Oil Pricing Exercise

SCENARIO:

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.

 

MECHANICS:

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.

 

TEACHING MATERIALS:

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)

 

PROCESS THEMES:

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

 

MAJOR LESSONS:

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.

Parker-Gibson

NEW – ALL-IN-ONE CURRICULUM PACKAGE 

If you are new to teaching negotiation or are looking to go in-depth on the fundamental negotiation concepts, the Parker-Gibson 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 Parker-Gibson. 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 Parker-Gibson 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.

SCENARIO:

The Parkers and the Gibsons own homes on adjacent plots of land. The homes are separated by a 1/2 lot the Parkers purchased years ago in hopes of building a tennis court, which they never got around to. The Parkers are now moving out of state and are interested in selling the half lot, as the buyer of their home is not interested in it. The Parkers have approached the Gibsons (who have interest in the lot for home improvements they have planned) about purchasing the lot. Neither party knows much about the other’s interests. The Parkers and Gibsons are meeting to explore whether a mutually beneficial transaction is possible.

NOTE: This exercise is a modified and improved version of a former exercise titled Appleton v. Baker (Appleton v. Baker is still available, upon request). This exercise is also analytically similar to the exercises The Book Contract (with a different setting) and Bradford Development (without the linkage payment).

 

MECHANICS:

The exercise is best run as a one-on-one exercise. Preparation should require 5-10 minutes. Negotiations can take from 10-30 minutes, and review from 30 minutes to 1 1/4 hours.

 

TEACHING MATERIALS:

  • Role specific:
    Confidential Instructions for:

      • Parker
      • Gibson

     

  • Teacher’s package:
    • All of the above
    • Teaching Note (English version only)

 

PROCESS THEMES:

Anchoring; BATNA; Fairness; Information exchange; Interests, dovetailing; Joint gains; Objective criteria; Offers, first; Pareto optimization; Quantitative analysis; Risk aversion; Trust

 

MAJOR LESSONS:

When several pairs negotiate this game at the same time, the resulting sale prices vary dramatically. Participants can then discuss how and why different negotiation strategies led to different outcomes.

Concepts of “fair prices” often surface in post-negotiation discussions. If participants do not take a “principled” approach to the negotiation, one side or the other often feels “taken,” especially when other players with the same role appear to do better.

The advantages and disadvantages of making the first offer can be explored, as well as techniques for doing so.

The advantages and disadvantages of truthfully revealing your BATNA can also be illustrated, especially when several pairs negotiate the exercise.

 

ENHANCED VERSION AVAILABLE:

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 Parker-Gibson Enhanced Package click here.

Parking Spaces for Super Computer

SCENARIO:

Super Computer Corp. just signed its second three-year lease for office space at 100 Blue Chip Street. This office building, managed by Prime Properties, houses the regional offices of several global corporations. Tenga Tenier (Super Computer's office manager) and Rom Rosok (Prime Properties' property manager for 100 Blue Chip Street) are about to enter their annual negotiation over parking spaces.

There is an executive parking lot underneath the office building, but this lot is not large enough to accommodate all of the building's tenants. Prime Properties offers a limited number of "executive" parking spaces in the underground lot, and a larger number of "satellite" parking spaces in a lot that is about ten minutes' walking distance from the building. Because Prime Properties charges the same lease price for executive and satellite parking spaces, tenants want to lease as few satellite and as many executive spaces as possible, while Prime Properties wants to lease as many satellite and as few executive spaces as possible.

Tenga and Ron must negotiate an agreement on two issues: how many parking spaces will Super Computer lease, and how many of those spaces will be in the executive parking lot underneath the office building? Their scores will depend on the final agreement on each of these issues.

 

TEACHING POINTS INCLUDE:

the value of exploring interests; the uses of objective criteria; the effect of aspirations on results; the power of trading across differently-valued issues; and the tension between creating and claiming value.

