By Douglas Clark
The Negotiator’s Dilemma, as described by David Lax and James Sebenius, is a situation where a negotiator faces the choice between cooperative and competitive negotiation strategies. It highlights the tension between creating value through collaboration and maximizing one’s value.
Cooperative vs. Competitive:
Negotiators can choose to focus on collaborative value-creating behaviors (cooperation) or competitive value-claiming behaviors (competition).
The Dilemma:
The dilemma arises because a cooperative strategy, while potentially leading to a win-win outcome for both parties, also carries the risk of one party being exploited by the other if the other party adopts a competitive strategy. Conversely, a competitive strategy, while potentially maximizing one’s gains, can lead to a less desirable outcome if the other party also adopts a competitive approach.
The Prisoner’s Dilemma Analogy:
The Negotiator’s Dilemma is often compared to the Prisoner’s Dilemma. In this classic game theory scenario, two individuals acting in their self-interest may not achieve the best overall outcome for both. For more details on the prisoner’s dilemma please see TED-Ed, 2012, www.youtube.com/watch?v=t9Lo2fgxWHw
Impact of Information Disclosure:
Sharing information about one’s preferences and interests can be crucial for identifying mutual gains. Still, it also makes one vulnerable to exploitation if the other party uses that information to their advantage.
Managing the Dilemma:
Negotiators must carefully consider the potential benefits and risks of both cooperative and competitive strategies, as well as the specific context of the negotiation.
A typical example in negotiation is where one party is willing to concede on a specific issue to gain cooperation on another issue (cooperative) or a negotiation where one party aggressively pushes for their demands (competitive).
Playing the Red/Blue Game: Round-by-Round Setup
The game is based on multiple rounds of the “prisoners’ dilemma”
Lets Play
It’s a simple game with a few rules. There are multiple versions across the internet, but this is the version and scoring system I am familiar with:
The game is played in pairs, and each of you will have a red and a blue card or chip. Over the rounds, you will independently choose which colour to play. Each player makes their choice independently, then reveals it simultaneously with the other player. So, independently choose a colour but simultaneously reveal it.
Scoring:
Depending on what both of you have played, you’ll get a score:
Rounds and rules:
The game is played over ten rounds, and there’s no communication during play. However, at the end of round four, you have the chance to stop and have a discussion. You can discuss anything, but you may want to negotiate how you will continue to play the game.
Regardless of the discussion outcome, the game continues exactly as before, with you independently choosing your colour, simultaneously revealing it to your partner, and then noting down your scores, all without communication during the rounds.
At the end of the eighth round, there’s another communication session.
For rounds nine and ten, your scores will be doubled. So in rounds nine and ten:
Objective:
The objective of the game is to maximise your positive score. When the game is complete, you add up your scores and compare results. The maximum you can make is 60. The least you can make is -60. For one of you to have got 60 and the other -60, there would have to be some pretty bad behaviour going on during the game.
Don’t reveal the following secrets till the game has ended
Optimal Outcome (Don’t Reveal Until the End)
The optimal score for a true win-win is 36. That’s when both of you have played blue throughout the whole game. It’s tough to achieve that. Remember, though, it’s not all about how they want to play. It’s also about how the partner plays. That can have a significant effect on the outcome of your Dilemma Game.
There are two people involved, and their own experiences will play a part. Perhaps they have been taken advantage of before, so they are more cautious. Maybe they find that starting in Red gives them an advantage. A sort of “power” over the other player. Perhaps they want to lull them into a false sense of security by playing blue to start, then hitting with a red later on. The core of this message is that people have very different motivations for picking one colour over another.
The same can be said in real negotiations. You never really know what the other negotiator is thinking. Understanding their underlying motivations is crucial to choosing the right approach. Communication can certainly help if both parties can find a way to develop it positively, remembering the game played in silence, and only allowing controlled and timed short communication intervals after the fourth and eighth rounds.
Based on my experience and learning, although many negotiators claim to have a win-win negotiating style, only a small percentage will achieve the 36 points each. In reality, only a handful of pairs will end up with both parties in the positive. Are they lying about being win-win negotiators? Are they confused about what constitutes win-win? Or are they thinking they would LIKE to play win-win, but they are afraid to start that way in case they get taken advantage of.
An interesting game to play and experience the prisoner’s dilemma firsthand, which, after all, is the negotiator’s dilemma. Should I cooperate or defend against a potential attack?