What is Distributive Bargaining?
Distributive bargaining, also called "claiming value," "zero-sum," or "win-lose" bargaining, is a competitive negotiation strategy that is used to decide how to distribute a fixed resource, such as money. The parties assume that there is not enough to go around, and they cannot "expand the pie," so the more one side gets, the less the other side gets.
Why Is Distributive Bargaining Important?
Distributive bargaining is important because there are some disputes that cannot be solved in any other way -- they are inherently zero-sum. If the stakes are high, such conflicts can be very resistant to resolution. For example, if budgets in a government agency must be cut 30 percent, and people's jobs are at stake, a decision about what to cut is likely to be very difficult. If the cuts are small enough that the impact on employees will be minor, however, such distributive decisions can be made more easily.
Even in cooperative negotiations, distributive bargaining will come into play. Distributive bargaining and integrative bargaining are not mutually exclusive negotiation strategies. Integrative bargaining is a good way to make the pie (joint value) as large as it can possibly be, but ultimately the parties must distribute the value that was created. If they are able to expand the pie enough, distribution is easy. If there is still not enough to give each side what it wants, however, distributive negotiation will be more difficult.[1]
The Pros and Cons of Distributive Bargaining
Some conflict resolution theorists believe that distributive bargaining is unnecessary. Any conflict, they argue, may be solved cooperatively through integrative bargaining. For example, in their book Getting to Yes, Fisher, Ury, and Patton argue that with creativity, disputants can almost always work together to "expand the pie" and create outcomes that benefit both sides.[2] Even when budgets have to be cut, they would argue, the parties make the decisions together so that all sides get the best possible outcome. Distributive bargaining has also been criticized because it tends to lead to destructive actions and sometimes forces the involved parties to focus too much on their differences. If people want to maintain a good relationship with one another, it is argued, they should take an integrative approach to distribution as well as expansion of the pie.
However, in cases where the "negotiator wants to maximize the value obtained in a single deal and when the relationship with the other party is not important," distributive bargaining tactics may be very useful.[3]
Process and Strategy in Distributive Negotiations
The process of distributive negotiation involves the interplay of one's walk away value -- the minimum or maximum one can accept before "walking away" from the deal -- and the adversary's walk away value. The trick is to get an idea of your opponent's walk away value and then try to negotiate an outcome that is closer to your own goals then theirs. Whether or not parties achieve their goals in distributive bargaining depends on the strategies and tactics they use.
Information is the key to gaining a strategic advantage in a distributive negotiation. You should do your best to guard your information carefully and also try to get information out of your opponent. To a large extent, your bargaining power depends on how clear you are about your goals, alternatives, and walk away values and how much you know about your opponents'. Once you know these values, you will be in a much stronger position to figure out when to concede and when to hold firm in order to best influence the response of the other side.
[1] The idea that integrative or interest-based bargaining will always include distributive bargaining too was originally put forth by David Lax and James Sebenius in The Manager as Negotiator: Bargaining for Cooperation and Competitive Gain, 1986.
[2] Fisher, Ury, and Patton, Getting to Yes: Negotiating Agreement without Giving In. (New York: Penguin Books, 1991.)
[3] Ibid, p. 71.
Use the following to cite this article:
Spangler, Brad. "Distributive Bargaining." Beyond Intractability. Eds. Guy Burgess and Heidi Burgess. Conflict Research Consortium, University of Colorado, Boulder. Posted: June 2003 <http://www.beyondintractability.org/essay/distributive_bargaining/>.
Sources of Additional, In-depth Information on this Topic
Additional Explanations of the Underlying Concepts:
Online (Web) Sources
"Distributive Bargaining." ,
Available at: http://www.colorado.edu/conflict/peace/treatment/distbarg.htm.
This page explains and gives examples of distributive bargaining. Distributive bargaining is an alternative to principled negotiation in which the parties assume that the conflict is structured in a win-lose way and the best strategy is to bargain over who is going to get how much. Distributive bargaining tends to be much more competitive and adversarial than principled negotiation, as each party tries to do better than the others in the negotiation. The page also includes suggestions for further reading on the topic.
Kersten, Gregory. "Modeling Distributive and Integrative Negotiations: Review and Revised Characterization ." ,
Available at: http://interneg.concordia.ca/interneg/research/papers/2000/02.pdf.
This paper examines and critiques the assumed contradictions between integrative and distributive negotiations, in light of evidence from new negotiation support software.
"Negotiations and Resolving Conflicts: An Overview." ,
Available at: http://web.cba.neu.edu/~ewertheim/interper/negot3.htm.
This web page offers a well-organized and fairly comprehensive overview of two primary negotiation strategies, integrated and distributive. It covers the key aspects of both approaches, provides information about creating and claiming value, and gives general advice about how to proceed in negotiation situations.
Offline (Print) Sources
Lax, David and James Sebenius. "Claiming Value." In The Manager as Negotiator: Bargaining for Cooperation and Competitive Gain. New York, NY: Free Press, January 1, 1986. Pages: 117-153.
Chapter Six of this work, "Claiming Value," discusses the dynamics of distributive bargaining situations. It concentrates on tactical advice for how to succeed in this type of negotiation.
Burgess, Heidi and Guy M. Burgess. "Definition of Distributive Bargaining ." In Encyclopedia of Conflict Resolution. ABC-Clio, November 1997. Pages: 107-108.
This section of the Encyclopedia of Conflict Resolution offers a discussion of distributive bargaining.
Watkins, Michael, Susan Rosegrant and Shimon Peres. "Distributive Negotiations." In Breakthrough International Negotiation: How Great Negotiators Transformed the World's Toughest Post-Cold War Conflicts. San Francisco: Jossey-Bass Publishers, 2001. Pages: 29-31.
This section of Breakthrough International Negotiation is about diagnosing the structure of negotiations and includes a description of what constitutes a distributive negotiation. Click here for more info.
Lewicki, Roy J., David Saunders and John Minton. "Strategy and Tactics of Distributive Bargaining." In Negotiation, 3rd Edition. Burr Ridge, IL: Irwin-McGraw Hill, 1999. Pages: 70-106.
This chapter describes the nature of distributive bargaining situations and offers advice on fundamental strategies and tactical tasks that will help one be effective in negotiation. The process of taking positions during bargaining and the role of concessions are thoroughly covered as are the issues of commitments and closing the deal. Lastly, the chapter describes hardball negotiation tactics for those wanting to really put pressure on their opponent. Click here for more info.
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Examples Illustrating this Topic:
Offline (Print) Sources
"Two Parties, One Issue." In The Art and Science of Negotiation: How to Resolve Conflicts and Get the Best out of Bargaining. Cambridge: Belknap Press, January 1, 1998. Pages: 33-130 .
Part II of Raiffa's Art and Science of Negotiation, entitled "Two Parties, One Issue," outlines several distributive bargaining scenarios. part of the work covers seven different chapters and is sprinkled with specific examples of distributive bargaining. The examples paint a clear picture of ways in which distributive bargaining can play out in real-life situations.
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