In a negotiation, players will never get less than their added value.

The theory predicts that players will never get more than their added value (or their added value as perceived by the others in the game). But the question asked about getting less than their added values. It is quite common for players to get less than their added values. In the first problem we saw with Abe and Bea, both players had an added value of 6—without either of them, the pie disappears—but we can’t give them each 6 since there is only 6 to go around.

Consider the card game with 26 red cards and 26 black cards. The 26 black cards are all held by Adam, while the red cards are spread out across 26 different individuals. A red card and a black card together are worth $100. The players aren’t allowed to change the game, that is, the individuals with red cards cannot get together and form coalitions, and Adam cannot eliminate any of his black cards. Based on the theory of Added Value, we expect that:

Well done. Both sides of the negotiation have equal added value. Think about the last negotiation Adam has with a red card holder. To get that last $100, Adam needs the last red card just as much as the red card holder needs Adam's black card. The two sides are perfectly symmetric. Thus we expect that negotiation to result in a 50:50 split. But since everyone can hold out to be last, the same split should follow for all holders of a red card.

What was Holland Sweetener’s mistake?

Exactly. If you don't have any added value, you can still be compensated for changing the game. But you have to get paid upfront.

Anjay is selling his coffee company, and there are two potential buyers, Bert and Cecilia. Bert values the business at $40,000, while Cecilia values it at $50,000. Anjay is willing to sell for any amount over $20,000. All of these facts are known to all of the parties. If Bert has not taken this course, how much do you expect Bert will make?

Anjay will end up selling the company to Cecilia, and Bert will get nothing.

In the Photo Op case, which of these is William Willcox's best course of action?

This is a pretty good idea. Note that a good strategy not mentioned here would be to be upfront with Bachrach about what happened and ask for his help in solving the problem. <br> As for (a) and (d), the potential fine was $3 million, enough to bankrupt the campaign. Worse still, Hughes had been a member of the Supreme Court and so intentionally violating copyright laws would have been especially bad. And as for (b), I note that in 1916 they had yet to invent digital photography.

Is it better to give or to receive? In the above scenario, would Anita prefer to:

If you are the receiver, the other side can take advantage of you. Since Bonita knows Anita values the rug at $300, Bonita will only offer Anita $150 or so. If Anita is the proposer, since she knows Bonita values the rug somewhere between $400 and $600, she should be able to get $200.

Ai Ping is looking to buy Bao Wun’s antique cabinet. Bao Wun isn’t sure of the value. He has been asking for $10,000, but so far the most Ai has offered is $2,000. It looks like a deal isn’t possible, so the two sides are ready to walk away. Before giving up completely, Ai suggests they try a settlement escrow and Bao agrees. Confidentially, Ai is willing to pay up to $8,000, and Bao is willing to sell for as little as $6,000. If they employ a settlement escrow, what do you expect will happen?

If the two sides are truthful or even near truthful, the settlement escrow device will determine there is a deal to be done. It will not reveal the specifics of the two parties' reservation values, but will report back that there is a zone of potential agreement.

When comparing mediation to arbitration, which one is more forward-looking?

The goal of a mediator is to help the parties reach an agreement on their own. If the parties can reach an agreement without having something imposed on them, this is a big step in building (or restoring) their future relationship.

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Introduction to Negotiation: A Strategic Playbook for Becoming a Principled and Persuasive Negotiator