Strategic Analysis
According to structural analysis, negotiations can therefore be described with matrices, such as the Prisoner's dilemma, a concept taken from game theory. Another common game is the chicken dilemma.
Strategic analysis starts with the assumption that both parties have a veto. Thus, in essence, negotiating parties can cooperate (C) or defect (D). Structural analysis then evaluates possible outcomes of negotiations (C, C; C, D; D, D; D, C), by assigning values to each of the possible outcomes. Often, co-operation of both sides yields the best outcome. The problem is that the parties can never be sure that the other is going to cooperate, mainly because of two reasons: first, decisions are made at the same time or, second, concessions of one side might not be returned. Therefore the parties have contradicting incentives to cooperate or defect. If one party cooperates or makes a concession and the other does not, the defecting party might relatively gain more.
Trust may be built only in repetitive games through the emergence of reliable patterns of behaviour such as tit-for-tat.
This table illustrates the options and possible outcomes of the Negotiator's Dilemma.
Read more about this topic: Negotiation Theory
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