$0.00 – $50.00
David Lax, James Sebenius, Lawrence Susskind, and Thomas Weeks
Two-party, multi-issue, scoreable negotiation between a manufacturer and a state environmental agency to reach a settlement over the manufacturer's pollution of a local river
Riverside Lumber is a pulp manufacturer in a small town in the Pacific Northwest. Riverside regularly dumps effluent into a nearby river. The Division of Environmental Conservation (DEC) claims that the effluent is toxic and jeopardizes the local salmon catch. Relations between the two parties have deteriorated. DEC has filed suit against Riverside in an attempt to close the plant. The trial date is three days away, and the parties are meeting to see if a last minute settlement is possible. Several issues will surface in the negotiation: Should Riverside be forced to purchase a special scrubber to neutralize the toxic effects of its effluent? Should Riverside be forced to close temporarily or permanently? Can DEC provide Riverside financial incentives to encourage cooperation?
- A discussion of the game, "DEC v. Riverside" — David Lax
- An analysis of players' scores from an actual run of the "DEC v. Riverside" role simulation, which is included in the video's teaching notes. (85 minutes)
The game can be played with one or two negotiators per side. No game manager is needed. Game instructions require at least 30 minutes to read. For thorough preparation, more time is suggested. Negotiations require at least 90 minutes; more time is preferable. Allow 60-90 minutes for review.
- Even though the two parties are likely to settle, the agreements they reach are typically far from optimal. Pareto-optimal scores can be displayed in this game. The players can then explore how and why superior agreements were not found. The concept of the pareto frontier can be developed.
- The concept of Best Alternative To a Negotiated Agreement (BATNA) is illustrated, since each side is given the information it needs to calculate the expected value of going to court. This can be compared to the value of possible negotiated agreements.
- Unless the parties cooperate (i.e., seek to respond to each other's most important interests), possible joint gains will be lost. The comparative advantages of cooperative versus competitive negotiation strategies can be illustrated. The tension between the urge to cooperate to claim value and the urge to compete to claim individual advantage is nicely illustrated. This allows for an extensive discussion of strategies for eliciting cooperation without making oneself vulnerable.
- The role of both shared and conflicting interests in creating joint gains is also illustrated. (Trading less important interests for more important interests is critical to achieving a pareto-optimal agreement).
For all parties:
- General Instructions
Confidential Instructions for:
- Riverside Lumber
Teacher's Package (55 pages total):
- All of the above
- Pareto curve
- Teacher's Note
BATNA; Bluffing; Communication; Competition v. Cooperation; Confidentiality; Constituents; Cost-benefit analysis; Decision analysis; Fairness; Information exchange; Interest analysis; Interests, quantifying; Joint gains; Litigation analysis; Managing uncertainty; Media; Meeting design; Misrepresentation; Negotiator's Dilemma; Objective criteria; Offers, first; Options, generating; Pareto optimization; Power imbalance; Pressure tactics; Reservation price; Risk perception; Systems of negotiation; Threats; Time constraints
DEC v. Riverside Attributes
|Time required:||2-3 hours|
|Number of participants:||2|
|Neutral third party present:||None|
|Teaching notes available:||Yes|