Improving Negotiation Skills Through Bargaining Games

Author(s):

Carl R. Templin, Lieutenant Colonel
Carl R. Templin, Lieutenant Colonel, USAF, Air Force Institute of Technology Wright-Patterson AFB OH 45433, 513/255-7777 ext. 3374 or 3368.
Michael E. Heberling, Lieutenant Colonel
Michael E. Heberling, Lieutenant Colonel, USAF, Air Force Institute of Technology Wright-Patterson AFB OH 45433, 513/255-7777 ext. 3374 or 3368.

79th Annual International Conference Proceedings - 1994 - Atlanta, GA

ABSTRACT
This paper examines the benefits of using bargaining games as the basis for teaching negotiation principles and skills. They permit negotiators to practice in a non-threatening environment and to learn both from their own experiences and from the experiences of others. This paper discusses the nature of bargaining games with their advantages and disadvantages. It also provides suggestions on where to find appropriate games, exercises, and cases and suggests approaches for combining the use of bargaining games with readings and instruction to help individuals improve their negotiation skills.

INTRODUCTION
Individuals tend to learn and develop negotiation skills based on their personal experience. This may consist of negotiating on a daily basis with family members, co-workers and friends or negotiating personal or business contracts. As they negotiate they learn what works best for them and leads to success rather than impasse. Usually, experience is a great teacher with lasting effects, as people learn from their successes and failures.

While learning negotiation from the "school of hard knocks" can be a very effective way to learn, it does have its drawbacks. It can be very expensive. Damaged family relationships, friendships, or business relationships can be a very costly way to learn that a negotiation approach is offensive. Lost personal or business opportunities or failed business dealings are hard ways to identify ineffective methods or tactics. It can take a lot of time to develop negotiation skills on a trial and error basis. Some people do not learn quickly from their mistakes. Some do not learn at all and repeat the same mistakes again and again.

Because it is not very efficient to "reinvent the wheel" many individuals seek to improve their negotiation skills by learning from others, usually through negotiation courses, seminars, and books. These are useful for introducing individuals to new negotiation paradigms, strategies and tactics as well as problems negotiators frequently encounter and how to deal with them.

NEGOTIATION LITERATURE
There is a considerable body of literature focusing on the entire spectrum of negotiation. The references at the end of this paper represent but a sampling. Some delve into the theoretical paradigms of negotiation, for example from a social science perspective (Rubin and Brown, 1975; Strauss, 1988) or an economic perspective (Cross, 1969; Osborne and Rubinstein, 1990). Most are prescriptive in nature and seek to show how negotiations can be made more effective. Karrass (1974) describes and analyzes 200 negotiation tactics and strategies and provides suggested defenses. Cohen (1983) provides an entertaining look at negotiation tactics and their uses. Others examine the negotiation process and provide guidance on how to conduct business oriented transactions (Karrass, 1970; Nierenberg, 1981; Economy, 1991), diplomatic and international negotiations (Zartman and Berman, 1982), or perform conflict resolution (Anderson, 1993).

Research from the Harvard Negotiation Project has suggested a new paradigm that shifts away from traditional positional bargaining to a more effective and efficient problem-solving approach. "Principled negotiation" seeks to develop a climate where parties can be creative in finding mutually beneficial solutions to a shared problem. The basic concepts are outlined by Fisher and Ury (1991) . Fisher and Brown (1988) identify tools and processes that develop and maintain the personal relationships and climate required to conduct principled negotiations. Ury (1991) describes the tools that can be used to apply the principles when the other side is unwilling to cooperate.

Negotiators can use such information to reinforce their strengths and identify weak or problem areas. They can learn new approaches to try. It also provides the opportunity to learn from the experiences of others.

This paper focuses on how bargaining games can be used in formal training and education programs to combine and integrate experienced-based and knowledge-based education. This allows individuals to learn from their own negotiation experience as well as to benefit from the knowledge and experience of others.

BARGAINING GAMES
Bargaining games and negotiation exercises provide an opportunity to provide negotiation experiences in a classroom environment. They range from very simple exercises that take 15 minutes or less to negotiation cases which require extensive outside preparation, fact finding, and several hours of in-class negotiation.

Some bargaining games are limited in scope and are structured so as to focus on only one or two aspects of negotiation. This type of bargaining game is used by Murnighan (1991) in his text. He uses 16 games to help the students to discover for themselves important principles of negotiations, such as:

  • Know yourself [and] the people you are bargaining with.
  • Try to be cooperative, problem solving, and/or exploratory.
  • Pay attention to non-verbals.
  • Don't do anything now that you know will make you feel bad later.
  • Forget sunk costs.
  • Propose an agreement that is fair.
  • Beware of threats, whether you make or receive them.
  • Understand the underlying dynamics of a negotiation.
  • Negotiate... bargain hard, while at the same time being as fair as you can be.
  • Act ethically (Murnighan, 1991, pp. 204-211)

Each chapter in the text corresponds to a particular game. The students first play the game to experience one particular aspect of negotiation. The students then report and discuss the results of the negotiation and compare their results with the others. That gives the students the opportunity to vent any frustrations they have experienced. They also learn how the people they negotiated with responded to their negotiation tactics and strategies. The students are then assigned to read the chapter in the text which discusses the game and the principles it teaches and summarizes the findings of relevant research. The assigned reading is then discussed in the next class period. After playing all the games, the text summarizes the principles learned and has an excellent chapter on ethics. This text is only suitable for use in a classroom environment where the instructor has access to the instructor's manual provided by the publisher. The text does not really describe the games in enough detail to either understand them or to play them. The instructor's manual provides the details and necessary props to conduct the games.

