Negotiating with Nonlinear Subjective Utilities: Why Some Concessions Are More Equal Than Others

Abstract

An implicit but unnecessary assumption of the traditional logrolling approach to integrative negotiations is that disputants have linear subjective utility functions. The analysis of bargaining concessions described in this paper uses linear subjective utilities as a point of departure and explores the implications of non-linear subjective utilities for the process of valuing concessions and trade-offs in negotiation exchanges. Several apparent paradoxes are revealed and discussed. The analysis concludes by examining the implications of preference function mutability in light of non-linear subjective utility functions. Implications for negotiation theory and practice are discussed, including the possibility of a "concession evaluation heuristic" by which disputants confuse the relative importance of specific concessions with the relative importance of the issues on which those concessions are given and taken.