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• Gilles Gauthier
• Institute of Applied Economics

Source Underdal, Arild. The Outcomes of
Negotiation in V.A. Kremenyuk ( ed.),
International Negotiation, Jossey-Bass, 1991, p.
100-115.
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• DISTINCTION TO BE MADE BETWEEN
• A. Agreement or lack of agreement
• - decision obligations of each party.

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• B. Impact
• - predict the consequences for each party.

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• Difficulties
• - uncertainty regarding how the decision
  will affect the future.
• - actors may adapt to new circumstances in
  the future.

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• 1. STRIKING AN AGREEMENT
• commitment
• there is commitment to a course of action (or
  to abstaining from action). This is an exchange
  of conditional promises.

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• advantage of an impasse
• some parties believe that once negotiations are
  underway, an agreement must be reached.
• creating value
• nothing is known on both parties
  potential gain, unless it is learned during
  the negotiation.

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• 2. DISTANCE FROM OPENING POSITIONS
• performance
• whoever makes the most concessions loses.
• fairness
• may interfere with the concept of
  performance (e.g. cutting the pie in half.)

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• anchoring
• meaning of the opening statement is unclear.
• creating value
• the potential gain for both parties is
  completely unknown unless it is disclosed
  during the negotiation.

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• 2. EFFICIENCY FOR THE COMMUNITY (GROUP)
• optimization
• difference between the actual value create
  and the potential value that might have been
  created.
• transaction costs
• the process must also be efficient.

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• NOTE
• difficulty in pinpointing the integrative
  potential
• - incomplete information (options need to be
  learned).
• - multiple criteria must be applied when
  weighing the options.
• - total ignorance might be preferable.
• - a great many other issues may proliferate
  during the process.

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• the negotiators energy is focussed on
  distribution, and efficiency becomes secondary.

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• 4. STABILITY
• There is no incentive to defect.
• perfect
• neither party has any incentive to defect.
• imperfect
• gains of defection are offset by a sense of
  obligation or by fear of sanctions.

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• NOTE
• why some negotiators choose to defect?
• - benefits inferior to best alternative.
• - benefits inferior to concessions the other
  party would be willing to concede.
• - benefits inferior to aspiration level.
• - some arrangements can absorb more defection
  than others.

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• why some negotiators choose to cooperation?
• - it is the antithesis of defection.
• - cooperation generates gains of its own.

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• 5. DISTRIBUTION OF NET BENEFITS
• A. Share of net benefits obtained by the
  negotiatior

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• a factor of
• - talent for creating integrative potential
  (value) by the negotiators related to the
  interdependence.
• - the negotiators share of potential gain,
  and the costs generated.
• - total ignorance might be preferable.

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B. Net benefits obtained by the negotiator as
compared with his reference point (absence of
agreement)
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• NOTE
• distribution is seen as a problem in its own
  right
• - competitive negotiators.
• - negotiators concerned with fairness.
• parties with an individualist perspective will
  relate distribution to efficiency.

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• NOTE
• the negotiation model selected affects the
  negotiators behaviour
• - distributive negotiation determined by a
  partys relative power.
• - integrative negotiation principles of
  fairness.