A Normative Model for Negotiations

Ambar G. Rao and Melvin F. Shakun
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Ambar G. Rao: New York University
Melvin F. Shakun: New York University

Management Science, 1974, vol. 20, issue 10, 1364-1375

Abstract: Negotiations between a multinational corporation and a host government are considered for an international joint venture. Various negotiating behavior concepts that the two parties may use are discussed. The process of concession-making is formulated as a sequential decision problem, where each party has an opportunity for concession-making in alternating negotiation sessions, the magnitude of the concession depending on the current state of negotiations and the behavior concept being employed. A dynamic programming model is developed to yield normative recommendations as to concession-making. Numerical examples illustrating the model are presented.

Date: 1974
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:20:y:1974:i:10:p:1364-1375

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