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The Judgment Policies of Negotiators and the Structure of Negotiation Problems

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  • Jeryl L. Mumpower

    (University Center for Policy Research, and Department of Public Administration and Policy, State University of New York, Albany, Albany, New York 12222)

Abstract

The structure of negotiation problems refers to characteristics of their feasible settlement spaces and efficient frontiers. These characteristics are determined by the joint distribution of negotiators' utilities across possible settlements. Variations in negotiators' judgment policies (i.e., how they judge the utility of potential settlements) may result in distinctly different negotiation problem structures. Depending on the structure of the negotiation problem, settlements that are efficient, maximize joint utility, and minimize inequality are sometimes possible, sometimes not. When such settlements are possible, different strategies may be necessary, to reach them. They sometimes can be reached only by a "compromise" strategy in which the disputants split their differences on each issue, sometimes only by a "horsetrading" strategy involving trade-offs among extreme values on issues, sometimes by either, and sometimes by neither strategy. Settlements on the efficient frontier that yield equal utility to both negotiators will sometimes leave both relatively well satisfied, sometimes not. When equal-valued settlements yield low levels of utility, negotiators are likely to feel dissatisfied and may presume that the other negotiator must be comparatively better satisfied. Even seemingly simple negotiation problems often pose a high degree of cognitive complexity. In the face of uncertainty about the nature of the problem structure, negotiators may resort to simple bargaining tactics (e.g., incrementally offering concessions on the issue for which the marginal rate of loss of utility is least). For many commonly encountered problem structures, such tactics lead toward satisfactory settlements, but not always. Analyses of the judgment policies of negotiators and resultant negotiation problem structures will contribute to better understanding of negotiation processes and help to inform the design of negotiation support systems.

Suggested Citation

  • Jeryl L. Mumpower, 1991. "The Judgment Policies of Negotiators and the Structure of Negotiation Problems," Management Science, INFORMS, vol. 37(10), pages 1304-1324, October.
  • Handle: RePEc:inm:ormnsc:v:37:y:1991:i:10:p:1304-1324
    DOI: 10.1287/mnsc.37.10.1304
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    Citations

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    Cited by:

    1. Rudolf Vetschera & Michael Filzmoser & Ronald Mitterhofer, 2014. "An Analytical Approach to Offer Generation in Concession-Based Negotiation Processes," Group Decision and Negotiation, Springer, vol. 23(1), pages 71-99, January.
    2. Teich, Jeffrey E. & Wallenius, Hannele & Wallenius, Jyrki & Zionts, Stanley, 1996. "Identifying Pareto-optimal settlements for two-party resource allocation negotiations," European Journal of Operational Research, Elsevier, vol. 93(3), pages 536-549, September.
    3. J. Teich & H. Wallenius & J. Wallenius, 1998. "Multiple Issue Action and Market Algorithms for the World Wide Web," Working Papers ir98109, International Institute for Applied Systems Analysis.
    4. Kaushal Chari & Manish Agrawal, 2007. "Multi-Issue Automated Negotiations Using Agents," INFORMS Journal on Computing, INFORMS, vol. 19(4), pages 588-595, November.
    5. Pekka Salminen & Jeffrey E. Teich & Jyrki Wallenius, 1998. "The Secretary Problem Revisited - The Group Decision-Making Perspective," Group Decision and Negotiation, Springer, vol. 7(1), pages 3-21, January.
    6. Northcraft, Gregory B. & Preston, Jared N. & Neale, Margaret A. & Kim, Peter H. & Thomas-Hunt, Melissa C., 1998. "Non-linear Preference Functions and Negotiated Outcomes," Organizational Behavior and Human Decision Processes, Elsevier, vol. 73(1), pages 54-75, January.
    7. Michael Filzmoser & Johannes R. Gettinger, 2019. "Offer and veto: an experimental comparison of two negotiation procedures," EURO Journal on Decision Processes, Springer;EURO - The Association of European Operational Research Societies, vol. 7(1), pages 83-99, May.
    8. Gregory E. Kersten & Tomasz Wachowicz & Margaret Kersten, 2016. "Competition, Transparency, and Reciprocity: A Comparative Study of Auctions and Negotiations," Group Decision and Negotiation, Springer, vol. 25(4), pages 693-722, July.
    9. Ehtamo, Harri & Kettunen, Eero & Hamalainen, Raimo P., 2001. "Searching for joint gains in multi-party negotiations," European Journal of Operational Research, Elsevier, vol. 130(1), pages 54-69, April.
    10. Zhang, Linlan & Song, Haigang & Chen, Xueguang & Hong, Liu, 2011. "A simultaneous multi-issue negotiation through autonomous agents," European Journal of Operational Research, Elsevier, vol. 210(1), pages 95-105, April.
    11. Jeryl L. Mumpower & Jim Sheffield & Thomas A. Darling & Richard G. Milter, 2004. "The Accuracy of Post-Negotiation Estimates of the Other Negotiator's Payoff," Group Decision and Negotiation, Springer, vol. 13(3), pages 259-290, May.
    12. Gregory E. Kersten, 2014. "Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice," Decision Analysis, INFORMS, vol. 11(4), pages 215-232, December.
    13. Giampiero E.G. Beroggi, 2000. "Dynamic Plots in Virtual Negotiations," Computational and Mathematical Organization Theory, Springer, vol. 6(2), pages 171-190, July.
    14. Alice F. Stuhlmacher & Mary Kay Stevenson, 1997. "Using Policy Modeling to Describe the Negotiation Exchange," Group Decision and Negotiation, Springer, vol. 6(4), pages 317-337, July.
    15. Giampiero E.G. Beroggi, 2000. "An Experimental Investigation of Virtual Negotiations with Dynamic Plots," Group Decision and Negotiation, Springer, vol. 9(5), pages 415-429, September.
    16. Bragge, Johanna, 2001. "Premediation analysis of the energy taxation dispute in Finland," European Journal of Operational Research, Elsevier, vol. 132(1), pages 1-16, July.
    17. repec:cup:judgdm:v:3:y:2008:i:7:p:547-569 is not listed on IDEAS
    18. Mandeep K. Dhami & Henrik Olsson, 2008. "Evolution of the interpersonal conflict paradigm," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 3(7), pages 547-569, October.
    19. Michael Filzmoser & Rudolf Vetschera, 2008. "A Classification of Bargaining Steps and their Impact on Negotiation Outcomes," Group Decision and Negotiation, Springer, vol. 17(5), pages 421-443, September.
    20. Thomas A. Darling & Jeryl L. Mumpower & John Rohrbaugh & Anna Vari, 1999. "Negotiation Support for Multi-Party Resource Allocation: Developing Recommendation for Decreasing Transportation-Related Air Pollution in Budapest," Group Decision and Negotiation, Springer, vol. 8(1), pages 51-75, January.
    21. Alice F. Stuhlmacher & Matthew V. Champagne, 2000. "The Impact of Time Pressure and Information on Negotiation Process and Decisions," Group Decision and Negotiation, Springer, vol. 9(6), pages 471-491, November.
    22. Ching-Fen Lee & Pao-Long Chang, 2008. "Evaluations of Tactics for Automated Negotiations," Group Decision and Negotiation, Springer, vol. 17(6), pages 515-539, November.

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    Keywords

    negotiation; human judgment;

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