Lecture 1: Negotiating Strategy

1
Lecture 1Negotiating Strategy
Professor Keith Chen
2
A note on formal analysis in this course
We will avoid most formal notation and proofs.
3
Negotiations Social-Science
Game-theoretic optimality a relationship between
human factors
4
Strength of this Approach

• Use as a guide
• a Normative Science
• How should you negotiate?
• a Predictive Science.
• Limits of this Approach
• Assuming we know the rules can mislead.
• If we recognize biases and irrationalities, tells
  us little about how to take account of them, for
  that we need behavioral econ.

5
Introduction

• Myself
• Game Theorist and Behavioral Economist
• Research on Negotiations Two Examples
• The game theory of Integrative Bargaining
• The Evolutionary and Psychological basis of
  cooperation (collusion), and reference point
  effects by looking at monkeys.

6
Research Integrative Bargaining

• I study how why and how agendas form.

7
Research on Monkeys
Cotton-top Tamarins cooperative breeder
8
Experimental Setup
tool
tray
9
Training Solo Conditions
10
Intentionality?
11
First Game

• Experiment 1 tests for
• (i) Contingent cooperation
• (ii) Recognition of reputation
• Setup trained vs untrained actors

12
(No Transcript)
13
Subjects
Tufted Capuchin an extractive forager
14
Capuchin Purchasing Gambles
15
Movie
16
Experiment 2
Experiment Two
Second Question Do capuchins care about gains
and losses?
E1 shows 1 and E2 shows 2, then both give 1 or 2
(w. prob. ½).
17
Course Description

• Grades
• Class participation 1/2 grade
• Assign days when you lead discussion of readings
• Final Exam 1/2 grade
• Short essay questions
• Study groups / Case preparation
• Office Hours 55 Hillhouse Rm. 204
• Thursday mornings, 1000 to 1130 or by
  appointment.

18
Syllabus

• All course materials on the course site
• Expectations
• Read articles and chapters for next class
• Ask questions, but think when and whom
• My question and nametag policy
• Other class policies

19
Next Time

• Introduction to Alternating offers Bargaining
• Readings
• Introduction to Issues in Bargaining, required
• Raiffa, pages 7-25
• Optional Introduction to bargaining and notation
  in game theory
• Osborne Rubinstein, Chapter 1.