Bruce PattonThree-party, scoreable, single-issue negotiation among three manufacturers over two- or three-party coalitions for complying with waste cleanup regulations; variation of Three-Party Coalition Exercise
Acme, Borland, and Chemco are three companies with neighboring manufacturing facilities each of which is under an E.P.A. order to clean up their waste discharge into the Rushing River. The cleanup process requires a treatment plant. The three companies could build individual plants or joint plants in any combination of two or three of them. There is no single salient criterion for splitting the costs, and all possible coalitions are unstable–subject to disruption by one party making an offer to another that should not, economically, be refused.
NOTE: The underlying mathematical structure of this case is similar to that of the exercises The Parking Facility Venture, Social Services and Three-Party Coalition Exercise.
This game is designed for three participants, one per role. Minimum preparation time is about 30 minutes; an hour or two is better. The negotiation can be scheduled for 15-30 minutes. An additional party can be added to the case as a mediator, either from the beginning or at any time during the negotiation. Before or after the negotiation, participants should be asked to read “Coalition Analysis,” Chapter 17 in The Art and Science of Negotiation by Howard Raiffa (Harvard University Press, 1982). The mathematical structure of the exercise is thoroughly and clearly discussed there.
- For all parties:
- General Instructions
- Teacher’s package:
- All of the above
- Teaching Note
BATNA; Caucusing; Closure; Coalitions; Commitment; Competition v. Cooperation; Creativity; Currently perceived choice analysis; Decision analysis; Game theory; Offers, first; Options, generating; Quantitative analysis; Time constraints
This exercise explores the dynamics of coalition formation in an unstable choice environment. When many groups do the exercise, the variety of outcomes can be used to explore the advantages and disadvantages of different negotiating tactics.
The power of seemingly “weak” players can be enhanced through the creation of blocking coalitions.
Howard Raiffa’s concept of “offers that cannot readily be refused” is illustrated in this exercise.
Rushing River Cleanup Attributes
- Time required:
- 30 minutes-1 hour
- Number of participants:
- Teams involved:
- Agent present:
- Neutral third party present:
- Teaching notes available:
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