The Judgment Policies of Negotiators and the Structure of Negotiation Problems

The structure of negotiation problems refers to characteristics of their feasible settlement spaces and efficient frontiers. These characteristics are determined by the joint distribution of negotiators' utilities across possible settlements. Variations in negotiators' judgment policies (i.e., how they judge the utility of potential settlements) may result in distinctly different negotiation problem structures. Depending on the structure of the negotiation problem, settlements that are efficient, maximize joint utility, and minimize inequality are sometimes possible, sometimes not. When such settlements are possible, different strategies may be necessary, to reach them. They sometimes can be reached only by a "compromise" strategy in which the disputants split their differences on each issue, sometimes only by a "horsetrading" strategy involving trade-offs among extreme values on issues, sometimes by either, and sometimes by neither strategy. Settlements on the efficient frontier that yield equal utility to both negotiators will sometimes leave both relatively well satisfied, sometimes not. When equal-valued settlements yield low levels of utility, negotiators are likely to feel dissatisfied and may presume that the other negotiator must be comparatively better satisfied. Even seemingly simple negotiation problems often pose a high degree of cognitive complexity. In the face of uncertainty about the nature of the problem structure, negotiators may resort to simple bargaining tactics (e.g., incrementally offering concessions on the issue for which the marginal rate of loss of utility is least). For many commonly encountered problem structures, such tactics lead toward satisfactory settlements, but not always. Analyses of the judgment policies of negotiators and resultant negotiation problem structures will contribute to better understanding of negotiation processes and help to inform the design of negotiation support systems.