Monday, April 11, 2005

4 9

Roloff – 4/9

Course divided into two parts:

Distributive Bargaining - Win/Loss scenarios, zero sum game, my gain is your loss. Strength comes from number of alternatives each side has.

Function – We negotiate the ends of disputes as well as terms.
Preparation – Planning and preparation (knowing what goals of negotiation are) is the most desirable quality of negotiator, not glibness.
1. Bargaining Strategies – Exchange of offers and counteroffers – bidding behavior – a. Tough negotiation, e.g. level of aspiration theory (beat down the other side’s goals, and they will lower their aspirations) b. Moderately tough negotiation, e.g. fair bargaining, commitment strategy (delay to get the other party into time pressure, then make a take-it-or-leave-it offer when it is too late for them not to commit) c. Soft negotiation – Converting hostile parties into friendlies. (Being a nice person doesn’t work! Nice people are exploited because other party doesn’t know if they trust the friendly act, they assume a defensive position).
2. Argumentation Strategies – Deal with rationales, e.g. Relative advantage - my claim that my product is good is countered with a claim that my product is poor.
3. Coercion Strategies – The use of power. Face/credibility issues are at stake – “don’t make a threat you won’t carry out.” A last resort.

There will be a paper and bargaining simulation after the distributive bargaining section.

Integrative Bargaining

a. Dean Pruitt – Logrolling approach – trade-off of things that are unimportant to me but important to you for the reverse from you (e.g. salary for comp time). Win/win is possible. Not all situations have logrolling potential; salary may be a high priority for both parties.
b. Harvard – Principled Negotiation – Fisher and Ury, Getting to Yes. “Interest Negotiation” – interests are often assumed, or position (salary requirement) is confused with interest (standard of living the desired salary can afford). Interest negotiation takes resistance off the table, but if the other party refuses to bargain in an integrative way, Fisher and Ury can only suggest you turn the other cheek.
c. Roloff – Negotiation with Jerks - Roloff’s own work! ;-)
d. Third Party Negotiation – Arbitration - binding (can tell parties what to do) and non-binding (signals how a legal settlement would go, can keep cases off the docket) Facilitation – a third-party that helps the parties reach agreement, cannot suggest or evaluate settlements, Mediation – suggests and evaluates agreements.

Last Paper due on Integrative Bargaining.

Final lecture – Why marriage is screwed up (Can be hazardous to your health).

Distributive Negotiation

Sawyer and Guetzkow – Definition of negotiation

“A process by which 2 or more parties interact while trying to reach an agreement that will guide and regulate their future interaction.”

“Good Faith” negotiation (bad faith is defined by law) - when a party is trying to reach an agreement. If an offer were made and reneged upon, or foot dragging occurred before negotiation to apply time pressure, or if a party refused to meet at regular intervals, that party is showing signs of bad faith.

Metaphors: Negotiation is a…

Ritual – There are Roles, a Script (labor argues anecdotally, management argues with metrics), and Outcome is known (The artifice frustrates people).

Game – There are winners and losers, rules, strategy, and players who enjoy the game.

Tool – Used to achieve a goal (resource (tangible) and face-saving (intangible)), affected by the amount of effort applied, there are other alternative tools for the job.

Drawbacks of negotiation:

Inefficient – refusal to negotiate, coercion are more efficient
Opportunity Costs – e.g., negotiating is time consuming
Sets Precedent


Transfer – two parties make an exchange, each loses and gains
Sharing – cost: party could lose the capacity to make a profit, e.g. music, intellectual property like software
Generalized Exchange – Serial exchange, A gives to B who gives to C…but nothing is given back to A, or all give to A but A gives nothing to the others. No reciprocation, all one-way. E.G., Dad doesn’t expect to be repaid for kid’s college, but asks that he make the grandchildren’s lives better than his own. Kid is obliged to follow the path set forth by father, have kids and make money. “Pay it Forward” is a generalized exchange. Not common in the U.S., common outside of the U.S., may create cohesion in a society, embedded in a culture and can’t be negotiated.
Context – Peter Blau – Two types of contexts:
1. Social – Unspecified obligations, e.g. against the rules to tell a person what they owe you for a favor, an implicit understanding. There is an unspecified time for repayment. The norm of reciprocity has two rules – repayment can’t come too fast, but not too slowly either. A debt is related to power, so too fast repayment means that the one owing the favor does not want to endure being one-down, too slow repayment is deadbeat behavior (a way to make an enemy ineffectual is to overwhelm him or her with gifts, because while they are in debt to you they are obliged to speak well of you and act favorably toward you). Un-fixed Rate of Exchange, e.g. the value of one’s time, a “made gift” can be just as high as another’s’ time or purchased gifts. Non-repayment can result in stigmatization. Social obligations create feelings, e.g gratitude. Initiates a relationship. Social exchanges cannot be negotiated.
2. Economic – Specified obligations, specified time for repayment, fixed rate of exchange, one can be sued for non-payment. Impersonal, no feelings involved. No expectation of a relationship. Economic exchanges are totally negotiable.

c. Resources – Foa and Foy

x-axis – concrete-abstract
y-axis- universalistic-particularistic

Love = very particularistic, medium-abstract
Services = very concrete, less particularistic than love
Status = very particularistic, very abstract
Goods = very concrete, medium-particularistic
Information = medium particularistic, very abstract
Money = Very universal, medium-abstract

Foa and Foy recognize that their cognitive categories can be interpreted differently. A favor falls into one (or more than one) of those six categories.

particularistic . love

services . . status

goods . . information

universalistic money .

concrete abstract

For each resource there is an optimal range defined by a minimal amount at which you’ll want more of the resource, and a maximum amount at which you want to get rid of some of the resource (research indicates that there is no upper boundary for money).

d. Rewards – Value
- A shortage or perceived shortage can create demand.
- Satiation/deprivation – something becomes more valuable when we haven’t had it in a long time.
- Consensus – everyone agrees on value. Consensus sometimes conflicts with supply/demand, norms change to reflect supply/demand (e.g., the price of gasoline)
- Experts tell us what the value of something is, e.g. real estate appraisers. - Intrinsic properties of the resource, e.g. packaging of certain color or shape, and things associated with intrinsically valuable things take on their value, e.g. nostalgia of comic books, old vinyl records, et al.


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