Paper5 Multiparty Negotiation

Pablo M. Linzoain 1

PREPARING FOR A MULTI-PARTY NEGOTIATION

By Pablo M. Linzoain

INTRODUCTION AND DEFINITIONS

There is a substantial difference between negotiation involving two parties and those, which

involve more than two parties. Sebenius (1996) states that the most powerful advances in

negotiation theory have been mainly inspired by the two-party case. On the other hand, multiparty

negotiation is often seen as a question of coalition-formation (Rubin and Brown, 1975,

Zartman, 1988). The coalitional possibilities make the analysis of a complex negotiation more

difficult and interesting. Part of the game for each party is to build a relationship with the group

and to form alliances with some of the members within it. In these relationships they should be

able to improve their communication, trust, exchange of information and understanding each

other's needs and wants.

According to Bazerman, Mannix and Thompson (1988), group negotiation is a process in

which three or more persons, with their interests, decide how to resolve their conflicting

preferences among issues. However, the knowledge, theory and practice of two-party negotiation

do not transfer to a group situation readily (Bazerman and Neale, 1992).

DIFFERENCES BETWEEN TWO-PARTY AND MULTI-PARTY NEGOTIATION

A classic example of two-party negotiation is the standard strategic model Prisoner's Dilemma

Game, which has been called the negotiator's dilemma by Lax and Sebenius (1986). Both

Pablo M. Linzoain 2

negotiators face a choice between contending ("claiming value") and problem solving ("creating

value"). Hence, there are four possible outcomes, as shown in figure.

The negotiator's dilemma characterises the whole of a negotiation. The line between

"creating" and "claiming" need not be clear-cut. Each negotiator has specific interest and s/he can

reveal information early, late, throughout, or not at all; s/he can mislead by omission or

commission, or be straight.

The tension the negotiator's dilemma reflects between cooperative impulses to create

value and competitive impulses to claim it is the same regardless of the scale of the negotiation.

The essence of an effective negotiator is being able to manage this tension, creating while

claiming value (Lax and Sebenius, 1986). However, the dynamics of group negotiation are far

GOOD

GOOD

GREAT

TERRIIB LE

TERRIIB LE

GREAT

MEDIIOCRE

MEDIIOCRE

CREATE CLAIM

NEGOTIATOR 2

NEGOTIATOR 1

CREATE

CLAIM

Source: The negotiator's dilemma, David Lax and James Sebenius (1986:39) "The Manager as Negotiator" The

Free Press, USA

Pablo M. Linzoain 3

more complex than those of the two-party negotiator's dilemma. As has been seen, with two

parties there are four possible outcomes, two sets of interests and one interaction. With three

parties, the network grows; there are three sets of individual interests, three possible interactions

between any two players and one interaction of all three. In a five-party situation, there are five

sets of individual interests,