator in this case is Charles Doran, Executive Director of Mediation Works, Inc. (MWI) in Massachusetts.
Two versions of the live mediation are available for purchase from the Teaching Negotiation Resource Center (TNRC). The edited 25-minute version can be downloaded for $100. The full, unedited 90-minute version can be downloaded for $200.
In May 2009, the Program on Negotiation hosted the first Mediation Pedagogy Conference. A Podcast captures some of the attendees’ reflections throughout the conference. Running time is 27 minutes. Click here to listen
Matter of Arthur Hangtough
SCENARIO:
Arthur Hangtough has been employed by Enterprise Manufacturing Corporation (EMC) for 15 years. He currently holds the position of Vice President for Personnel and Labor Relations. The new company president has threatened to discharge Hangtough, who has no employment contract; Hangtough claims he would fight a discharge.
The president is concerned about Hangtough because of the possibility of his involvement in a conflicting commercial venture, failure to meet ostensible performance objectives, and recent sexual harassment charges filed against Hangtough. Hangtough claims that he is being attacked unfairly because he insists on avoiding any legal hedging at work. He also alleges that he is being discriminated against because of his age.
Unbeknownst to EMC, Hangtough wants to leave EMC immediately to accept a better job offer. Unbeknownst to Hangtough, EMC wants Hangtough to leave immediately in order to hire a promising new employee. In this context, two attorneys for EMC and two attorneys for Hangtough are meeting to discuss the issue of Hangtough's potential termination.
MAJOR LESSONS:
- Both parties want to have the termination issue settled immediately, without revealing their reasons to the other side. This raises interesting questions about the effect of time pressures on the negotiation.
- Each party has information about which the other party is unaware. How does one decide when, how, and what to disclose?
- Both parties have very different narratives about Arthur's employment history, and different viewpoints about what should be done going forward. Is it possible to reconcile these narratives? Is it necessary? Does the outcome somehow reflect one or both narratives.
- Each party has a potential legal "threat" against the other: EMC has a potential sexual harassment claim against Hangtough, and Hangtough has a potential age discrimination claim against EMC. What effect did the existence of these potential claims have on the negotiation dynamics — whether or not they were voiced explicitly?
Teacher's Package includes:
- Participant materials only
SCENARIO:
The Federal Republic of Meridia, located in Central America, is negotiating to sell off-shore oil leasing rights along its Eastern coast. the capitol of Meridia, Quintaro, is on the Western coast. Its population is 500,000. Meridia's Western coast already has a number of off-shore drilling facilities, but this would be the first in the East. The Government has high hopes about the effect these newly discovered oil fields will have on that region. The city of Guaca, which dominates that region, was just involved in a six-year civil war. Meridia has many offers by contenders. Petrocentram, from Venezuela, is one of those three.
Negotiations between Meridia and Petrocam have been going on for about a month. A "final" negotiation session is about to begin. If a decision is not reached today, Meridia will begin negotiations with other companies.
MAJOR LESSONS:
- This exercise is an excellent vehicle for comparing principled negotiation and positional bargaining. Depending on the skill of the other negotiator, both approaches can do well. Both parties should be risk averse, however, and wary of an adversarial approach that might get out of hand.
- 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 presents a good opportunity to point out that any such analysis should be based on a consideration of the parties' relative BATNA's.
- 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.
SCENARIO:
A Vermont farmer somewhat interested in the possibility of expanding activities has considered going into maple syrup production, wood cutting, or increasing the farmer's cow herd. The farmer's neighbor is a person from Boston who only comes up on occasional weekends and holidays and is currently interested in selling or leasing at least part of the property. In preliminary discussions, the two have differed significantly on their assessments of the land owned by the Bostonian, but have agreed to meet and discuss the situation further.
MECHANICS:
This exercise is usually conducted one-on-one for about 45-60 minutes. With a bit more time, participants can be asked to spend some time drafting a written agreement. Communication with unresponsive parties can be explored in review by modeling a typically smart, but cautious Vermont farmer of few words. Review should take from 60-90 minutes. Asking each participant silently to jot down the points of their agreement usually highlights the imprecision and ambiguity of most oral negotiations.
MAJOR LESSONS:
- This negotiation focuses squarely on interests, options, and objective criteria. Positional bargaining is virtually certain to leave large potential joint gains unrealized. On the other hand, there is the challenge of engaging in joint brainstorming without unintentionally committing oneself.
- While a variety of options seem likely to be of mutual benefit, most require additional information for full analysis and decision-making. This raises nice questions of how to structure contingent decisions under uncertainty, and how to build in appropriate incentives for objective information-gathering.
- Poorly thought out agreements often ignore important unknowns and details of implementation. Clear thinking suggests setting realistic expectations about what can be accomplished in the meeting. Agreements will tend to vary dramatically in their scope.
