Two party, multi-issue negotiation
The fruit example
1B&2O (Sam who hates banana) vs. 1P&2A (Willy who hates pear)
•Minimize # of disliked fruit
•Maximize # of preferred fruit
•Maximize variety of fruit
Increasing
Value to Sam
1P 1A 2O
Claiming
Value
Creating
Value
P-B & A–O trade
Willy=1B 1O 1A
Sam=1P 1O 1A
Pareto
Efficient
Frontier
1P 2O
P- B trade
1B 2O
1P 2A
1B 2A
1B 1O 2A
Increasing
Value to Willy
Differences in Conceptions of Negotiation
Value Creators
(cooperators)
Value Claimers
(competitors)
Win-Win
Win-lose
e.g., sell car for as much as you can
vs. buy car for as less as you can
Communicate/Share information
Conceal information
Discover joint interests and gains
Sam has 1B-2O but hates B
vs. Willy has1P -2A hates P
Minimize other party’s concessions
and maximize value of own
concessions
Maintain relationship
Make threats, extreme commitments
to own positions, argue forcefully
• Negotiation involves BOTH value creating
and value claiming
– e.g., Pie has to be enlarged, but it still divided
and each piece must be claimed. If the pie is
not enlarged, there will be less to divide (i.e.,
there is more value to be claimed if one has
created it – so don’t be shy!)
Negative Effects of Value Claiming Strategies
• Minimize other party’s concessions & Maximize value
of own concessions 
misrepresent one’s own
preferences
• Make threats, extreme commitments to own positions
•
impedes understanding of other’s
interests
Conceal information–> leaving joint gains @
table
• Sours relationship, reduces trusts
Negative Effects of Value Creating Strategies
• Can lead to tactics of claiming value
– Share Information about one’s relative
preferences is risky
• They can exploit you on an issue you care about
even if they don’t care about it…
– Being creative may signal that you are
willing to make more concessions
– Disclosing that you have shared interests 
used as leverage to gain concessions (e.g.,
child custody vs. alimony)
Negotiator’s Dilemma
(compare with Prisoner’s Dilemma)
Party 2 Tactics
Create Value
Create Value Party 1=Good Outcomes
Party 1
Tactics
Claim Value
Claim Value
Party 1=Bad Outcomes
Party 2=Good Outcomes
Party 2=Great Outcomes
Party 1=Great outcomes
Party 1=Mediocre outcomes
Party 2=Bad Outcomes
Party 2=Mediocre Outcomes
Negotiator’s Dilemma vs. Prisoner’s Dilemma
• Prisoner’s dilemma does not have
communication between parties
• Typically single round
• Parties cannot make commitment to
cooperate before making choices
Managing Value Claiming vs. Value Creating
Strategies
• Do better than no-agreement
– Fruit example
• Deep understanding of own & other’s
interests and making tradeoffs between
them
– What are ‘interests’?
• http://youtu.be/6OPzgWIAGao (until 3.00 min)
• Convert own and other’s interests into
joint gain
• More on the pareto efficient frontier
• http://youtu.be/6OPzgWIAGao
• Fairness vs. efficiency
Managing Value Claiming vs. Value Creating
Strategies: Cont’d
• Add new issue (expand pie)
– http://youtu.be/rJEOylZCUUs
• Some terms to learn
– Interests= why you want what you want
– Issues =what you want
– Position= Your point of preference on the
issue
– e.g., want 40K on salary in video example
» Interest= to pay of student loan which can be
satisfied with a different issue (i.e., signing bonus)
Issues vs. Interests
• Interests can be satisfied with different
issues
• Different issues can represent the same interests
• Seeing interests as perfectly aligned with
positions on issues, makes it less likely to
shift positions on issues and more likely
to forgo better outcomes for themselves
or mutually beneficial outcomes
Types of Interests
–
Parties Can have more than one interest at a
time
Parties can have differing interests
Interests are often based on values
–
–
•
–
E.g., recognition, safety etc.
Can change over time
So…
Clarify own AND others’ interests
•
•
•
Ask why,
differentiate b/w intrinsic and instrumental
Need not be to one’s best advantage (objective vs.
subjective)
Types of interests: Intrinsic vs. Extrinsic
Interest
Intrinsic
Extrinsic (instrumental)
Substantive
Satisfaction of
doing well
Use gain or outcome
for another purpose
Process (how to e.g., playing a
resolve)
competitive
game
Relationship
Value it for
(do not want to
itself
Gain influence/voice
in org
(economic or
financial issues)
Get positive benefits
from relationship
damage
relationship)
Principle (what Resonates
is fair/right)
w/core values
Can learn for other
situations
*Single, multiple, single  multiple
Define
Issues
*Research to gather info, consult with experts in area of issues
Define the
Mix of issues
Connections b/w issues
Articulate the ‘why’ for issues, value interests (even intangible ones), distinguish
issues from interests
Define
Interests
Types (Substantive, process related, relationship based), intrinsic vs. extrinsic
Identify Limits
& Alternatives
Set targets
value issues objectively
Resistance point
BATNA (is negotiated agreement better than non agreement than agreement
with another?)
*Target point
*Opening Bid
*Range
*Specific, difficult but achievable, verifiable
*Different ways of packaging issues (Trade-offs)
Valuing Own Interests
• Generate assessments of intangible
interests (order of magnitude)
• E.g., suffering vs. comforts gained in certain
issues
• Decide the priority of intangible interests
• Use secondary priorities on interests
when packages become equal
Assessing Other’s Interests
• Remember that interests depend on
subjective perceptions so PROBE via
communication, and research (with third
parties, previous behaviors,
organizational information etc.)
• Issues and interests can change over the
negotiation
Tradeoffs
• Decide on what / how much of a tradeoff
on issues is desirable
• Interest rate vs. purchase price example
– Specify worst vs. best outcomes on each
issue, define possible increments
– Compare increments by thinking about
interests and which increments are most
valued
– Break increments into smaller pieces and
compare relative evaluation
– Assess interest tradeoffs using above logic
When to focus on Issues vs. Interests
• Focus on interests helps creativity and
helps reformulate issues to better align
with interests
• Focus on issues when the interests are
based on conflicting values
When you meet the other party
I.
II.
III.
IV.
Identify & Define problem together
Identify needs/interests
Generate alternatives/solutions to problem
Evaluate alternatives and select best one
Steps in Integration Process
I.
Identify & Define problem- together
•
•
•
•
•
Mutually acceptable definition
Make it simple (identify linked vs. separate issues)
Frame as goal & Outline addressable obstacles
Separate person from issues
Develop standards to assess quality of agreement
IV. Evaluate & Select Alternatives
• Evaluate on Quality and Acceptability
• Decide on objective criteria before negotiation,
periodically verify priorities
• Articulate your reason for interests
• Be aware of, and discuss intangibles
• Subgroups for complex issues
• Things that make integrative negotiation
happen!
–
–
–
–
–
–
–
Sharing a common goal/objective
Problem solving ability
Valuing own & other’s position
Motivation to work together
Trust
Clear & Accurate communication
Understanding dynamics
• Things that prevent integrative negotiation
– Relationship history
– Belief in resolving issue distributively
– Mixed motive features