Between (In)Efficiency and (In)Effectiveness: Uncertainty, Risk and Benefits of Routine in Negotiation
18 Pages Posted: 16 Sep 2007
Date Written: September 14, 2007
In this paper we explore the relationship between routine, risk and uncertainty in repeated negotiations. We link our analysis to the analytical framework of Kesting and Smolinski (2007), based on which we identify and discuss three major points: the risk connected with the decision to develop routine; the uncertainty related to the process and the outcome of a negotiation and its tendency to decrease with increasing routinization of negotiation processes; the risk of overlooking or ignoring relevant context changes and as a consequence ineffectiveness in the application of acquired routine. We also briefly analyze the connection between negotiators' individual risk preferences and their impact on the efficiency and effectiveness of negotiation results. We summarize these points in a simple model and discuss their consequences for theory and practice of negotiation.
Keywords: negotiation, routine, risk preference, uncertainty, knowledge, skills, efficiency, effectiveness
JEL Classification: D79
Suggested Citation: Suggested Citation