 

Teacher's Pack (26 pages total) includes:

  • Confidential instructions for Tenga Tenier and Rom Rosok
  • Score sheets for all participants
  • Teaching Note
  • Teaching overheads

Pepulator Pricing Exercise

SCENARIO:

The pepulator market is controlled by two giant companies: Pulsar Pepulator and Consolidated Pepulator. The monthly profits of both companies are determined solely by the price each charges and how it compares to the price of the competitor. Participants in this exercise act as the board of directors for each company, determining their company's price of pepulators for each of several months. They are instructed that maximizing profits is their sole objective.

 

MECHANICS:

This is a group exercise, with several people on the board of directors of each company. It is possible to have as few as three or as many as ten members of each board, though an average of six or seven members is most manageable. This is a time-slice game played in rounds, and it takes about 2-1/2 to 3-1/2 hours to run the entire exercise with review.

 

TEACHING MATERIALS:

For all parties:

  • General Instructions and Score Sheet
  • Monthly Price Report Message Form

 

Teacher's package:

  • All of the above
  • Draft Teaching Note

 

PROCESS THEMES:

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

 

MAJOR LESSONS:

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.

Restaurant Rancor

SCENARIO:

Casey Andrews and Kelly Handler have both worked in the American Cafe for about four months. They often work the same shifts and have become friends. Just today Casey complained to the manager about how tips are split. The current system is for waiters to pool their tips at the end of the shift and divide them equally. Casey has noticed that Kelly has been late recently, and that she has had to pick up the slack. Kelly is surprised to hear that Casey has problems with the tips. The manager told them that the restaurant will go along with anything that seems reasonable.

 

MAJOR LESSONS:

  • The power of good preparation is extremely clear.
  • Mutual feelings of betrayal by a friend complicate matters.
  • The two have to continue to work together and with the other people at the restaurant.
  • They have to come up with a policy for the entire wait staff.

Role Reversal Exercise

Free review copies of non-English Teacher’s Packages will be emailed upon request. Please contact tnrc@law.harvard.edu  or telephone 800-258-4406 (within the U.S.) or +1-301-528-2676 (outside the U.S.)

SCENARIO:

In this exercise participants select an actual negotiation situation from their own lives that they found particularly difficult, and negotiate in the role of their opposing party.

 

MECHANICS:

Preparation for this exercise takes 15 minutes. There are two ways to run the negotiation part of this exercise: one takes 60 minutes and the other takes 90 minutes. In the 60 minute version, half of the participants are given the opportunity to present a case. In the 90-minute version, all participants may present a case. The teaching materials are the same in both versions. Debriefing may take 30 minutes or longer, depending on the size of the class.

 

TEACHING MATERIALS:

For all participants:

  • Case Preparation Instructions

 

Teacher's Package:

  • Case Preparation Instructions
  • Teaching Note

 

PROCESS THEMES: Assumptions; Bias; Empathetic understanding; Framing; Partisan perceptions, implications; Preparation

 

MAJOR LESSONS:

The purpose of this case is to increase awareness of how the same "facts" can be perceived differently depending on one's point of view, and to stimulate thinking on the implications of partisan perceptions.

By approaching their cases from new perspectives, participants are able to recognize which of their current arguments are persuasive, and which are not.

Salary Negotiation

SCENARIO:

This case calls for fine interpersonal skills in balance assertiveness and relationship maintenance. What general guidelines seem applicable for preserving a good working relationship?

The problems of power imbalance, typical in employee relations, are highlighted.

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.

 

TEACHING MATERIALS:

Participant Materials:

  • General Information
  • Sandy Tanner, Director of Mail Order Sales
  • Pat Lynch, V.P. of Marketing

 

Teacher's Package:

  • All of the above
  • No Teaching Note currently available

Sally Soprano I

NEW – ALL-IN-ONE CURRICULUM PACKAGE 

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.

SCENARIO

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.

TEACHING MATERIALS 

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

MAJOR LESSONS

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.

SIMILAR SIMULATIONS

 

ENHANCED VERSION AVAILABLE

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.

