Negotiation about what - Module 2

Question 1

What does “logrolling” mean?

Answer 1

Creating value in a negotiation by negotiating over multiple factors simultaneously

Question 2

How to deal with negotiating parties having different expectations about the future?

Answer 2

Contingency contracts

Question 3

What might a party rejecting a contingency contract that meets their stated expectations imply?

Answer 3

They are being dishonest about their expectations of the future

Question 4

Why might scoring your interests in a negotiation be helpful?

Answer 4

It allows you to see what you are most willing to trade in order to receive something back where you most value it

Question 5

What is a package reservation value?

Answer 5

The lowest cumulative value of all points negotiated over that you are willing to accept in a negotiation

Question 6

How to create value even after a negotiation is completed?

Answer 6

Using the completed agreement as a guarantee of minimum, reapproach negotiations, identifying what both parties most missed out on

Question 7

How to elicit information regarding the other party’s priorities? Two ways

Answer 7

Negotiate multiple issues simultaneously

Make multiple offers simultaneously

Question 8

What are the three time periods that a game can be played over?

Answer 8

One-shot
Finitely repeated
Infinitely repeated

Question 9

What is the subgame perfect equilibrium of a repeated game, that has a unique subgame perfect equilibrium in a stage game version?

Answer 9

Repetition of the stage game subgame perfect equilibrium

Question 10

What is the subgame perfect equilibrium of a repeated game that has two Nash equilibrium in its stage game form?

Answer 10

Any combination of the Nash equilibrium

Question 11

What can be sustained in an infinitely repeated game?

Answer 11

Cooperation

Question 12

What does sustained cooperation depend upon in an infinitely repeated game?

Answer 12

The discount factor being large enough

Question 13

Where do we see more cooperation in games with the same expected length, finitely repeated games or infinitely repeated games?

Answer 13

infinitely repeated games

Question 14

When is a revision of an agreement a Pareto improvement?

Answer 14

If at least one person is made better off, and nobody is made worse off

Question 15

How do contingency contracts benefit negotiations?

Answer 15

They create value ex-ante, but no actual value ex-post

Question 16

What are key to watch out for when making contingency contracts?

Answer 16

That the other party may have more information than you
That uncertainty is resolved in a measurable way, i.e. the state of the world can be recognised
That contracts are incentive compatible, i.e. the other party cannot influence the state of the world to your disadvantage