TENSION BETWEEN VALUE CREATION AND VALUE CLAIMING

October 25, 2012

During every bargaining interaction, the parties work to create value to enable them to maximize the joint returns generated. Once they ascertain the items to be divided and the relative values of those items to both sides, they work to claim value for their respective sides. Truly “win-win” Cooperative/Problem-Solvers are very open regarding their own values, and they work to achieve fair agreements that equally benefit both sides. “Win-lose” Competitive/Adversarials are less open, and they openly employ manipulative tactics designed to enable them to claim more of the joint surplus for their own side. “WIN-win” Competitive-Problem-Solvers are quite open, but not entirely so, and they use subtle techniques that enable them to claim more of the surplus than they share with their opponents.

If negotiators hope to achieve efficient agreements, they must indicate the terms they prefer to obtain with some degree of candor and disclose their true underlying interests. If one side is completely candid in this regard while the other is willing to over- and under-state the value of items for strategic purposes, the more manipulative side should be able to claim more of the surplus for itself. If such a party is certain the other side values an item significantly, it may state that it does too, even if it does not, to enable it to obtain a greater concession in exchange for that item. Conversely, if this party really desires a term it thinks the other side does not care about, it will understate the degree to which it values that item to enable it to claim this term for a minimal concession.

How open should negotiators be when they explore the different items during the value creation Information Stage? What techniques may they appropriately employ during the value claiming Distributive Stage during which they divide the items on the bargaining table?