FEDERATED SCIENCE FUND

3-party negotiation
Party A

Party B

Party C
What Is a Coalition?
 Interacting groups of individuals
 Deliberately constructed and issue oriented
 Exist independent of formal structure
 Lack formal structure
 Focus goal external to the coalition
 Require collective action to achieve goals
 Members are trying to achieve outcomes that
satisfy the interests of the coalition
Challenges of Coalitions
Coalition face three sets of challenge :
(1) The formation of the coalition

(2) Coalition maintenance

(3) The distribution of resources among coalition

members
How and Why Coalitions Form and Develop

When coalitions form:

 Parties come together to pool efforts and resources in
pursuit of common or overlapping goals
 Control over resources becomes the basis for two
critical pieces of the coalition formation process:
 What each member brings to the coalition
 What each member should receive if the coalition forms
How and Why Coalitions Form and Develop

How coalitions develop:

 Coalitions start with a founder
 Successful founders have extensive networks
 Founders’ benefits from early coalitions are likely
to be small
 Coalitions build by adding one member at a
time
 The founder finds an ally;
 The founder can benefit if he or she understands
the others’ interests
How and Why Coalitions Form and Develop
 Coalitions need to achieve critical mass
 Find their “joining threshold”
 A minimum number of people get on board
 Others join because friends and associates are
members

 Coalitions exclude weaker members who can’t

contribute
Standards for Coalition Decision
Making
Coalition decision rules
 Three criteria to determine who receives what
from the results of the coalition’s efforts
 Equity standard
 Anyone who contributed more should receive more
(in proportion to the contribution made)
 Equality standard
 Everyone should receive the same
 Need standard
 Parties should receive more in proportion to some
demonstrated need for a larger share of the outcome
Standards for Coalition Decision Making

Where is the strength in coalitions?

 When is “strength is weakness” true?
 Any winning coalition obtains the same payoff
 Actors are interchangeable
 Contribute fewest resources, have least power or
exert the least influence
 When is “strength is strength” true?
 The more resources a party holds or controls, the
more likely he or she will a critical coalition
member
How to Build Coalitions –
Practical Advice

 Say no when you mean no

 Share as much information as possible
 Use language that describes reality
 Avoid repositioning for the sake of acceptance
Prospective Coalition Member Roles
Prospective Coalition
Member Roles

 Allies
 Parties who are in agreement with a negotiator’s goals
and vision, and whom the negotiator trusts
 Opponents
 People with whom a negotiator has conflicting goals
and objectives, but who can be trusted to be
principled and candid in their opposition
 Bedfellows
 Parties with whom a negotiator has high agreement
on the vision or objectives, but low to moderate levels
of trust
Prospective Coalition
Member Roles

 Fence Sitters
 Parties who will not take a stand one way or the other
 Fear taking a position because it could lock them in, be
politically dangerous, or expose them to risk
 Adversaries
 Adversaries are low in agreement and cannot be trusted.
Action Strategies for Building
Relationships in Coalitions

 With allies
 Affirm agreement on collective vision or objective
 Reaffirm quality of the relationship
 Acknowledge doubt and vulnerability with respect to
achieving vision and collective goal
 With opponents
 Reaffirm relationship based in trust
 State vision or position in a neutral manner
 Engage in problem solving
Action Strategies for Building
Relationships in Coalitions
 With bedfellows
 Reaffirm the agreement; acknowledge caution exists
 Be clear about expectations in terms of support
 Reach agreement on how to work together
 With fence sitters
 State your position; find out where they stand
 Apply gentle pressure
 Focus on issue; have them tell you what it would take to
gain their support
Action Strategies for Building
Relationships in Coalitions

 With adversaries
 State your vision or goals
 State your understanding of your adversary’s position in a
neutral way
 Identify your own contributions to the poor relationship
 End the meeting by restating your plan but without making
demands
 Strategies for Maximizing
Coalitional Effectiveness

 Make your contacts early

People tend to feel obligated to other with whom they have
made explicit or implicit agreements. So, it is important to
make contact with key parties early in the process of multiparty
negotiation before they become committed to others
 Seek verbal commitments
Most people feel obligated to follow through with promises
they make to other, even when verbal commitments are not
legally binding
 Use unbiased-appearing rationale to divide the pie
DEBRIEFING
FEDERATED SCIENCE
PROJECT
Discussion
 This exercise simulate the effect of:
 Power

 Preference toward distribution norm (how to distribute

payoff)
 Expectation toward furutre interaction

 The party in the negotiation:

 Stockman (Most powerful; contribution based)

 Turbo (medium power; both contribution and needs based)

 United (lowest power; needs based)

 The expectation of future interaction further complicates the

choice of whether or not to form two-way coalitions
How many two-way versus three-way coalitions
formed?
 In coalition formation there are two types of rationality --
individual and group
 Individual rationality: A negotiator in a coalition will not

accept any payoff that is less than he/she could receive by

him/herself
 Group rationality: choose a coalition that maximizes the

collective gain.
 Most groups will form three-way coalitions due to the dominance
of 'group rationality’. Group rationality alone is not sufficient,
because there is no guarantee that larger collective gain will also
produce larger individual gain. If someone in a coallition get less
gain than his/her individual gain then the group will split up.
 Who has the most power?
 At first it appears that Stockman is the most powerful
negotiator.
 However, the Turbo negotiator often acts as a "swing"
negotiator - and thus has more power than it might at first
appear.
 The low power party is likely to use a need-based rule to
get more resources.
 The high power party is likely to use resource contribution
rule to get more resource
 Because of this dispute the influence of the middle power
party is critical. It is often that the final resource allocation
is determined by thisparty.
 Did the distribution norms make a difference in the
final agreement?
There are several things negotiators can do to not fall prey to pervasive
biases in negotiation?
1. Negotiators should have a general awareness of some fundamental
human information processing biases.
2. Negotiators should prioritize the issues of the negotiation. Further,
negotiator should reveal their own interests (many of them are afraid
to do so, for illogical reason). Negotiators are correct to not reveal
their BATNA or reservation price, but they should reveal their
interest.
3. Negotiators should apply integrative bargaining strategies :
a) Logrolling  this exercise
b) Bridging
c) Non-specific compensation
d) Expanding the pie
e) Cost-cutting
Did the expectation of future interaction affect
coalition formation or outcomes?

Furthermore….
1. If both parties’ aspirations (target points) are high,
integrating interests may be the only way to reach
agreements within a small bargaining space
2. Integrative agreements strengthen the relationship
between the two parties because they are mutually
rewarding.
3. Integrative agreements ordinarily contribute to the
welfare of the broader communities of which the
two parties are members
Did the negotiators caucus?
 The groups that caucus early in the meeting tend to
set up an expectation that a two-way agreement will
be reached. The caucusing also facilitates such an
agreement.
 This question also sets up a nice discussion of
strategic planning -- how to prevent caucusing or be
the first one to propose it.
Thank YOU