Class 3 (Negotiation Challenges: Developing a Scoring System)
Read: Howard Raiffa, Template Design (Chapter 11) and Template Evaluation (Chapter 12), from Negotiation Analysis. (Available in Chalk-Go to Course Material and then Choose Class 3).
These two chapters set up how to establish the template for issues to negotiate (Chapter 11) and how to create a scoring system for the issues and the resolution within each issue (Chapter 12). We covered the basics of template evaluation in Class 2. Our method differs slightly from what is in Chapter 12 in two respects. First, Chapter 12 doesn't cover in much depth how to come up with weights. Second, the weights and resolutions values in Chapter 12 are all normalized so that the best possible deal scores 100 points.
To see how the two methods are different but ultimately equivalent, consider Issue 4 in Chapter 12, Table 12.2. This issue gets the highest weight in the following sense: the best resolution for that issue is higher than the best resolution for any other issue. The method in class would have assigned this issue a weight of 1.0. We also would have assigned issue 4 a weight of 8/30, issue 2 a weight of 5/30, etc.
In addition, the resolution scores are not normalized to be between 0 and 100 as we did in class. The method in class would have assigned resolutions a, b, and c for Issue 1 scores of 0, 60, and 100 respectively.
Make sure that you understand why these two methods should give identical results but just differ in how the numbers are normalized. For example, if the Raiffa method indicates that Option A is preferred to Option B, then the method presented in class should give the same ranking.
NOTE: On Chalk, you will find an optimal problem set, "Advanced Exercises on Tradeoffs and Conflicting Objectives". Although this is strictly optional, you may find it useful in understanding how to put together a scoring system. You will also find a solution set on Chalk.
PART B
Prepare: Ariel Keen OR Marcos Fair
Your appropriate case is available in Chalk (Got to Course Material and then choose Class 3).
You will assume the role of either Ariel Keen, a potential employee, or Marcos Fair, Ariel's potential employer. One of the steps of preparation is to complete the scoring system that either Ariel or Marcos has started. Your particular case sets up the method for establishing a score system. A spreadsheet iYour z-score will be based on the scoring system that Professor Wu constructed (of course, not provided to you), not the scoring system you develop. Thus, it is in your interest to create a scoring system that reflects your agent's preferences as accurately as you can.
Preparation Questions (to be discussed in class; not to hand in):
1. Check to see that the numbers in Exhibit 1 are qualitatively consistent with the text (i.e., the verbal descriptions of how Ariel or Marcos view the various issues).
2. The scoring system is missing some of the resolution scores (i.e., the values between 0 and 100) and some weight (i.e., the values between 0 and 1). Use the Excel spreadsheet found in Chalk to "query" yourself about whether you prefer one package to another. Using a carefully designed set of queries, you should be able to get close to or even identify the "true" scoring system.
Web Assignment
The link to the web assignment is found in the email you received about your case. The deadline for the survey is Thursday, 2:00 P.M.
Excel Spreadsheets
A supplementary spreadsheet for your role is available on Chalk.