Negotiation Exercises
Two-party Deal Making

All in the Family
Author: Joao Neves
Source: DRRC

All in the Family is a two-party exercise that illustrates the strengths and weaknesses of four different procedures for distributing a set of ten items between two parties: 1) "Divide and Choose" works off parties' own priorities and estimates of the other party's priorities and encourages students to use and understand the maximization procedure, called Solver, in Excel; 2) "Alternating Selection" illustrates first mover advantage effects; 3) "Bargaining" -- face to face or electronic -- often leads to suboptimal agreements; 4) "FOTE" (full, open, and truthful exchange) illustrates in what ways students can improve their outcome over their bargained outcome. This exercise includes an Excel spreadsheet for students to use to compare and contrast the different procedures, teaching notes, and a second Excel spreadsheet for the instructor to use to post student results.

Preparation: 10 minutes
Negotiation: 30 minutes
Debrief: 40 minutes
Optional final part: 50 minutes

Preparation: 15-20 minutes
Negotiation: 30 minutes
Debrief: 60 minutes

The BioPharm-Seltek Negotiation
Author: Leonard Greenhalgh
Source: Creative Consensus, Inc.

Biopharm-Seltek is a distributive negotiation over the sale of a manufacturing facility that produces genetically engineered compounds. Negotiators are given information about the costs of their alternatives, but have to determine aspirations, reservation prices, and opening offers themselves. There are no teaching notes; however, the teaching notes associated with Coffee Contract can easily be adapted for this exercise.

Preparation: 10 minutes
Negotiation: 20 minutes

Blue Buggy
Author: Gaylen D. Paulson
Source: DRRC

This is a two-party deal making exercise with a negative bargaining zone. Nevertheless 15% - 20% of negotiators reach agreement illustrating irrationality and agreement biases. Another 15% - 20% generate creative agreements that illustrate the limitations of the frames and assumptions negotiators bring to the table.

Preparation: 10 minutes
Negotiation: 15 minutes

Bullard Houses
Author: Ron Karp; revised by Mox Tan, David Gold, Andrew Clarkson, Paul Cramer, Douglas Stone & Bruce M. Patton
Source: Harvard’s Program on Negotiation (PON), DRRC version

DRRC's version of Bullard Houses is an excellent exercise for raising issues of ethics in negotiation. It is a one-on-one, qualitative negotiation between agents over a piece of prime real estate. It emphasizes the role of agents, lying, misrepresentation, and trust.

Preparation: 60 minutes
Negotiation: 60 minutes

Buying a House
Author: Sally Blount
Source: DRRC

Buying a House is a two-party, quantified distributive negotiation with a $10,000 overlapping bargaining range. It can be used to teach pure distributive negotiations and the use of comparative standards.

Preparation: 15 minutes
Negotiation: 20 minutes

Cascade Manor
Authors: Susan Brodt & Leigh Thompson
Source: DRRC

This is a team-on-team quantified negotiation exercise with integrative potential. It contains distributive, compatible, and logrolling issues. It also deals with common and uncommon knowledge, as teammates do not have all the same information. This exercise provides an excellent opportunity to discuss the management of a negotiation team.

Preparation: 30 minutes
Negotiation: 45 minutes

Coffee Contract
Authors: Tony Simons & Thomas Tripp
Source: DRRC

Coffee Contract is a distributive exercise. It concerns the contract for coffee at the Cornell Hotel School. The exercise provides a good context for teaching fundamental negotiation concepts like bargaining zone, reservation prices, BATNAs, as well as distributive negotiation tactics, openings, concession making, and threats. Creative students may build in some integrative elements, and even if the students fail to find these creative ideas, the instructor can use them to introduce integrative negotiations.

Preparation: 15 minutes
Negotiation: 30 minutes

Commodities Brokers
Authors: Leigh Thompson & Leaf Van Boven
Source: DRRC

This is a set of three negotiations among two brokers. It is a multiple-time-period, two-party integrative negotiation between two brokers trading four commodities, in which there is risk involved. Participants are randomly assigned to the role of Broker Jones or Broker Smith in the trading of various quantities and grades of wheat, rice, copper, and crude oil. This is an excellent negotiation exercise for illustrating the impact of risk and uncertainty on behavior and performance over time.

