The underiying commitment to carry it out is binding

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the underIying commitment to carry it out is binding, credible, visi- ble, and irreversible. THE RISKS OF COMMITMENTS Making a commitm_~E~ risk.LLrnQ~.l~~, iLth~_Qtº"~!l?2rJy_º,~};gm~~ !m~Oii!.P.~ibri .committ~d •. M~Eeo~r,.~~Ln~~ºiiª1ºi".,!!imJl1y~qQ~S<11.Qt ~~.9w~l~J;gpart's ,r~&yaÜ.Qns~l!ly~~ With bad luck, too greedy a commitment may be unacceptable and, if irrevocable, will cause a breakdown~ Not surprisingly, sorne commitments, especially bIunt ones, Iead to bargaining explosions. The victim may not like the precedent be- ing set for the styIe of future dealings. Or conceding to a blunt com- mitment may involve sufficient los s of face as to be undesirable; the commitment can start a destructive escalation of conflict. Commitments based on "fair" principIes and social norms are - ---_._--.~.-._-----_ .. _.--.-- .--_._------- ----_ .. _._- -_ .. -~._._.~,_.-. - .. _.-,- •.. __ .-- .... - -' ._ .. -- ... " ..... ' likely to be-.l!lºJ.:~ _~Jf~~tiy~.thªº tJwse .. 1Jl.ade . to apparently arbitrary positions-~'(Like committing to a position, one commits to a principIe by imposing costs on oneself for abandoning that principIe.) This may be true for reasons beyond any natural appeal of focal points. A number of studies suggest that when a bargainer attributes his concession to his own weakness and the counterpart's strength, a blowup is likely. The bargainer would lose face or self-esteem by con- ceding. When this new interest (face) is included, he may find that no agreement, which retains self-esteern, is better than an agreement that seems to sacrifice it. This might well be the case for Botts when Cadwalader makes his bet or when someone stubbornly insists on an apparently arbitrarily chosen $104 settlement without any explana-
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130 Negotiation Analysis tion. In contrast, when the bargainer can attribute the concession to something outside the two parties such as a mutuaHy recognized norm, concession may not cause a loss of self-esteem. One might commit to refusing an employee a raise in various ways that do not risk his losing face in the dealing. For example, one may argue that such a raise would set an unacceptable precedent for aH other em- ployees in the same job grade or that one's boss would not accept it. S kill fuI commitments to norms and external standard s are more likely to lead to concessions than commitments to more arbitrary po:nts. lO Commi tments and ,imp[ºY~l!1"~fltS" iD.ºnY,"$JIQ:ªgg:~mYD tªlt~m~t:, tives~.;rrf:.:§.º.m:~~hiCsQmPl~m~Qt'!IX.J.ªS!i~s.. Bargainers must nor~ maHy expend resources to employ either. But commitments are risky because they are difficult to make credible, binding, visible, and irre- versible and because they may faH outside the bargaining set. Finding a better alternative does not incur these liabilities. Moreover, one's commitment is vulnerable both to the other side's prior commitment and to an improvement in its alternative. An improvement in one's alternative, though, cannot be superseded by prior or subsequent commitments. A threat, of course, may hold the possibility of wors- ening the opponent's original (or even improved) alternatives. Bluff- ing a commitment or that one has an improved no-agreement alter-
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  • Spring '15
  • Business Law, Bargaining, reservation value, negotiation analysis, Botts

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