tailieunhanh - Lecture Judgment in managerial decision making (8e) - Chapter 10: Making rational decisions in negotiations

After studying this chapter, you should be able to: Explain why communication is vital for effective management, describe the basic process of communication, explain how culture can influence communication,. | Judgment in Managerial Decision Making 8e Chapter 10 Making Rational Decisions in Negotiations Copyright 2013 John Wiley & Sons 1 Game Theoretic Approaches Provides precise prescriptive advice Relies on describing all outcomes Assumes all parties are rational Any situation where you need to reach a joint decision with a different party, but the two of you have different preferences is classified as a negotiation. Game theory could potentially be a useful framework for providing precise prescriptive advice on how to obtain favorable outcomes in the negotiation. However: Game theory relies on the unrealistic assumption that negotiators are capable of considering every possible combination of player moves and calculating the payoffs associated with each combination of moves. Game theory also assumes that all parties in a negotiation are rational actors. As we know quite well by this point, this is rarely the case. 2 A Decision-Analytic Approach to Negotiation Describes the behavior of | Judgment in Managerial Decision Making 8e Chapter 10 Making Rational Decisions in Negotiations Copyright 2013 John Wiley & Sons 1 Game Theoretic Approaches Provides precise prescriptive advice Relies on describing all outcomes Assumes all parties are rational Any situation where you need to reach a joint decision with a different party, but the two of you have different preferences is classified as a negotiation. Game theory could potentially be a useful framework for providing precise prescriptive advice on how to obtain favorable outcomes in the negotiation. However: Game theory relies on the unrealistic assumption that negotiators are capable of considering every possible combination of player moves and calculating the payoffs associated with each combination of moves. Game theory also assumes that all parties in a negotiation are rational actors. As we know quite well by this point, this is rarely the case. 2 A Decision-Analytic Approach to Negotiation Describes the behavior of counterparts Prescribes advice from counterpart behavior Analytical framework Alternatives to negotiated agreement Each party’s set of interests Relative important of interests Because we are not perfectly rational actors who are capable of computing a complex series of possible moves within a negotiation, a more useful model for providing prescriptive advice to negotiators is a decision-analytic approach that allows for players to be imperfect, irrational human beings. In this model, a key starting point is using what we know about human behavior to predict the likely behavior of a negotiating counterpart. This is descriptive in nature. The second part of the model is prescriptive in that it takes the expected behavior of counterparts as a given and then provides advice for the optimal move that a focal negotiator should make. Overall, the analytical framework for a decision-analytic model has three key elements: Each party’s alternatives to the negotiated agreement. Each party’s set