9781118041581

The Economic Sources of Beneficial Agreements 637 SETTLEMENT NEGOTIATIONS REVISITED Let’s return to the patent dispute, but now ...

judges its CE value for going to court at $800,000 (including court costs), and the large firm sets its CE at $1.1 million. Now ...

The Economic Sources of Beneficial Agreements 639 risks, this CE will be higherthan $50,000 (one-half the CE of 100 percent owne ...

high to be acceptable. Firm A computes the expected value at (.4)(22)  (.6)(12) $16 million, so it will pay no more than this. ...

Multiple-Issue Negotiations 641 though the member votes against his or her strict self-interest on the unim- portant issue). Thi ...

In negotiating a contract, firm A and firm B are considering three options. Firm A can supply firm B with a 97% pure compound, a ...

Multiple-Issue Negotiations 643 Michael Ovitz, exploring the possibility of dumping Leno and giving The Tonight Showto Letterman ...

in revenue, minus $15 million in “normal” production costs). The “top” entry of $9 million requires some explanation. This estim ...

Multiple-Issue Negotiations 645 NBC preserves most of its original revenue but must pay Letterman’s price and also must buy out ...

Continuous Variables In the earlier procurement example, identifying an efficient agreement was made easier by the limited numbe ...

Multiple-Issue Negotiations 647 profit increases as one moves north or west in the diagram, that is, as R increases (for fixed Q ...

To confirm this result, let’s start with an extreme example of an inefficientout- come: the no-agreement outcome (corresponding ...

Negotiation Strategy 649 is one from which at least one of the parties, and probably both, would have been willing to retreat fo ...

should reach an efficient agreement. The reason is simple. To settle for an inef- ficient agreement is to leave money on the tab ...

Negotiation Strategy 651 clearly how optimal bargaining behavior can result in a failure to attain cer- tain beneficial agreemen ...

can be said of bargaining: Under imperfect information, a certain amount of dissembling, playing one’s cards close to the vest, ...

Negotiation Strategy 653 the claim by itself, the company might find it cheaper to settle than to go to court. Nonetheless, on r ...

should always agree to a settlement to avoid the legal costs of going to court. The results are quite the contrary. Invariably, ...

Negotiation Strategy 655 April 1987.Texaco offers to pay $2 billion. Pennzoil refuses and demands $4.1 billion. Texaco refuses a ...

falls in Texaco’s stock price. Three events that were favorable to Texaco were marked by positive stock price movements.^10 In a ...