Preparation: 15 minutes
Negotiation: 30 minutes

Computron Pharmaceuticals Authors: Leigh Thompson, Victoria Medvec, Wendi Adair, Peter Kim, Kathleen O’Conner & Janice Nadler Source: DRRC

This exercise is a two-party negotiation requiring multiple skills to reach fully integrative agreements. Parties include a potential hiree and hiring officer for a pharmaceutical engineering company. One party's BATNA is uncertain. Excellent negotiation for teaching advanced negotiation skills, including: logrolling (tradeoffs), compatible issues, contingency contracts, etc.

Preparation: 30-60 minutes
Negotiation: 45-75 minutes

El-Tek
Authors: Max H. Bazerman & Jeanne M. Brett
Source: DRRC

This is a two-party, quantified negotiation between two divisions of a large, decentralized organization. The negotiation concerns the potential transfer of a product from the division that developed it, and plans to use it as a component in its own products, to the division that has lower cost manufacturing and the corporate charter to market such a product. The exercise is very good for helping students visualize a Pareto optimal frontier.

Preparation: 60 minutes
Negotiation: 90 minutes

Energetics Meets Generex
Author: W. Trexler Proffitt, Jr.
Source: DRRC

This is a two-party distributive negotiation based on a real California wind energy farm transaction in 2002. It is good for illustrating biases including anchoring and availability. There is the option to provide a outside offer during the negotiation that illustrates the power of BATNA.

Preparation: 10 minutes
Negotiation: 30 minutes

GI-Fix
Author: Max H. Bazerman
Source: DRRC

GI-Fix is a two-party distributive negotiation between the head of a pharmacy for an HMO and the sales representative of a pharmaceutical company over the price and volume of a drug.

Preparation: 30 minutes
Negotiation: 30-45 minutes

Hollywood
Authors: Holly A. Schroth, Clarence Chen, Edward Sieh & Patricia Yu
Source: DRRC

Hollywood is an exercise designed to illustrate the role of agents in negotiation. It has two parts, a negotiation between each principal and his/her agent, and a negotiation between agents. The exercise is primarily distributive over salary, but there is the opportunity to add issues to the table.

Preparation: 15-20 minutes
Negotiation: 45 minutes

The Low Price Promotion Program
Author: Leonard Greenhalgh
Source: Creative Consensus, Inc.

This two-group, multi-round negotiation is a multi-trial prisoner's dilemma set in a corporate context. It works best with groups of four to seven. A messenger is required for every pair of teams. Discussion emphasizes constrained communication, group process (intra-group negotiation), trust, ingroup/outgroup cognitions, groupthink, and intergroup relationships.

Negotiation: 45-60 minutes

MAPO
Author: Mark N. Gordon, revised by Tim Reiser, Elizabeth Gray, Lynn Gerber, Bruce M. Patton & Valerie A. Sanchez
Source: Harvard's Program on Negotiation (PON), DRRC Version

DRRC's version of MAPO is a multi-issue union management contract negotiation, with integrative potential. It comes with numerous exhibits that provide an opportunity to discuss using fairness standards while negotiating distributive agreements. There is also a compatible issue that negotiators often do not find, but is interesting to discuss.

Preparation: 60 minutes
Negotiation: 120 minutes

Moms.com
Authors: Ann E. Tenbrunsel & Max H. Bazerman
Source: DRRC

This exercise replaces the popular Working Women exercise. Please do not continue to use Working Women. This is a two-party, quantified, deal making negotiation between a film company and a T. V. station over the syndication rights for a T.V. series, Moms.com. The exercise provides a good opportunity to introduce the concept of Pareto optimality. The teaching notes point out the slight differences between the numbers in the old Working Women exercise and this one.