Software Return

SCENARIO:

The complaints clerk in a retail software store sees a customer approaching, carrying a software package (without the box) that the store sold at a special price last week. The software cannot be returned to the manufacturer under these circumstances. The clerk has already exceeded their weekly returns budget. The customer has been unable to get the package to work.

 

MAJOR LESSONS:

  • The scenario makes it very easy to slip into an unprofitable negative mode of negotiation, based almost entirely on reaction. Unsatisfactory outcomes almost always result.
  • Those parties willing to consider the perceptions and interests of the other party as relevant can usually engage in mutually beneficial joint problem-solving.
  • The persuasive effects of threats, cajoling, anger, helplessness, looking pathetic, and other techniques can be explored.

Student Paper

SCENARIO:

Although a Professor has a "no-extension" policy, he has granted two extensions: one to a student who had a death in the family, and the other to a student unexpectedly admitted into the hospital. A third student is about to meet with the Professor also hoping for an extension. Passing the course is crucial for the student, but the excuse for lateness is not as serious as the precedents.

 

MECHANICS:

There is little factual preparation needed, but some strategic thinking is a good idea. The negotiation should last 5-15 minutes. Videotaping is useful for reviewing nonverbal communication.

 

MAJOR LESSONS:

  • This exercise can be used for a number of purposes. It was designed to explore psychological awareness and illustrate emotional reactions and nonverbal communication.
  • The problem tests skills in separating the people from the problem.
  • It also presents a temptation for misrepresentation that can generate appropriate discussion.
  • The salience of the issue for many participants tends to bring out their "natural" negotiating style for observation, analysis, and increased awareness.

 

TEACHING MATERIALS:

Role Specific:

Confidential Instructions for the:

  • Student
  • Professor

 

Teacher's Package:

  • All of the above

 

PROCESS THEMES:

Communication; Credibility; Education, as a means; Emotions; Ethics; Fairness; Interpersonal skills; Legitimacy; Misrepresentation; Nonverbal communication; Objective criteria; Personality; Power imbalance; Precedents; Psychological games; Relationship; Separating the people from the problem; Trust; Yesable propositions

Sue or Settle

SCENARIO:

Two surgeons mistakenly amputate the wrong (healthy) leg of a patient. They were found liable in a previous trial and ordered to pay $1 million in damages.

The controlling law in this case mandates a rule of strict contributory negligence. This means that whoever is found to be more responsible for the accident will have to pay the entire $1 million judgment. This exercise represents the current suit between the two surgeons to determine who will have to pay the judgment.

Each participant in this exercise plays either a surgeon or an attorney; and each surgeon-attorney pair is matched with a second surgeon-attorney pair in the lawsuit. The outcome of the lawsuit will be determined by comparing hands of playing cards. At each stage of the litigation, the surgeons must decide (with the advice of their attorneys) whether to proceed with the litigation or attempt to settle.

 

Teacher's Pack includes:

  • Confidential Instructions for the Client
  • Confidential Instructions for the Lawyer
  • No Teaching Note currently available

Telecom Services

SCENARIO:

Data Voice markets telecommunications ("telecom") services to residential and business customers. This year, a small firm called Consulting Integration needs to renew and adjust its telecom services contract with Data Voice.

This will be Consulting Integration’s second three-year telecom services contract with Data Voice. Technical specialist Robin Rigley represents Consulting Integration in the service contract negotiations, and regional sales manager Kelsey Kidd represents Data Voice.

Robin and Kelsey have to negotiate a difficult issue: the number of integrated voice/data/video workstation setups. With a large part of its business devoted to onsite client consulting, Consulting Integration does not currently require the integrated workstation packages that Data Voice offers. However, when Consulting Integration’s website improvements begin to expand its offsite consulting services, the need for integrated workstation packages may grow.

