International Negotiation Process and Strategies

NEGOTIATION structures often entail different types of cooperation and conflict relationships that are complicated by uncertainty about the other actor's moves. During the Cuban Missile Crisis, each superpower's competitive strategies could have resulted in the outbreak of a nuclear war if the Soviets had not backed down. Despite the warnings of many scientists and the need for regulation, the competitive overfishing around the globe continues, which will eventually cause the collapse of the marine ecological system. As will be seen in this chapter, these and other settings can be explained by game-theoretical concepts and models. Even though they may not be able to present all the obvious solutions to various problems, the games of Chicken, Battle of the Sexes, Stag Hunt and their hybrids can at least tell us about types of obstacles to developing a cooperative arrangement that enhances everyone's welfare.

In competitive situations, commitments to a negotiated settlement might not be adhered to if cooperation has to be self-enforced with the involvement of costs. When individual incentives play a prominent role, this creates a situation where decision-makers have to act independently without being sure of the other's abiding by the contract. This chapter examines how different game-theoretical models explain the dynamics of cooperation and conflict under uncertainty in action. In some two-player games, as illuminated by a nuclear arms race, seeking to gain a competitive advantage does indeed impede cooperation. In other games such as Stag Hunt, maximum gains are attainable only through coordinated action, but there is no guarantee for actors to take such action. As is noticeable in this chapter, the Nash equilibrium serves as a key concept for explaining the stability or instability of strategic relationships. The chapter will also examine qualitative changes in the dynamics of relationships and payoffs with the extension of two-player games to multiparty interactions.

The Nash equilibrium

In a game where outcomes are derived from mutual interactions, deliberating one's best response stems from the consideration of what other players do. The Nash equilibrium (NE), the best-known solution concept, is actually based on a simple notion that every game has a set of strategies, each of which is the best response to the other player's corresponding one (Heap and Varoufakis 2004).