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On Creating and Claiming Value in Negotiations

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  • Mehmet Bac

    (Bilkent University)

Abstract

This paper presents a negotiation model that includes value creation. It shows that creative negotiation efforts tend to intensify toward the deadline, and that the deadline is determined endogenously by the tension between two motives, creating more value and claiming from existing value. When the parties can present “misleading” offers in order to claim rather than create value, the outcome in early negotiation rounds may display an impasse where any proposal is rejected without inspection, while negotiation activities such as value creation through “sincere” offers and inspection of clauses intensify toward the deadline.

Suggested Citation

  • Mehmet Bac, 2001. "On Creating and Claiming Value in Negotiations," Group Decision and Negotiation, Springer, vol. 10(3), pages 237-251, May.
    • Handle: RePEc:spr:grdene:v:10:y:2001:i:3:d:10.1023_a:1011210015279
    DOI: 10.1023/A:1011210015279
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. James K. Sebenius, 1992. "Negotiation Analysis: A Characterization and Review," Management Science, INFORMS, vol. 38(1), pages 18-38, January.
    3. Frankel, David M., 1998. "Creative Bargaining," Games and Economic Behavior, Elsevier, vol. 23(1), pages 43-53, April.
    4. Mehmet Bac, 2000. "note: A note on efficient signaling of bargaining power," International Journal of Game Theory, Springer;Game Theory Society, vol. 29(1), pages 119-126.
    5. Weinberger, Catherine J., 2000. "Selective Acceptance and Inefficiency in a Two-Issue Complete Information Bargaining Game," Games and Economic Behavior, Elsevier, vol. 31(2), pages 262-293, May.
    6. Mehmet Bac, 2000. "Signaling bargaining power: Strategic delay versus restricted offers," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 16(1), pages 227-237.
    7. Lutz-Alexander Busch & Ignatius J. Horstmann, 1999. "Signaling via an agenda in multi-issue bargaining with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 13(3), pages 561-575.
    8. Anat R. Admati & Motty Perry, 1991. "Joint Projects without Commitment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 259-276.
    9. Mehmet Bac, 1996. "Incomplete information and incentives to free ride," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(4), pages 419-432.
    10. Inderst, Roman, 2000. "Multi-issue Bargaining with Endogenous Agenda," Games and Economic Behavior, Elsevier, vol. 30(1), pages 64-82, January.
    11. Kalyan Chatterjee & Larry Samuelson, 1987. "Bargaining with Two-sided Incomplete Information: An Infinite Horizon Model with Alternating Offers," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(2), pages 175-192.
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    Cited by:

    1. Agndal, Henrik, 2007. "Current trends in business negotiation research: An overview of articles published 1996-2005," SSE/EFI Working Paper Series in Business Administration 2007:003, Stockholm School of Economics.
    2. Michael J. Cotter & James A. Henley, 2017. "Gender Contrasts in Negotiation Impasse Rates," Management, University of Primorska, Faculty of Management Koper, vol. 12(1), pages 3-25.
    3. Olivier Bochet & Manshu Khanna & Simon Siegenthaler, 2024. "Beyond Dividing the Pie: Multi-Issue Bargaining in the Laboratory," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(1), pages 163-191.

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