The Negotiator Magazine

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Electronic Negotiation Support – a Look Behind the Curtain

David Ferguson

Today technology allows us to communicate with anyone, anytime, anywhere. Can it help us decide what to say?

Computers have beaten the best human chess players in the world. Can they compete in the game of life? Can they negotiate?

A few years ago the answer to these questions would have been “no”. Now Win Squared, a new software program by Arcadian Software, has taken the first step toward “yes”. It is the first software to analyze negotiations and recommend strategies and tactics tailored to its user’s goals, style and level of assertiveness.

Win Squared’s ability to analyze human interaction is based on several new ideas that allow negotiation to be formulized in a manner that a computer can interpret. These ideas involve objects, supply and demand, perceived value, tactics and activities.

The first idea is that the programming concepts of “objects”, “properties” and “events” can be applied to negotiation. In programming, “objects” are things such as pictures, letters and sounds. Each object has “properties” that define its exact nature. In a word processing program, for example, a letter is an object. The letter has properties such as font, size and color. It is subject to “events” such as click, double-click and right-click.

Win Squared applies this programming methodology to negotiation by defining “objects” as products, services, actions and inactions. Negotiation objects have properties such as quality, usefulness and scarcity. Each negotiation object is subject to events such as make proposal, debate proposal and sell proposal.

The second idea is that an object’s value is determined by the fundamental principles of supply and demand. The more desirable or useful an object is, the more someone will give to get it. The more scarce or unattainable an object is, the more someone will give to get it.

Win Squared applies this idea by relating all of a negotiation object’s properties to supply and demand. For example, quality and usefulness relate to demand while scarcity relates to supply. Altogether Win Squared defines twelve properties that affect value. In preparing its recommendations, it weighs each of the properties and then calculates the object’s overall “value”.

Win squared operates on the premise that negotiation is a process in which the parties seek to reach agreement on the relative value of their objects. The third idea, and perhaps the key to Win Squared, is the assumption that objects are exchanged on the basis of perceived value, not actual value. In other words, people primarily strike bargains in accordance with their individual subjective perceptions, not on the basis of objective quantifiable standards. Accordingly, the principles of supply and demand apply to the value perceived by the parties, not to some objective value determined externally by society or science.

This concept of perceived value creates a number of interesting consequences. First, the perceived value of an object may be very different for each party. A suburban soccer mom might value a minivan quite highly while a teenage boy might look at it with disgust. Second, the perceived value of an object can vary considerably with time. After a person spends an hour in the hot sun they may view a glass of water as considerably more valuable than they did previously.

The concept of perceived value also addresses the fact that Win Squared results are appropriately subjective. The purpose of the program isn’t to calculate some absolute exchange point between apples and oranges. Even if such a point existed, it might bear no relation to the subjective perceptions of the parties concerning apples and oranges. Instead, Win Squared seeks to affect the exchange point by determining and comparing the parties’ respective views. Given the subjective nature of the viewpoints, and the effect of time on the viewpoints, the exchange point will vary considerably from negotiation to negotiation and from time to time within each negotiation.

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