Published online by Cambridge University Press: 22 May 2009
Students of international negotiations often examine strategic interactions among a given set of parties dealing with a specified group of issues. The issues and parties themselves are often choice variables whose ultimate configuration can have decisive effects on a bargain's outcome. Using a variety of international cases, I investigate the properties of several classes of moves that are intended to alter the issues and parties of an original negotiation. A unified approach to the analysis of such situations suggests numerous distinct means by which the “addition” or “subtraction” of issues can yield one-sided gains to the use of power; can yield joint gains that create or enhance a zone of possible agreement; and can reduce or destroy a zone of possible agreement. The effects of adding or subtracting parties are similarly analyzed. However, unintended complexity, unforeseen interrelationships, organizational considerations, transactions costs, and informational requirements may alter the analysis of such moves.
1. Wallace, William, “Atlantic Relations: Policy Coordination and Conflict,” International Affairs 52 (04 1976), p. 164Google Scholar.
2. Fisher, Roger, “Fractionating Conflict,” in International Conflict and Behavioral Science: The Craigville Papers, ed. Fisher, (New York: Basic Books, 1964), p. 98Google Scholar.
3. Tollison, Robert and Willett, Thomas, “An Economic Theory of Mutually Advantageous Issue Linkages in International Negotiations,” International Organization 33 (Autumn 1979), p. 448CrossRefGoogle Scholar.
4. Oye, Kenneth A., “The Domain of Choice: International Constraints and Carter Administration Foreign Policy,” in Oye, , Rothchild, Donald, and Lieber, Robert J., eds., Eagle Entangled: U.S. Foreign Policy in a Complex World (New York: Longman, 1979), p. 18Google Scholar.
5. Callières, Francois de, On the Manner of Negotiating With Princes (1716), translated by Whyte, A. F. (Boston: Houghton Mifflin, 1919), pp. 109–10Google Scholar.
6. Notice that this graphical analysis can readily handle both continuous and discrete issues. Tollison, and Willett, , “Economic Theory,” pp. 441–43Google Scholar, suggest “discontinuous” policy options as “possible extensions” of their analysis. Stein, Arthur in a recent article, “The Politics of Linkage,” World Politics 32 (1980): 62–81CrossRefGoogle Scholar, limits his analysis to discrete issues by the exclusive use of 2 x 2 game matrices, which he says are “widely considered to be the most appropriate” models for such analysis. This choice restricts consideration to two parties each with two discrete choices.
7. Fisher, Roger and Ury, William, Getting to Yes (Boston: Houghton Mifflin, 1981), pp. 41–43Google Scholar.
8. Oye, , “The Domain of Choice,” pp. 15–16Google Scholar.
9. Tedeschi, J. J., Schlenker, B. R., and Bonoma, T. V., Conflict, Power and Games (Hawthorne, N.Y.: Aldine, 1978)Google Scholar.
10. Deutch, M. and Krauss, R. M., “Studies of lnterpersonal Bargaining,” Journal of Conflict Resolution 6 (1962): 52–76CrossRefGoogle Scholar; Rubin, Jeff and Brown, Bert, The Social Psychology of Bargaining and Negotiation (New York: Academic Press, 1975)Google Scholar.
11. For an extended discussion, see Bacharach, S. B. and Lawler, E., Bargaining (San Francisco: Jossey-Bass, 1981), pp. 104–30Google Scholar.
12. The usual caveats about unitary, rational actor models in bargaining analyses apply. They are intelligently considered in Tollison, and Willett, , “Economic Theory,” pp. 441–42Google Scholar, and Stein, , “Politics of Linkage,” pp. 79–81Google Scholar.
13. See Raiffa, Howard, The Art and Science of Negotiation (Cambridge: Harvard University Press, 1982), pp. 210–17Google Scholar.
14. Of course, a key aspect of negotiating judgment lies in subjective decisions (by, say, a delegation head) that package 1 is preferable to proposed package 2, that giving on this issue in return for movement on that one is worthwhile, or that the other side will value one set of concessions more than another. Trying to make these decisions over several issues is an implicit application of the ideas of multi-attribute value theory. It is perhaps worth noting that “value” need not be denominated in monetary terms. The technology for handling multiple-objective problems has been extensively developed in recent years. For example, see Keeney, Ralph and Raiffa, Howard, Decisions with Multiple Objectives: Preferences and Value Tradeoffs (New York: John Wiley, 1976)Google Scholar, or Barclay, Scott and Peterson, Cameron, Multi-Attribute Models for Negotiations, Technical Report 76–1 (McLean, Va.: Decisions and Designs Inc., 1976)Google Scholar. Actual applications have included the Panama Canal negotiations and negotiations over Philippine base rights; see Raiffa, , The Art and Science, pp. 166–86Google Scholar. Tanker safety standard negotiations are discussed in Ulvila, Jacob W. and Snider, Warren G., “Negotiation of Oil Tanker Standards: An Application of Multi-Attribute Value Theory,” Operations Research 28 (01–02 1980): 81–96CrossRefGoogle Scholar. Middle Eastern oil negotiations are the subject of Brown, Rex and Peterson, Cameron, An Analysis of Alternative Middle Eastern Oil Agreements, Technical Report (McLean, Va.: Decision and Designs Inc., 1975)Google Scholar.
15. A related situation is described in Gosovic, Branislav and Ruggie, John Gerard, “On the Creation of a New International Economic Order: Issue Linkage and the Seventh Special Session of the UN General Assembly,” International Organization 30 (Spring 1976): 309–45Google Scholar.
16. This is a straightforward application of analysis in Schelling, Thomas, The Strategy of Conflict (Cambridge: Harvard University Press, 1960), pp. 21–52Google Scholar.