Preparation: 60 minutes
Negotiation: 90 minutes

New Car
Authors: Janice Nadler, Leigh Thompson & Michael Morris
Source: DRRC

A two-party, multi-issue negotiation task, between a buyer and a seller for a new Toyota Carnry, challenges students' integrative and distributive negotiation skills. Participants are randomly assigned to the buyer and seller roles, and provided with information about the various issues, options, and alternatives (e.g., color, financing, warranty, extras, etc.). The goal of each negotiator is to maximize his or her profits. In the negotiation, eight issues are of concern, four of which are variable-sum issues. Following the negotiation, participants may be asked to complete a questionnaire asking each negotiator to 1) estimate the other party's payoff schedule, and 2) answer questions regarding their perceptions of their own and the other party's behavior, attitudes, and interests.

Preparation: 15-20 minutes
Negotiation: 30-45 minutes

New Recruit
Author: Margaret A. Neale
Source: DRRC

This is a two-party, multi-issue, quantified negotiation over an employment contract. It illustrates Pareto optimality and the differences between compatible, trade-off or integrative, and distributive issues.

Preparation: 15 minutes
Negotiation: 30 minutes

Oceania! Author: Leigh Thompson Source: DRRC

Oceania! is a complex two-party negotiation between a theater manager and a New York production company. There are several issues to be negotiated, and reaching an integrative agreement requires several different kinds of skills. This exercise is a companion exercise to Windy City Theater, which focuses on cross-functional teams.

Preparation: 60-90 minutes
Negotiation: 60-90 minutes

Outside Offer
Author: William Maddux
Source: DRRC

Outside Offer is a two-party, multi-issue negotiation with distributive and integrative elements. It is designed to be used as a second round of negotiation following the New Recruit negotiation exercise. The exercise's purpose is to give students the experience of a multi-round negotiation. It can be used to teach how previous negotiation history and interpersonal capital (in the form of trust or rapport established in the initial negotiation) can affect the dynamics of subsequent negotiations. Included in the Outside Offer folder is a version of New Recruit that alerts the students that there will be a second round negotiation. If you are going to use the Outside Offer exercise, you should use this version of New Recruit. Note that unlike New Recruit, the issues in Outside Offer are not quantified, although an instructor may wish to make doing so part of the exercise. A 1-3 week gap between New Recruit and Outside Offer is recommended.

Preparation: 30-45 minutes, more if students are required to generate a scoring sheet
Negotiation: 30-45 minutes
Debrief: 45-60 minutes

Pat Sullivan
Author: Lynn P. Cohn
Source: DRRC

This exercise illustrates agency and negotiation. There are 4 parties at the table, a sports star, Pat Sullivan, and Pat’s agent/attorney, a VP of Marketing, and the VP’s lawyer. Exercise illustrates the role of agent and client in developing negotiation strategy and in implementing it.

Preparation: 60-90 minutes
Negotiation: 60-90 minutes

The Performance Interview
Author: Leonard Greenhalgh
Source: Creative Consensus, Inc.

This two-party simulation involves an interaction between a boss and a subordinate. The simulation evokes participants' normal styles of dealing with an interpersonal problem; whether to directly or indirectly address the problem, or avoid dealing with it.

Preparation: 30 minutes
Meeting: 30 minutes

The Player
Authors: Holly A. Schroth & Rod Kramer
Source: DRRC

This exercise is a two-party, 11-issue, scorable negotiation exercise between a producer and a director. The purpose of this exercise is to help students learn some of the key techniques for integrative negotiation and allow them to assess their skills on both the integrative and distributive dimensions. The exercise should be used following the introduction of such fundamental concepts as BATNA, Resistance Point and Aspiration Point. The exercise requires students to learn the importance of trust and building a relationship, how to share and elicit information, prioritize issues, and look for logrolling solutions.

Preparation: 30 minutes
Negotiation: 45-50 minutes

Salary Negotiation
Authors: Holly A. Schroth, Gina Ney, Michael Roedter, Adi Rosin & Michael Tiedman
Source: DRRC

This is a qualitative, two-party salary negotiation that can be used to teach packaging issues, strategic use of compatible issues, and use of objective criteria.

