Facilitating multiple-issue negotiations: Case and experimental studies.

Abstract

Decision theorists have recently suggested that third parties use decision analysis to facilitate multiple-issue negotiations. They note that analysis and decomposition can highlight differences in the negotiators' judgments about the value and likelihood of possible outcomes. This information may then be used by a facilitator to fashion compromise agreements that benefit both parties jointly. This study confirmed these claims by demonstrating the usefulness of facilitated formal assessment in an actual case and by showing that facilitated explicit exchange leads to improved outcomes in an experimental negotiation simulation. Both the case and experimental results provide the first systematic confirmation of these claims. The case study concerned a contract between an electric utility company and its subsidiary over the terms of a contract for meter reading services. An intervenor used multiattribute utility analysis and joint optimization to formulate the terms of an integrative contract. The intervention led to a satisfactory agreement and to improved relations between the parties. The "classroom" negotiation experiment was conducted to evaluate facilitated explicit information exchange as a means of improving the outcome of a multiple-issue two-party negotiation. Two groups of thirty federal government employees participated in an integrative bargaining exercise. One group received an intervention; the other did not. The intervention involved explicit written disclosure of information on the parties' values to the experimenter/facilitator. The parties were not required to make complete or even fully accurate disclosures. However, they did underst and that the facilitator would monitor the exchange for roughly equal disclosure of information. After scanning the information for equal disclosure, the facilitator conveyed it to the opponent to complete the exchange. The dyads that received this intervention devised agreements with significantly higher joint scores and significantly less absolute difference between the scores. They also tended to have a more positive attitude toward the process and the outcome of the negotiation. A content analysis of the disclosures revealed that there was some distortion during the facilitated exchange but the intervention still improved the outcome of the negotiation.