8.3 Positions and bargaining

There are two types of bargaining strategies. One is referred to as distributive bargaining and the other as integrative bargaining. The simplest form of negotiation is distributive bargaining. Here one party wants one item from the other. This is a win-lose situation. In such situations it is likely that one wins at the cost of the other. In such negotiations, each party has an aspiration position (a position that the party wants) and a reserve position (the lowest acceptable negotiating position). Agreement normally falls between the two reserve positions of the two Parties. If there is considerable overlap, it is possible that both Parties may be satisfied (Saner 2000, citing Walton and McKersie 1965).

If there is no overlap, then it is actually time for the Parties to discontinue negotiations, since one is only likely to be satisfied at a substantial cost to the other (Saner 2000).

In integrative bargaining, an attempt is made to breach the gap between the interests of the two Parties by developing a possible package of negotiating elements, in which each side gives something to the other side and vice versa. This is possible through issue-linkages to other issue areas. Thus, each party makes some concessions in different issue areas and together they reach relative satisfaction. This implies that both Parties must be ready to seek potential options for developing such issue-linkages and need to have something to offer each other.

In integrative bargaining, Parties can enlarge the space of agreement by identifying and discussing a range of alternatives, by improving the quality and quantity of information that is made available to the other Parties and by trying to influence the perception of the other party (Saner 2000). However, if only some Parties are engaging in integrative bargaining, and if the other party only reacts, the negotiations may not go in favour of the inactive party. This implies that the developing countries should develop proactive integrative strategies and not merely react to integrative bargaining strategies of the North.