Simulation: Comparative Advertising

I acted as one of the group members of company A in this simulation and my partner was
Maria. Our profit came out to be 17 million after 10 periods.
When I finished reading the general information of this simulation, my first thought was to
think of a strategy that can prevail over company B during the 10 periods. So I proposed to
“Advertise” for the first three periods and then discuss the next steps with company B. In this
way, the initiative was held in our own hands. The worst situation would be companies A and
B both advertise, and the best situation would be our side earning 6 million profits for the
first three periods. To summarize, there would be either a lose-lose situation or company A
making a big success. However, Maria proposed to always “Not Advertise”. And when I
reread the information, I noticed that company A and company B are not the only two
companies that sell liquid dishwasher detergent, which means other companies in this
industry may take advantage of the “battle” between the two significant sellers in this area.
Moreover, in my imagination, Company B would have an adverse impression on us if we
aggressively “advertise” in the first 3 rounds, which is not a good foundation for negotiators
to build trust between each other. Therefore, even if we prevail momentarily, it is detrimental
to a long-term negotiation and our own reputation. Maybe Company B would not cooperate
with us very well or the chances of Company B betraying our agreement would increase
because they think that Company A took more advantage during this period.
Our final strategy was decided as: “not advertise” for the first three periods to show our good
faith and try to persuade Company B representatives to cooperate with us and “not advertise”
for the next seven periods to create a win-win situation. And if they refuse the proposal, we
will then have to change our strategy. Fortunately, we had a very high-quality conversation
with Company B and we both agreed to “not advertise” in the next periods. I have to admit
that I was worried that they would betray us during the important periods such as periods 8
and 10. However, both of us acted in good faith and followed the agreement.
After the simulation, when I look back at the simulation together with the terms learned from

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the reading materials and the class, I found my strategy varied from “Contending” to the
combination of “Yield” and “Problem solving”, which means that I attached more importance
on another parties’ interest instead of addressing all the attention on our own interest.
(Strategic Choice in Negotiation by Dean G. Pruitt). And I think this is one of the most
crucial mindsets of negotiators. Moreover, I think it is also vital to use more than one strategy
introduced in the materials depending on the reality so that the negotiators could be more
flexible during the negotiation.
We also discussed how to build trust in class. Various methods were present such as exchange
of information and investigate other party’s reputation. And I think of one characteristic term
in China called “drinking culture”, and it is often used as an effective way for businessman to
build trust since they feel that they can really get to know a person at the drinking. Because
some Chinese people firmly believe that they can tell a person’s character by observing how a
person will behave after he or she is drunken. This is the reason why many big deals are
settled at the drinking table in China. And I found it rarely happens in other countries.