Other sources of bargaining games, along with theory and relevant research, include the following academic journals:

  • Advances in Experimental Social Psychology
  • Journal of Applied Psychology
  • Journal of Conflict Resolution
  • Journal of Experimental Social Psychology
  • Journal of Personality and Social Psychology
  • Organizational Behavior and Human Decision Processes

Other types of bargaining games or negotiation exercises are not as tightly focused as those considered above. They can take the form of questionnaires which help the student better understand their own negotiation styles and beliefs compared to other people. Lewicki et. al. (1993) provides questionnaires dealing with negotiation behavior, Machiavellianism, ethics, and influence tactics (pp. 725-742). Negotiation exercises also take the form of negotiation cases where each side has a set of common information and their own proprietary information. Students are formed into negotiation teams. The teams prepare negotiation strategies and plans and then conduct fact finding and negotiations. These games are like real negotiations but are limited in scope. Sources for these exercises include negotiation case books (Lewicki et. al. , 1985; Lamm, 1993) and many purchasing management texts which usually include a few negotiation cases. Usually the common information is provided in the text with proprietary information located in the corresponding instructor's manual. Another option would be to write up original cases based on past negotiations conducted within your own organization or any other organization that will give you access to data.

ADVANTAGES
There are numerous advantages to using negotiation games or exercises. They form a good basis for trying out the concepts covered in books or readings in a relatively risk-free environment. Bargaining games are fun and they prepare and stimulate the student to learn. Students learn by their own experience and the experiences of others. The environment provides students the opportunity to explore new negotiation approaches and tactics that might be very risky in real negotiation situations. Students also see how others approached the same problem with varying results. Students can then compare those experiences and results to their own and determine what they did well and where they can improve. It also provides an opportunity for the student to receive feedback from the instructor, the other participants of the negotiation, something that generally cannot be done after real negotiations.

DISADVANTAGES
There are also some disadvantages that must be dealt with if bargaining games are to be used effectively. First, students behave differently depending on whether real or imaginary money is involved. Real money tends to bring out a more competitive spirit. It also tends to drive the point home much harder than using imaginary money, even if the amount of the money is nominal. The negotiation then becomes much more real and personal. Second, since the negotiations are not real, some students do not take them seriously and thus limit the amount both they and their partners can learn from the negotiation. Fortunately, most students become very involved in the negotiations. Third, because of the artificial environment, students sometimes use tactics they would not consider using in real life. Sometimes their use is considered by many to be unethical or offensive. In one sense, that is one of the advantages of using bargaining games, in that they provide a less threatening opportunity to use such tactics. However, the people are real and so are the feelings that are generated. This can provide a powerful learning experience for all involved. However, there is a danger of relationships being damaged and reputations being formed based on such experiences. Students should therefore be warned at the beginning of the course or exercise of this possibility.

We have conducted graduate classes and executive seminars using negotiation games for nearly three years. Our experience has shown that bargaining games can be extremely useful tools. Generally students, both experienced and inexperienced negotiators, play the games enthusiastically and do take them seriously enough to benefit from them. The games also provide a great springboard for discussion and exchange of experiences. We have also found that student journals recording their experiences, feelings and insights are very important in the learning process. It is from those journals that we have discovered that the feelings generated during the games, especially when trust is violated, run deeper and longer than one would expect. Given that, in some ways the games are real life.

REFERENCES

  1. Anderson, Kare. Getting What You Want: How to Reach an Agreement and Resolve Conflicts Every Time. New York: Dutton, 1993.
  2. Cross, John G. The Economics of Bargaining. New York: Basic Books, Inc., 1969.
  3. Economy, Peter. Negotiating to Win: A Manager's Handbook. Scott Foresman Professional Books, 1991.
  4. Fisher, Roger; Ury, William and Patton, Bruce. Getting to Yes: Negotiating Agreement Without Giving In, 2nd ed. New York: Penguin Books, 1991.
  5. Fisher, Roger and Brown, Scott. Getting Together: Building a Relationship that Gets to Yes. Boston: Houghton Mifflin Co. , 1988.
  6. Karrass, Chester L. The Negotiating Game: How to Get What You Want. New York: Thomas Y. Crowell, 1970.
  7. Give and Take: The Complete Guide to Negotiating Strategies and Tactics. New York: Thomas Y. Crowell, 1974.
  8. ---. Give and Take: The Complete Guide to Negotiating Strategies and Tactics. New York: Thomas Y. Crowell, 1974.
  9. Lamm, David V. Contract Negotiation Cases: Government and Industry. Germantown, Maryland: Wordcrafters Publications, 1993.
  10. Lewicki, Roy J., Litterer, Joseph A., Sauders, David M., and Minton, John W. Negotiation: Readings, Exercises, and Cases. Homewood, Ill: Irwin, 1992.
  11. Murnighan, J. Keith.,The Dynamics of Bargaining Games. Englewood Cliffs, New Jersey: Prentice Hall, 1991.
  12. Murnighan, J. Keith. Bargaining Games: A New Approach to Strategic Thinking in Negotiations. New York: Morrow, Williams, & Co., 1992 .
  13. Nierenberg, Gerard I. Fundamentals of Negotiating. New York: Harper and Row, 1973.
  14. Osborne, Martin J. and Rubinstein, Ariel. Bargaining and Markets. San Diego: Academic Press, 1990.
  15. Strauss, Anselm. Negotiations: Varieties, Contexts, Processes, and Social Order. San Francisco: Jossey Bass, 1988
  16. Ury, William. Getting Past No: Negotiating With Difficult People. New York: Bantam Books, 1991.
  17. Zartman, I. William and Berman, Maureen R. The Practical Negotiator. New Haven, Yale University Press, 1982.

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