Preparation: 10-20 minutes
Negotiation: 30-40 minutes

STAR
Author: Stephen B. Goldberg
Source: DRRC

This is a two-party, qualitative negotiation with integrative potential. The negotiation occurs between representatives of two record companies about which company is going to produce the first new record of a once-popular rock group that has reunited after 13 years apart.

Preparation: 60 minutes
Negotiation: 90 minutes

Stopwatch
Author: Don Moore
Source: DRRC

Stopwatch is a two-party, multi-issue negotiation with integrative potential set in the context of a buyer-seller transaction. Its main lesson surrounds the understanding and strategic disclosure of deadlines in negotiation.

Preparation: 30 minutes
Negotiation: 30 minutes
Debrief: 60 minutes

Strategic Alliances: Selling to the Pentagon
Author: Leonard Greenhalgh
Source: DRRC

This exercise involves a series of negotiations between three teams over a pot of money, created by contributions from each participant. We recommend team sizes of less than ten and having a second exercise administrator. Teams will need caucus rooms that are out of earshot of each other, in addition to the negotiating room. Learning points include multilateral communication, group process (intra-group negotiation), group decision-making, contracts, and intergroup and interpersonal relationships.

Exercise: 60 minutes

Student Project
Author: Leigh Thompson
Source: DRRC

This is a two-party, integrative negotiation concerning a class project organized between two students. Each person plays the role of a student assigned to work on a class project with another student. Together, the students must reach an agreement about what they will do and how they will complete the project. Students are given a list of issues they must work out concerning the project, e.g., topic to study, type of project, work schedule, method of presentation, etc. The goal is to work out the terms of the project with the other student in a way that maximizes each student's objectives.

Preparation: 15-20 minutes
Negotiation: 30-45 minutes

Sugar Bowl Author: Gaylen D. Paulson Source: DRRC

Sugar Bowl is a fun and compact introductory exercise originally designed for use in short negotiation seminars or workshops. The exercise presents a very approachable negotiating context, and one that persons are likely to feel is relecant to their own experiences. The key to the exercise is a relatively generous positive bargaining zone that often leaves both sides initially feeling successful, but later realizing they might have gotten a better distributive outcome (and thereby making them more receptive to course material). In a very short space of time issues are raised related to aspirations, reservation prices, alternatives, bargaining zones, and tactics for effective value claiming.

Preparation: 5 minutes
Negotiation: 5-10 minutes
Debrief: 15-20 minutes

Texoil
Author: Stephen B. Goldberg
Source: DRRC

This is a qualitative negotiation over the sale of some property. The exercise has no overlapping bargaining zone unless the parties uncover some of each other's interests. It is a very good exercise for teaching about interests, what information should and should not be shared, and creativity in negotiations.

Preparation: 30 minutes
Negotiation: 60 minutes

Vacation Plans
Authors: Leigh Thompson & Terri DeHarpport
Source: DRRC

This is a two-party negotiation in which participants plan a vacation together. The negotiators are long-time friends who, nevertheless, have very different preferences concerning how to spend the vacation. Integrative solutions are possible, in which participants maximize their joint gain by logrolling and identifying compatible interests.

Negotiation: 25 minutes

Virtual Victorian
Authors: Wendi Adair, Gaylen D. Paulson & W. Trexler Proffitt, Jr.
Source: DRRC

Virtual Victorian is a distributive, house buying negotiation that is carried out through agents and via email. There are four parties: the buyer, the buyer's agent, the seller, and the seller's agent.

Preparation: 60 minutes
Negotiation: one week (email)

Where’s Alvin? A Case of Lost Ethics
Authors: Margaret Calonico, Robert Inchausti, & Holly A. Schroth
Source: DRRC

Where's Alvin is a two-party negotiation between a manager and an employee that poses an ethical problem. The employee has stolen company property. The manager has some culpability in that he/she did not follow company policy re: security checks in hiring the employee. As a further complication, the manager and employee are, or at least were, friends.

Preparation: 15-20 minutes
Negotiation: 40 minutes