Week 2
PART A
Read: Richard Shell, “When is it Legal to Lie in Negotiations,” Sloan Management Review (Spring 1991).
What is legal fraud? How does unethical negotiation behavior differ from illegal negotiation behavior?
Read: Avinash Dixit and Barry Nalebuff, "Credible Commitments" in Thinking Strategically (1991), pp. 141-167.
How might commitments be used effectively in negotiation? What is required to make a commitment credible?
Prepare: Mapletech-Yazawa (A): Confidential Instructions for Y. Mori (HBS 892-003)
OR
Mapletech-Yazawa (B): Confidential Instructions for Dr. J. Ross (HBS 892-004)
Your role assignments (Ross or Mori) and confidential information were handed out at the end of Class #1. Prepare your role in advance. You will spend the first part of today's class carrying out the negotiation with an assigned counterpart (announced at the beginning of class). Please complete the web survey before class.
Mapletech: http://faculty.chicagobooth.edu/George.Wu/survey/neg2m.html
Yazawa: http://faculty.chicagobooth.edu/George.Wu/survey/neg2y.html
In this negotiation exercise, as with the others, it is important to keep your instructions confidential. Your purpose is to try very hard to maximize your surplus over the value of your best unilateral alternative to negotiated agreement; you will be scored according to the extent to which you do so. Here, as elsewhere, you should be concerned about the integrity of your behavior. Act in a way that you feel is ethically appropriate.
Read: William Ury, Getting Past No.
You should begin reading Getting Past No. A question that arises naturally in negotiating is how to deal with hard bargainers. Ury’s book is the best advice available. You should have the book completed by the beginning of Class #5.