A theoretical framework exploring perceptions affecting decision-making behaviour of members in an alliance

Abstract

Negotiation and decision-making processes are complex interactions. People behave and perceive situations differently often having opposing opinions on the best course of action. This thesis considers perceptions that influence negotiation and decision-making behaviour of members in an alliance. Alliances are formed for the purpose of advancing a common interest or establishing an agreement. While alliance members have shared interests and goals, conflict can still exist. A game theory approach was used to develop the theoretical framework presented. The Crisis game by Vitz and Kite (1970) was chosen as the basis for the research. Crisis is set up as a NATO-type scenario. Members (players) must oppose an external threat by creating a defense fund containing resources contributed by the members. If members survive five threats and still hold resource units, they can convert these to cash as winnings. Using survival and economic gain the Crisis game captures the mixed-motive element common to many negotiation situations. While the game simulates this aspect of negotiation and decision-making well, this thesis argues that changes must be made to improve its range of application and generalizability. In addition to critiquing and revising the Crisis game, a new theoretical model of the game is presented. The model’s components are essential for developing of any model attempting to understand negotiation and decision-making behaviour. These components are: (1) perception of power, (2) perception of fairness, and (3) number of players (negotiators). Each component is based on solid psychological reasoning that includes elements of social impact theory and perceptions of previous negotiation processes. A general discussion of the model is given that outlines the advantages and disadvantages of the approach and areas for further research. The model presented addresses weaknesses of the original Crisis game and builds on other models of negotiation to capture a broader range of situations.