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Why do people in a business negotiation settle for less than each of them could and should receive? Two rational players face off in an economic game. Each pursues interests as conventional theory dictates, but all too often, the result is suboptimal. Why do they fail to capture what Dr. Young calls the cooperative surplus? Dr. Young proposes that the root of the problem lies in the philosophical assumptions underlying decision and game theory. The common understanding of economic rationality is fundamentally flawed, he says. It assumes that rational players are always self-interested and that they will make decisions on the basis of consequences. Arguing that no theory of economic rationality developed from this foundation can lead to the desired prescriptive results, Dr. Young maintains that a successful prescriptive theory of rationality must start from a different premise: the notion of actors as autonomous agents who act over and above their inclinations to express their identity.
Dr. Young advances his own notion of economic rationality, then seeks to establish rules by which rational economic players can jointly create a common base for business negotiation. The results of bargaining will then be in equilibrium, and a solution optimal to both sides can be reached. Already praised by philosophers in Europe for its innovative vision and practicality, this book is a must for business executives and attorneys engaged in business negotiations, as well as for their colleagues with similar interests in the academic community.
List of contents
Summary of the Argument
What Is Economic Rationality?
The Problem: Opportunities Lost
The Roots of the Problem
Gauthier's Proposal: A Strategic Bargaining Solution
Elements of Considered Economic Rationality
Negotiating on the Basis of Considered Economic Rationality
Case Studies: The Privatization of Electricity Distribution
Beyond Negotiating Success
Bibliography
About the author
MARK A. YOUNG, after an impressive career with Price Waterhouse, McKinsey & Company, the U.S. Department of Commerce, and major banks in Boston and New York, is now an independent consultant based in Berlin./e He holds a doctorate degree in philosophy from Humboldt-Universitat Zu Berlin and has lectured at universities in Europe and in the United States. Although his first love has always been philosophy, Young's aim is to apply philosophical insights to practical problems in the business world.
