Competitive Bargaining vs. Cooperative problem solving

Competitive Bargaining vs. Cooperative Problem-Solving

One of the biggest challenges of negotiation is that there are two different approaches that call for opposite strategies: competitive bargaining and cooperative problem-solving. This section gives an overview of both approaches and provides a rationale for why only one of them is appropriate for international conferences.

Competitive Bargaining

Historically, the word negotiation means “business,” and negotiation has a major role in business transactions.

The crudest form of negotiation in an international conference resembles crude commercial negotiations, for example, when you are trying to buy or sell a second-hand car and the only point at issue is the price. In that case, the buyer wants to pay as little as possible, while the seller wants to receive as much as possible. A gain by one party means an equal loss by the other. This type of negotiation is sometimes referred to as “competitive bargaining.” It has been extensively studied over the centuries by traders everywhere and, more recently, in business schools.

You probably already understand this form of negotiation. The essential feature is that each party receives something that they accept as the outcome of the negotiation. At the simplest, they would receive equal shares; but the issues before international conferences are generally far too complex for that and the needs and capabilities of the nations concerned are too varied for any simple equilibrium. Instead, at the international level, the balance to be found is between trade-offs, in which not only the quantity but also the nature of what different parties receive is different.

Each party is concerned primarily to maximize its own gains and minimize the cost to themselves.

Then some important tactical principles come to the fore:

1. Always ask for more than you expect to get. Think of some of the things asked for as “negotiating coin” that you can trade away in order to achieve your aim. You can also assume that the other party does not expect to get everything they ask for and that some of their requests are only negotiating coin.
2. You might even start by demanding things you do not really hope to achieve, but which you know other parties strongly oppose. By doing so, you may hope that the other parties will make concessions to you just to refrain from pressing such demands.
3. Always hide your “bottom line.” Because the other party’s aim is to concede to you as little as possible, you may get more if they are not aware of how little is acceptable to you.
4. Take early and give late. Negotiators often undervalue whatever is decided in the early part of the negotiation and place excessive weight on whatever is agreed towards the end of the negotiation.
5. As the negotiation progresses, carefully manage the “concession rate.” If you “concede” things to the other party too slowly, they many lose hope of achieving a satisfactory agreement; but if you “concede” too fast, they could end up with more than you needed to give them.
6. The points at issue are seen as having the same worth for both sides—although they rarely do.

Precepts of this kind can readily generate a competitive or even combative spirit and encourage negotiators to consider a loss by their counterparts as a gain for themselves. It should be evident that such sentiments at the international level are harmful to relations and thus to the prospects of cooperation and mutual tolerance.

Cooperative Problem-Solving

An entirely different style of negotiation is more common in international conferences than “competitive bargaining,” both because it is generally more productive and is widely seen as more appropriate in dealings between representatives of sovereign States. This style of negotiation starts from the premise that you both have an interest in reaching agreement and therefore an interest in making proposals that the other is likely to agree to. In other words, each has an interest in the other(s) also being satisfied.

Achieving your objective requires that you also work to achieve the objectives of the other party (or parties)—to the extent that such effort is compatible with your objectives. The same applies to your counterpart(s): it is in their interest to satisfy you to the maximum extent possible. This makes negotiation a cooperative effort to find an outcome that is attractive to all parties.

To succeed in this type of negotiation, principles apply which are quite contrary to those that apply in “competitive bargaining,” namely:

1. It is important not to request concessions from the other side that you know are impossible for them. If you do so, they will find it difficult to believe that you are genuinely working for an agreement.
2. It is in your interest that the other party should understand your position. Indeed, perhaps they should even know your “bottom line.” If they understand how close they are to that “bottom line” on one point, they will also understand the necessity to include other elements that you value to give you an incentive to agree.
3. Sometimes it is in your interest to “give” a lot to the other side early in the negotiation process to give them a strong incentive to conclude the negotiation and therefore “give” you what you need to be able to reach agreement.
4. The “concession rate” may not be important.
5. There is a premium on understanding that the same points have different values for different negotiators and on finding additional points on which to satisfy them.