17. Iklé, Fred Charles, How Nations Negotiate (New York: Harper & Row, 1964), pp. 222–35Google Scholar.
18. Once into the world of decisions under uncertainty, more analytic machinery is required than was needed for the “value” theory–based analysis. “Utility” theory is an appropriate approach and is admirably treated in Keeney and Raiffa, Decisions with Multiple Objectives.
19. Bachrach, Peter and Baratz, Morton S., “Two Faces of Power,” American Political Science Review 56 (12 1962): 947–52CrossRefGoogle Scholar.
20. For more detail see Sebenius, James K., Agreements and Disagreements: Negotiation Analysis and the Law of the Sea (Cambridge: Harvard University Press, forthcoming)Google Scholar.
21. Tollison, and Willett, , “Economic Theory,” pp. 430–37Google Scholar.
22. Rubin, and Brown, , Social Psychology, pp. 275–77Google Scholar.
23. Iklé, , How Nations Negotiate, p. 99Google Scholar.
24. Luard, Evan, The Control of the Seabed: An Updated Report (New York: Taplinger, 1977), pp. 152–53Google Scholar.
25. Tollison, Robert and Willett, Thomas, “Institutional Mechanisms for Dealing with International Externalities: A Public Choice Perspective,” in The Law of the Sea: U.S. Interests and Alternatives, ed. by Amacher, Ryan C. and Sweeney, Richard J. (Washington, D.C.: American Enterprise Institute, 1976), p. 98Google Scholar.
26. Iklé, , How Nations Negotiate, p. 224Google Scholar.
27. Fisher, , “Fractionating Conflict,” p. 93Google Scholar.
28. Haas, Ernst, “Why Collaborate? Issue Linkage and International Regimes,” World Politics 32 (04 1980), p. 373CrossRefGoogle Scholar.
29. Fisher, Roger and Ury, William, Principled Negotiation: A Working Guide, draft (Harvard Negotiation Project, Harvard Law School, 1979), p. 106Google Scholar.
30. Wallace, , “Atlantic Relations,” p. 179Google Scholar.
31. Callières, De, On the Manner, p. 125Google Scholar.
32. Iklé, , How Nations Negotiate, p. 119Google Scholar.
33. Bennett, Douglas and Sharpe, Kenneth, “Agenda Setting and Bargaining Power: The Mexican State versus Transnational Automobile Corporations,” World Politics 32 (10 1979), p. 81CrossRefGoogle Scholar. Of course, adding a party in this case may be interpreted as the means of adding an issue as in Case 1 of Section 2.
34. Raskin, A. H., “The Newspaper Strike; A Step by Step Account,” in Zartman, I. William, ed., The 50% Solution (Garden City, N.Y.: Doubleday Anchor, 1976), pp. 453–54Google Scholar.
35. Fisher, and Ury, , Principled Negotiation, p. 90Google Scholar.
36. One could observe technically that the sum of the parties' risk premia may decline as the number of parties increases. Assume that the owner of a business has a negative exponential utility function with risk-aversion parameter γs. The uncertain end-of-period net value of his business is normally distributed with mean μ and variance σ2. He is negotiating with a possible buyer for the business who also has a negative exponential utility function with risk-aversion parameter γb, where the buyer is more risk-averse than the seller (γb > γs). The seller's certainty equivalent (CEs) is μ – (γs/2) σ2, while the buyer's certainty equivalent (CEb) is μ – (γb/2) σ2. There is no possible zone of agreement since the seller wants more than the buyer will offer (CEs, > CEb). But if the buyer brings in identical partners, who will split up the proceeds evenly, their collective certainty equivalent (CEn) will be n(μ/n – (γb/(2n2))σ2) or μ – (γb,/2n)σ2. As n increases, CEn – μ and a positive bargaining range for the sale price opens up of size (CEn – CEs = (γs, – γb/n)(σ2/2) which approaches the risk premium of the seller, (γs/2) σ2, as n becomes large. Observation that the cost of risk bearing declines as the number of participants increases has been made in a public finance context by Arrow, K. J. and Lind, R. K., “Uncertainty and the Evaluation of Public Investment Decisions,” American Economic Review 60 (1970): 364–78Google Scholar; and in a capital markets setting by Lintner, J., “The Market Price of Risk, Size of Market, and Investor's Risk Aversion,” Review of Economics and Statistics 52 (02 1970), p. 98Google Scholar.
37. The idea, advanced by Donald Lessard in a Harvard Business School finance seminar, that developing countries might turn to financial markets to shed risk in addition to diversifying their real economies or trying to manipulate markets suggested this bargaining application.
38. See Olson, Mancur and Zeckhauser, Richard, “An Economic Theory of Alliances,” Review of Economics and Statistics 48 (08 1966): 266–79CrossRefGoogle Scholar.
39. See Olson, Mancur, The Logic of Collective Action (Cambridge: Harvard University Press, 1965), pp. 37–41Google Scholar.
40. Iklé, , How Nations Negotiate, p. 55Google Scholar.
41. Wriggens, W. Howard, “Up for Auction: Malta Bargains with Great Britain, 1971,” in Zartman, , The 50% Solution, pp. 208–33Google Scholar.
42. Smith, David and Wells, Louis, Negotiating Third World Mineral Agreements (Cambridge: Ballinger, 1975), p. 143Google Scholar.
43. For an extremely complicated Indonesian example, see Fruhan, William, Financial Strategy (Homewood, Ill.: Richard D. Irwin, 1979), pp. 129–48Google Scholar. The analytic basis for such moves is elaborated in Lax, David A. and Sebenius, James K., “Insecure Contracts and Resource Development,” Public Policy 29 (1981): 417–36Google Scholar.
44. Oye, , “The Domain of Choice,” p. 18Google Scholar.