Before Data Voice expanded its telecom platforms, Data Voice lost many clients who preferred to maintain telecom service agreements with a single carrier. In response, Data Voice began to offer data and video telecom services, bundling them in package agreements like those of their competitors. Because of the additional networking hardware required to offer these services, Data Voice has had to expand its technical, operational, and customer service divisions threefold. Thus, Data Voice can no longer afford to continue contracts restricted to voice-only packages. As the regional sales manager, Kelsey Kidd is responsible for giving each client a “fair” number of voice-only packages. These "fair" numbers are based on the total number of workstations the client fits out, and on Kelsey's judgment of each client's need for voice-only setups.

Robin and Kelsey are about to meet to discuss their telecom services contract adjustment and renewal.

 

TEACHING POINTS INCLUDE:

  • Creating value in negotiation through trading on different priorities
  • Pareto optimization/ maximization
  • Tension between creating and claiming (or distributing) value
  • Effect of aspiration and reservation values on negotiated outcomes
  • Importance of responding and adjusting to new information in negotiation

 

TEACHING MATERIALS INCLUDE:

General Instructions:

  • For both parties

 

Confidential Instructions for:

  • Kelsey Kidd, Regional Sales Manager for Data Voice, Ltd.
  • Robin Rigley, Technical Specialist for Consulting Integration, Inc.

 

Teacher's Package includes:

  • All of the above

 

Terminal Lighting Problems

SCENARIO:

The light fixtures that were ordered for the new airport terminal projects have gone through a series of delays, and are now not coming at all. The Airport Authority's engineer just learned about this, but the contractor asserts that he sent a memo concerning the problem weeks ago. There is some disagreement over this issue. The terminal project needs the light fixtures in order to be completed on schedule. The two parties are meeting to discuss the problem.

MAJOR LESSONS:

  • Good preparation of the case requires accurate assessment of BATNAs, deciding what information to keep confidential, and anticipating the other party's demands.
  • The two parties have to work in order to get the terminal ready in time, despite hurt feelings concerning the problem.

Theotis Wiley

SCENARIO:

Theotis Wiley is a promising young basketball player with a checkered past. Erive is a small shoe manufacturing company about to launch a new line of basketball shoes. Erive’s Vice-President of Business Development has asked to meet with Theotis’ agent regarding the possibility of an endorsement deal. Neither party knows much about the other party’s interests or alternatives. NOTE: This simulation was adapted from, and is structurally similar to, the Sally Soprano simulation.

 

MAJOR LESSONS:

  • In this case, both parties have relatively weak BATNAs (“Best Alternative to a Negotiated Agreement”). The case affords a good opportunity to discuss the relationship between BATNA and reservation value (sometimes called a “bottom line”), and the effect of one’s BATNA — and of other party’s BATNA — on the negotiation process and outcome.
  • The available data allow a number of arguments about how much money a “fair” endorsement deal would involve. Participants can practice using objective criteria both as a sword and as a shield, and grapple with the challenge of judging the applicability of multiple objective criteria.
  • The case allows for the creation of various options separate from the contract value issue, which can maximize joint gains for both parties. While the case can be negotiated in a very distributive manner, by focusing only on the salary issue, there is ample room for integrative bargaining.
  • Each party in the case is privy to relevant information of which the other party is unaware, which allows for interesting learning points around information disclosure. On the one hand, substantive information exchange can facilitate value creation. On the other hand, by revealing too much information, on runs the risk of being exploited by the other side.
  • Because the case is structured as a negotiation between representatives rather than principals, it can generate useful discussion regarding the principal-agent tension and other agency issues.

 

TEACHING MATERIALS:

Confidential Instructions for:

  • Theotis Wiley’s Agent
  • Erive’s Vice-President of Business Development
  • Appendix for both parties

 

Teacher’s Package includes:

  • All of the above
  • Teaching Note

Three-Party Coalition Exercise

NEW – ALL-IN-ONE CURRICULUM PACKAGE 

If you are new to teaching negotiation or are looking to go in-depth on the fundamental negotiation concepts, the Three-Party Coalition 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 Three-Party Coalition. 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:

Three independent organizations, “A,” “B” and “C,” have sent representatives to a three-way negotiation. The representatives have learned that there are benefits to working together. If all three groups reach an agreement, benefits totaling 121 points will be split three ways (to be determined by the participants). If only two of the organizations reach an agreement, the total benefits to be split will be less than 121 (varying, depending on which two organizations join together) and the third party will be left with nothing.

