February 2002

IZA DP No. 421: Divide et Impera: Negotiating with a Stakeholder

fully revised version with Clara Ponsati published in: Mathematical Social Sciences, 2005, 50 (2), 166-180

In many kinds of bilateral negotiations the resolution of the issues at stake has an impact which extends beyond the remits of the parties directly involved (e.g. labour negotiations in sectors of public interest, where a strike would impact on the public at large). Once this is recognised, negotiations ought to account for the interests of such stakeholder, whose stake is linked to the original negotiations. This interplay of different interests may introduce a strategic incentive to delay agreement in order to win the maximum concessions from one's opponents.