Examples

The prototypical example of this situation is the encounter of buyer and seller whenever there is no fixed selling price (i.e., “haggling” is permitted or even expected). In the United States, most new and nearly all used car purchases can involve some negotiation of a mutually acceptable price. Although negotiation examples that involve economic conflicts (e.g., union contract negotiations; trade negotiations) or political conflicts (e.g., recent attempts to negotiate issues of land and sovereignty between Israelis and Palestinians) probably come to mind first, many common interpersonal situations permit some degree of negotiation. For example, husbands and wives may negotiate a division of financial and domestic responsibilities, neighbors may work out arrangements arising from their proximity (e.g., how late parties may end, how freely children and pets may wander), or roommates may settle any number of living arrangements (e.g., who gets which bedroom, whether food will be shared, who cleans what when). As these examples illustrate, a negotiation need not be focused on a single choice dimension (e.g., selling price), but can involve multiple issues, as when a divorcing couple negotiates division of property, child custody, visitation, and child support as part of a comprehensive divorce agreement.

Conceptual Description

For ease of presentation, let us assume negotiation between two parties. Such Negotiation situations are ones with the following properties: (a) There is a set of pairs of outcomes (e.g., deals; settlements), any one of which may be selected by mutual agreement of the parties.