Negotiation Analysis

The Science and Art of Collaborative Decision Making

Negotiation Analysis: The Science and Art of Collaborative Decision Making
By Howard Raiffa with John Richardson and David Metcalf

This is a book about negotiations that will delight those of the analytical bent, the game theorists and the mathematicians. It is also a book that is filled with behavioral insights, decision-making analyses and solid advice on the individual facets of the broad spectrum of negotiations. Alas, it is not every person’s cup of tea. In fact, many will find its charts, graphs and mathematical equations downright intimidating. There is, however, significant wisdom to found in this work that the student of negotiation will find invaluable with more than a cursory examination.

Howard Raiffa is the Frank R. Ramsey Professor of Managerial Economics (Emeritus), Harvard Business School and its Kennedy School of Government. He is also one of the co-founders and long-time members of the Executive Committee Program on Negotiation at the Harvard Law School.

Professor Raiffa is a practiced negotiator and mediator, a well-known author and «a card-carrying Ph.D. in mathematics, who thinks like a mathematician» (p.xi). He thinks of himself, he tells his reader, » not as a game theorist, or statistician, or negotiation analyst but primarily as a decision analyst» (p. xii). Based upon a lifetime of work «… in decision analysis, behavioral decision analysis, game theory, and negotiation analysis … [this book is designed] …to develop and synthesize these four approaches to decision making» (p.xiii). Its stated goal «…is to suggest how people … might negotiator better»(p.3). It is a remarkable work and an excellent addition to the literature of negotiation.

Let us sample just one of the wide-range of topics to better understand its achievement. We will touch briefly on its section on preparation. «Negotiators who neglect preparation,» the authors tell us, «do so at their peril» (p.195). Indeed, it is so. What will we find here on this critical topic: a great deal of valuable information about preparation and the essential key to this book.

As the authors introduce the topic of preparation, they tell us clearly both the challenge and the importance of this book in nutshell. «We will be giving advice to negotiators with a high tolerance for analytical thinking,» the authors warn the reader (p.195). This said, it is the line that follows that makes the case for readers of all persuasions to explore this work. (Italics added by this reviewer). «But negotiators who are not so inclined should also carefully consider the advice given and explore topics that are not ‘natural’ to their proclivities» (p.195).

Let us test out this last statement by turning to the preparation topic that many negotiators avoid or handle with short shrift, perhaps, judging it as «not ‘natural’ to their proclivities». The authors suggest that preparation for negotiation is a three-phase process.

Phase I engages the team in a private review of the «the details of the enterprise» before them (p.197). Here, the interests, future goals, potential options, outside criteria, alternatives and, of course, the uncertainties inherent in the proposed deal are carefully analyzed. This is the time when the whats, whys, and hows take center stage.

Phase II is the pre-negotiation or first-negotiating phase when the parties join together to discuss logistics, goals, process, preliminary steps and responsibilities and, of course, «test the waters» to decide about the wisdom of continuing toward formal negotiations. It is also the time, the authors argue, when the two parties can agree to work together to construct a template or framework for the future negotiations. Here, the authors point out, the parties «have to decide what needs to be decided» in the negotiations (p.206). The work includes an extensive discussion and analysis of the template device.
Phase III, of course, is a regrouping of the individual team to revisit the negotiating goals and process based on the information acquired in the earlier planning sessions. In this last planning session enterprise, refinement of alternatives, options, concessions and minimum returns to effect an agreement is the order of the day.

For the reader who is uncertain about how to best prepare this section should be essential reading. You will learn much about the process. It is solid and important advice. For some of an analytical mind, this will provide the ideal template itself. For others who do not share this bent, it will prove indispensable to understanding both their analytical colleagues and other negotiating parties. For all negotiators, it is a valuable review of the planning process that is so often neglected and so critical to finding the best deal possible in a negotiation.

There is, of course, far more in this book than this review can touch upon. As examples, you will find an excellent examination of «negotiation biases, anomalies and errors,» clear illustrations of the importance of quantifying probabilities and its central integration of decision-making perspectives first-rate. You will also find it replete with interesting situations and assessments.

Most readers will find this work is a reference on many topics that can be comfortably sampled through many visits rather than in a single exploration. For the analytical negotiator it is certain to prove a treasured classic in a sea of behavioral and anecdotal negotiating books.

This is a book that draws upon extensive research, covers a wide array of topics and fields and is carefully conceived and written. The authors have included a valuable bibliography, an interesting discussion of sources and a full index that readers will appreciate.

Highly recommended.  As reviewed by Negotiations Magazine

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