Pemberton’s Dilemma

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Pembertons Dilemma
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Introduction This exercise creates a situation
in which you and the others will be making
separate decisions about how to manage your firm.
The outcomes (profits and losses) are determined
not only by what you do, but also by a number of
other factors such as the goals and motives that
you and the other party have and the
communication that takes place between you and
them.
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• Procedure
• Divide your groups into two management teams
  (Country Market Corner Store)
• Prepare sheets of paper for each management team
  one ½ crosswise (tally sheet) and two ¼ sheets
  (decision cards)
• Represent your store in discussions with the
  other store about the decision to operate (or
  not) during Sundays

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• Procedure
• There will be 12 one-minute rounds where stores
  will simultaneously decide whether they will open
  or not
• You execute your decision by revealing to the
  other team the appropriate card (open or
  closed) at the same time that the other team is
  revealing their card to you.

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• Procedure
• Each round represents one Sunday every 4th
  Sunday is part of a long weekend
• A two-minute confidential planning session
  separates each Sunday
• The two teams may, if they so desire, negotiate
  with each other for 3 minutes IMMEDIATELY
  FOLLOWING WEEKS 4 AND 8 ONLY.

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• Relevant Information
• Commercial activity in Pemberton has been
  prohibited during Sundays
• Sunday shopping has been permitted in the
  metropolitan center just 30 minutes away
• Both Country Market and Corner Store have been
  consistently losing potential profit as Sunday
  shopping becomes more popular

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• Relevant Information
• If both stores remain closed on a Sunday, each
  will have the usual 20,000 weekly profit
• If only one store opens on a Sunday, it will earn
  a 40,000 profit for that week while the other
  store will incur a 40,000 loss
• If both stores decide to open on a Sunday, each
  will incur a 20,000 loss for that week

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• Building Your Team Strategy
• After reading the instructions/relevant
  information, answer 2 questions with your team
• What are your objectives for this game? (what
  for)
• What are the moves that you will make to meet
  these objectives? (how)

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Pay-off Chart
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Sample Tally Sheet
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Debrief Review the outcomes from summary table-
what do we see? a/Both high and positive
scores-usually a strong cooperative pair b/Both
moderate scores-often a group that learned to
cooperate c/ Both low scores-usually a
competitive pair d/ Groups with large difference
between scores-one group took advantage of the
other
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• Dilemma Characteristics
• Individual choices reflected in joint outcomes
• Interdependence affects outcomes Payoff to self
  is the only reward (lack of concern for the
  other)
• Mutual Adjustment Influence on negotiating
  partner- change over time
• Value Claiming and Value Creating which is the
  more prominent goal
• Lack of Direct communication, ability to make
  binding agreements, trust

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• Can the Dilemma be avoided?
• Lengthen the shadow of the future (repeated
  rounds)
• Use Sophisticated Strategies
• Use knowledge of the other- probability of the
  others move
• OR

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• Can the Dilemma be avoided?
• Interdependent When the parties depend on each
  other to achieve their own preferred outcome they
  are interdependent they are characterized by
  interlocking goals.
• Recognize that negotiation is a process that
  transforms over time, and mutual adjustment is
  one of the key causes of the changes that occur
  during a negotiation- Revenge
• Realize successful coordination of
  interdependence has the potential to lead to
  synergy, which is the notion that the whole is
  greater than the sum of its parts. In effect we
  can increase the size of the pie.
• Manage conflict whether it is inter-group,
  intra-group, interpersonal, or intrapersonal

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• Overview
• Viewed as a fixed pie situation we lose-they
  gain
• Non verbal communication
• Choices based on previous moves
• Gestures
• Emotion around losses betrayal, revenge
• Loss of focus on strategy and goals
• Intra-group challenges
• Agreeing on goal strategies
• Backing representatives

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Negotiators Dilemma
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• Negotiators Dilemma
• How to cooperate and create value at the table
  without being taken advantage of or becoming
  hostage to the relationship
• How to compete or claim value at the table
  without damaging the relationship or blocking the
  negotiation
• How to maximize value while minimizing risk

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The End

• The End

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Prisoner Dilemma Two men suspected of
committing a crime are arrested by the police and
placed in separate cells. Each is told that he
may either confess to the crime or remain silent.
Each is told that if he confesses and his partner
does not, the one who confesses turns state's
evidence against the other and goes free while
the other will go the jail for a long time (e.g.,
10 years) if both confess, they both go to jail
for a moderate term (e.g. 5 years) but, if
neither confesses, then the police will have them
found guilty of a lesser charge - - carrying
concealed weapons - - and sent to jail for 1
year.
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PrisonerDilemma