You can see students practicing the Three-Party Coalition Exercise negotiation game in this free video:

MAJOR LESSONS:

  • The concept of BATNA can be examined, since each participant has the information he or she needs to calculate the expected value of various deals.
  • The power of seemingly “weak” players can be enhanced through the creation of blocking coalitions.
  • When played by several groups at the same time, the comparison of outcomes is effective.
  • The exercise can also be used to raise questions about the basis for arbitrating multi-party disputes.

 

ADDITIONAL NOTES:

For more information on the lessons of this game, see Howard Raiffa’s book “The Art and Science of Negotiation” (Harvard University Press), also available from the TNRC.

 

MECHANICS:

Time Requirements:

  • This exercise is designed for three participants. Preparation should take 5-10 minutes. Negotiations require 15-20 minutes; more time is useful.

 

Facility Needs:

  • Room with seating for multiple groups of 3. An overhead transparency projector is useful since some of the materials include transparencies.

 

TEACHING MATERIALS:

For all parties:

  • General Instructions

 

Teacher’s Package:

  • All of the above
  • Teaching Note
  • Overhead transparency masters

 

KEYWORDS/ THEMES:

BATNA; Closure; Coalitions; Competition v. Cooperation; Creativity; Currently perceived choice analysis; Decision analysis; Options, generating; Quantitative analysis

 

SIMILAR SIMULATIONS:

The Parking Facility Venture

Social Services

Rushing River Cleanup

Trademore Personnel

SCENARIO:

Ann Taylor, head of the Learning Box Division at Trademore Company is having problems with a senior manager, Terry Hall. She has asked one of her staff members to represent the division in a discussion about Terry Hall with a staff member of the Research and Development (R&D) division. Bill Blass, head of R&D is currently in search of an additional Specialist IV and is concerned about the time it will take to fill the position. The Human Resource Development Office (HRD) has heard about the scheduled meeting of the two departments and has proposed that an HRD staff person also attend.

 

MECHANICS:

Preparation for this simulation takes about 20 minutes, which includes enough time to read the material and discuss strategy. The negotiating time can run from 30 to 45 minutes. During the debriefing (approximately 30 minutes), participants should discuss actual and expected outcomes.

 

MAJOR LESSONS:

  • Comparing outcomes when two or more groups play the game allows participants to discuss the importance of strategy in negotiations.
  • The HRD intervenor may or may not choose to play a mediating role, or advocate the interests of the employee. Attempts to mix these two roles however, are likely to fail.
  • During debriefing, the impact of negotiating style and decision making processes should be explored.
  • The attitudes of the participants toward the fact that one of the department heads is a woman can be used to promote discussion on the connection between gender and negotiating styles.

 

TEACHING MATERIALS:

For all parties:

  • General Instructions

 

Role Specific:

Confidential Information for:

  • Representative for Ann Taylor
  • Representative for Bill Blass
  • HRD Staff Person

 

Teacher's Package:

  • All of the above

 

PROCESS THEMES:

Assumptions; Authority; BATNA; Closure; Communication; Confidentiality; Constituents; Cost-benefit analysis; Creativity; Currently perceived choice analysis; Ethics; Fairness; Gilligan, two voices; Information exchange; Interest dovetailing; Interests, quantifying; Joint gains; Managing uncertainty; Meaning of "success"; Mediation, negotiating entry; Message analysis; Misrepresentation; Objective criteria; Options, generating; Preparation; Reality testing; Relationship; Selective perceptions; Separating the people from the problem; Yesable propositions