James K. Sebenius

Negotiation arithmetic: adding and subtracting issues and parties

Students of international negotiations often examine strategic interactions among a given set of parties dealing with a specified group of issues. The issues and parties themselves are often choice variables whose ultimate configuration can have decisive effects on a bargains outcome. Using a variety of international cases, I investigate the properties of several classes of moves that are intended to alter the issues and parties of an original negotiation. A unified approach to the analysis of such situations suggests numerous distinct means by which the “addition” or “subtraction” of issues can yield one-sided gains to the use of power; can yield joint gains that create or enhance a zone of possible agreement; and can reduce or destroy a zone of possible agreement. The effects of adding or subtracting parties are similarly analyzed. However, unintended complexity, unforeseen interrelationships, organizational considerations, transactions costs, and informational requirements may alter the analysis of such moves.

Designing Negotiations Toward a New Regime: The Case of Global Warming

I Popular and scientific concern has been rising about the possibility that human activities will result in damaging global climate change.’ Along with recent weather extremes, a number of computer models suggest that a warming is in prospect that could change weather and crop patterns, cause sea-level rises that would inundate low-lying areas, and result in other unprecedented and adverse consequences. Its apparent causes are embedded in the very fabric of industrial and agricultural practice; greenhouse gasemarbon dioxide, chlorofluorocarbons (CFCs), methane, and nitrous oxides-are emitted as a result of worldwide modes of energy use, transportation, industry, farming, and forestry. Since the atmosphere is a true commons in which greenhouse gases fully diffuse, complete global interdependence exists with respect to both emissions and control measures. Further, while carbon-emitting activities in developed countries since the Industrial Revolution are largely responsible

Negotiating Through an Agent

Agents often bargain on behalf of their principals. In many common negotiating situations, especially where ex post ratification of the agents agreement is required (e.g., union contracts, treaties), an agent faces inherent uncertainty about the terms that are minimally acceptable to the principal (the principals “reservation price”). In fact, the agents entire payoff function may be uncertain. We study bargaining behavior in these circumstances and show that the agents minimum demands unambiguously increase with increases in uncertainty about the principals reservation price, with increases in uncertainty about the payoff function, and with increases in the agents degree of risk aversion. We then fashion these results about an individual agents behavior into conclusions about the difficulty of reaching agreement in the overall negotiations. Using Axelrods measure of the “conflict of interest” in a game, optimal insistence prices in a one-shot bargaining situation, and two equilibrium concepts in a common commitment game, we show that the inherent uncertainty of agency bargaining can frequently make disagreement more likely.

Formal Individual Mediation and the Negotiators’ Dilemma: Tommy Koh at the Law of the Sea Conference

In 1978, Ambassador Tommy Koh of Singapore was appointed to chair a key negotiating group at the Third United Nations Conference on the Law of the Sea (LOS) that was charged with determining the financial terms and conditions to be applied to firms and countries that would mine deep seabed minerals. Koh faced the problem of how to move the stalled negotiations toward a consensus conclusion. Faced with a group of unwieldy proportion (more than 1000 delegates from more than 150 countries), clashing ideologies, a technically complex and politically divisive issue that appeared zero-sum in nature, as well as formal powers limited to convening and moderating meetings and to formulating compromise proposals, Koh set about developing a strategy that would lead to the adoption by consensus of a text on financial issues. Two years and many meetings later, the negotiating group’s completed work became part of the text of the final LOS Convention. Recognizing Koh’s remarkable feat, the delegates later elected him to the presidency of the overall LOS Conference.

Three ethical issues in negotiation

ConclusionThe overall choice of how to negotiate, whether to emphasize moves that create value or claim it, has implications beyond single encounters. The dynamic that leads individual bargainers to poor agreements, impasses, and conflict spirals also has a larger social counterpart. Without choices that keep creative actions from being driven out, this larger social game tends toward an equilibrium in which everyone claims, engages constantly in behavior that distorts information, and worse.Most people are willing to sacrifice something to avoid such outcomes, and to improve the way people relate to each other in negotiation and beyond. The wider echos of ethical choices made in negotiation can be forces for positive change. Each person must decide if individual risks are worth general improvement, even if such improvement seems small, uncertain, and not likely to be visible. Yet a widespread choice to disregard ethics in negotiation would mark a long step down the road to a more cynical, Hobbesian world.

Risk-Spreading Properties of Common Tax and Contract Instruments

Many tax systems require payment by means of fixed fees, percentages of gross revenues (royalties or ad valorem taxes), or percentages of net income (profit shares or income taxes). Even when payments due under such instruments have the same expected value, their risk-spreading properties may differ. For equal expected levies, profit-sharing is often ranked as the most effective means of risk-spreading, followed by royalty payments, and finally by fixed fees. When revenues and costs are both uncertain, however, we demonstrate that this common risk-ranking is not generally valid and discuss reasons for its breakdown.

Nuclear Negotiations with Iran

James Sebenius and Michael Singh are to be commended for advocating rigor in the analysis of international negotiations such as the one involving Iran’s nuclear program.1 Although they describe their offering as a neutral framework for analyzing any negotiation, they are not at all neutral regarding the negotiations with Iran; and they present conclusions that derive directly from speciac substantive assumptions, especially about Iranian objectives. The authors repeatedly describe their assumptions as “mainstream,” implying that they are uncontroversial and that any differing ones are too extreme to be worth considering. For an assumption to reside within the mainstream of popular and political discourse about Iran, however, does not make it correct. Sebenius and Singh do something similar with assumptions about U.S. interests, while sliding silently between the descriptive and the prescriptive in a way that fails to contrast actual policies with possible ones that would be consistent with those interests. Many readers’ principal takeaway from their article will be that a zone of possible agreement probably did not exist as of the time of their writing and probably will not exist unless the United States takes steps toward going to war with Iran. That answer, however, given the questionable assumptions on which it is based, is very likely wrong.