Preferences in Negotiations

Abstract

The Nash equilibrium describes a principle according to which negotiators use strategies to maximize their profits. To this aim, negotiators have no incentive to modify their negotiation tactics. However, this balance may begin to sway if we analyze the negotiators’ preferences in more detail. In fact, the principle becomes very complex if we study the linguistic discrepancies of the terms involved in a negotiation. In this article we will first, study the preferences that are generated when certain terms are negotiated. Second, the terms are examined with regard to the whole context and third, according to their binding effect. Finally, linguistic discrepancies that may arise from different interpretations of terms will be analyzed. We will refer to the solutions provided by the legal system for such cases.