TEACHING MATERIALS:
Role Specific:
Confidential Instructions for the:
Teacher's Package:
PROCESS THEMES:
Agenda control; BATNA; Closure; Commitment; Creativity; Information exchange; Interest analysis; Interests, dovetailing; Joint gains; Managing uncertainty; Objective criteria; Options, generating; Pareto optimization
SCENARIO:
T. Boyd, a Vice President of Budget and Finance at Multimode, Inc., (a manufacturing firm) is about to meet J. Arnold, a Vice President of the Human Resource Development Office at Multimode. T. Boyd has formally met with other departments to discuss the upcoming year's budget as well as expected productivity increases. The maximum allowable budget increase has been set at 5%. In order to implement a new reorganization plan, J. Arnold is requesting an 8% increase.
MECHANICS:
This game is designed for two players. Reading and preparation takes approximately 15 minutes and actual play of the simulation runs about 30 minutes.
TEACHING MATERIALS:
-
- Role specific:Confidential Instructions to:
PROCESS THEMES:
Closure; Commitment; Communication; Constituents; Cost-benefit analysis; Fairness; Financial analysis; Legitimacy; Meaning of "success"; Nonverbal communication; Objective criteria; Partisan perceptions; Precedents; Relationship; Reservation price
MAJOR LESSONS:
In post-negotiation discussion, participants may review the advantages and disadvantages of truthfully revealing their bottom lines.
The parties presume there is a gap between what one can offer and what the other can accept. In fact, there is an overlap. Their initial perceptions shape their subsequent efforts to probe for information.
The degree to which issues other than the percentage increase or cut should come into play is a useful focus for a discussion of good "outcomes".
SCENARIO:
Programmer Lance Goodman is developing a new internet meta-search engine called MultiSearch. He would like to turn over the support and marketing of MultiSearch to a professional firm, so that he can devote more time to other projects. Sue Edwards, Vice President of Business Development for respected software firm Jack Carnie Inc., is looking for a new internet product to add to the firm's portfolio. The two are meeting to discuss the possibility of Jack Carnie Inc. acquiring and marketing MultiSearch. Each party (unbeknownst to the other) has a strong incentive to reach a deal.
Teaching points include: reaching agreement within a large ZOPA; methods for dealing with differing interests around nonmonetary options such as timing; potential value of contingent agreements.
Teacher's Package includes:
Confidential instructions for:
- Lance Goodman and Sue Edwards
- No Teaching Note available
Negotiated Development in Redstone
SCENARIO:
The grandchild of the founder of the city of Redstone has proposed building an up-scale condominium project. This has been encouraged by the Redevelopment Authority. Rumor has it that the plans include 120 units, street level commercial businesses, and a parking garage. The City Council is opposed to the project. A Neighborhood Association, including supporters of the "slow-growth" platform on which the Council was elected, is very upset and has articulated its opposition to the plan. In addition, the down-zoning laws in Redstone allow the developer of the proposed project an "as of right" density of only 50 units. However, the developer can negotiate for a higher density by offering to exceed the 10% affordable housing requirement set by the city. The City Council has urged that a representative from the Neighborhood Association and the developer meet to try to reach an accord. If no agreement is reached, the dispute will go to the City Council and the Redevelopment Authority (which are at odds).
MAJOR LESSONS:
- Importance of pre-negotiation analysis: It is important to prepare for a negotiation and particularly to identify both aspirations and BATNA's.
- Distributive vs. Integrative bargaining differences: The participants have an opportunity to analyze the differences between distributive and integrative bargaining.
- Potential Joint Gains: Focusing on issues that are valued differently will allow participants to assess the importance of trading across issues to reach an agreement.
ADDITIONAL NOTES:
A variation of this exercise entitled Ocean Splash is also available from the Clearinghouse.
Estimated Time Requirement:
This scorable game takes about 10 minutes to read. Preparation should take approximately 15-20 minutes. The parties are given a chart to assess their scores for all possible agreements. The negotiation should take from 30-45 minutes. At least 30 minutes should be allocated for debriefing.
TEACHING MATERIALS:
For all parties:
Role specific:
Confidential Instructions and Scoring Charts for
Teacher's package:
KEYWORDS/ THEMES:
Anchoring; BATNA; Bluffing; Closure; Community development; Constituents; Creativity; Currently perceived choice analysis; Interests, dovetailing; Land Use Negotiation; Linkage negotiation; Meaning of "success"; Misrepresentation; Monolithic vs. non-monolithic parties; Offers, first; Political constraints, dealing with; Precedents; Pressure tactics; Public dispute resolution; Public opinion; Reservation price; Risk aversion
SIMILAR SIMULATIONS:
Parking Spaces for Super Computer
