Negotiation as a Learning Process

TL;DR: In this paper, the role of adapting expectations in the bargaining process is discussed and the influence of the learnmg process on the settlement point is described as well as some empirical implications of the theory in general.

Abstract: This paper presents a discussion of the role of adapting expectations in the bargaining process. Negotiators are charactenzed as persons who choose bargaining strategies in their attempt to optimize their payoffs from the situation. These strategies are contingent on each party's perception of the strategy of his opponent, and if these perceptions contain errors, expectations will change and this will lead in turn to a modification of each party's strategy choice. The payoff demands and manipulative moves which charactenze the bargaining process are seen as combinations of actions which are specified in the original bargaining plans of the parties and of changes in the plans themselves. The influence of the learnmg process on the settlement point is described as well as some empirical implications of the theory in general.