Three-party scoreable negotiation among three firms regarding the joint construction of an off-street parking facility; variation of "Three-Party Coalition"
SCENARIO:
Three firms (Arundel Products, Bartel Publishing and Chiptech) are building new facilities in a recently developed part of town. The city requires each of them to construct off-street parking for their employees. The firms have jointly hired financial analysts, architects and other specialists to describe and price their options. The firms recognize that if they pool their capital and operating resources, they can build one parking garage to serve all employees. However, if all three firms cannot come to an agreement, various joint ventures between any two of the firms would still save some money for the two participants, though not as much. The climate for coalitions are unstable because the goal of each company is to maximize its own interests and financial well-being.
NOTE: The underlying mathematical structure of this exercise is similar to that of the exercises Rushing River Cleanup, Social Services and Three-Party Coalition Exercise.
MECHANICS:
The three firms should meet together initially to introduce themselves and to formally start the negotiations. Once negotiations begin, there will be 15-30 minutes to try to reach an agreement. If two of the three firms wish to speak privately, the third firm may not interrupt for 5 minutes (although he or she may listen to what the others are saying). If an agreement is reached it must last 5 minutes before negotiations can conclude. Two of the firms can conclude the negotiations.
TEACHING MATERIALS:
For All Parties:
- General Instructions
Teacher's Package:
- All of the above
PROCESS THEMES:
BATNA; Caucusing; Closure; Coalitions; Commitment; Constraints, time; Competition v. Cooperation; Creativity; Currently perceived choice analysis; Decision analysis; Offers, first; Options, generating
MAJOR LESSONS:
The consequences of no agreement can be quite different in a multi-party negotiation compared to a two-party negotiation: BATNAs can shift and change. The power of seemingly "weak" players can be enhanced through the creation of blocking coalitions. A variety of tactics can cause parties to change their offers, close a deal, or break a deal. This game provides an opportunity to analyze the effect of coalitions on a negotiation, especially blocking coalitions. When the game is played by several groups at the same time, the comparison of outcomes is instructive.
Parking Facility Venture Attributes
| Time required: | 30 minutes-1 hour |
|---|---|
| Number of participants: | 3 |
| Teams involved: | No |
| Agent present: | None |
| Neutral third party present: | None |
| Scoreable: | Yes |
| Teaching notes available: | Yes |
