This course deals with the rational, scientific approach to negotiations. We will use cooperative and non-cooperative game theory to analyze the strategic aspects of different negotiation situations. We will also review the empirical evidence which psychologists,  economists, and management scholars have discovered about how real people approach negotiations. This will also help us to understand the common mistakes people make in negotiations. 

In particular, we will cover the following topics:

• Noncooperative game theory: Nash equilibrium, subgame perfection
• Bargaining: Dictator, Ultimatum, Markets, Outside options
• Repeated bargaining, Rubinstein ad BaronFerejohn model
• Commitment, first and second mover advantages
• Communication
• Agency
• Committees and voting, agenda setting
• Cooperative game theory: the Core and Shapley value
• Unrestricted bargaining, coalition building
• Perception, Cognition, and Emotions
• Decision biases and their impact on negotiation
• Group vs. individual behavior
• Individual differences in negotiations (personality, gender, culture)
• Integrative vs. distributive negotiations

At the end of this course you will be able to tell whether Donald Trump (ghostwriter-supported author of “The Art of the Deal”) is indeed a brilliant deal-maker or just a pompous buffoon with little clue about negotiating, or anything between. You should be able to approach real-world negotiations in a rational, analytical way, allowing you to reach the optimum given the circumstances and your negotiation power. You will have had insights and training in strategic thinking, cognitive decision-biases, and negotiations.

Please note that full attendance is expected for all lectures and experiments.
If you cannot attend a lecture due to exceptional/unforeseen circumstances, please contact the lecturer / IMS administration by email, and we will deal with the absence on a case-by-case basis. 

This course will be taught in English.

A written pre-assignment kicks off the course.

Each class will be a mix of

• Lecture (usually on theoretical background and/or scientific empirical evidence)
• Classroom experiments
• Strategic analysis tasks (in groups)
• Case studies with roleplay exercises
• Case study discussions

Through the plenty practical tasks you will experience many different negotiation situations first hand. This trains your empathy, strategic thinking, and social interaction skills.

There will be plenty of room for discussions. Between classes, you will be expected to work on homework preparing the next class, usually analyzing classroom experiment data or preparing a case study. Analyzing the situations and your own decisions with formal and informal tools, and preparing case studies based on your own reasoning, lets you practice logical thinking, sharpens your economic intuition, and improves your knowledge about negotiation behavior.
 

Written Pre-assignment 10%

Participation and homework assignments (tested via cold calls) 40%

Exam 50%

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