George and Martha are about to be divorced, and have reached agreement on all issues but one–child support. They are in different tax brackets, and value child support and alimony differently. Both sides have chosen a representative to negotiate a decision.
Divide the class into teams of two, distribute the instructions, and allow approximately 10 minutes for participants to read and prepare a strategy. Following this preparation period, allow participants approximately 20 minutes to negotiate the case. Debrief the negotiation for about 45 minutes.
This case illustrates the danger of single-issue bargaining. Should the participants limit the negotiation to a monetary dispute, George and Martha will be locked in a contest of wills. Hard bargaining may well emerge, resulting in a situation in which one party’s gain means a corresponding loss to the other party.
Despite George and Martha’s diverging preferences in characterizing payments, it is possible to obtain mutual gain by trading on the two parties’ attachments to their relative interests.
This exercise demonstrates the feasibility of Howard Raiffa’s notion of post-settlement settlement. As it is designed, the lesson points out that a “win-win” solution is possible when the parties closely analyze their interests and their potential for mutual gains. The failure to identify interests and invent options in a negotiation may lead to failure to reach any agreement, let alone an optimal one.