How it works

Negotiation software operates on the premise that negotiation is a process in which the parties seek to reach agreement on the relative value of their objects. The third idea, and perhaps the key to Negotiation software, is the assumption that objects are exchanged on the basis of perceived value, not actual value. In other words, people primarily strike bargains in accordance with their individual subjective perceptions, not on the basis of objective quantifiable standards. Accordingly, the principles of supply and demand apply to the value perceived by the parties, not to some objective value determined externally by society or science.

This concept of perceived value creates a number of interesting consequences. First, the perceived value of an object may be very different for each party. A suburban soccer mom might value a minivan quite highly while a teenage boy might look at it with disgust. Second, the perceived value of an object can vary considerably with time. After a person spends an hour in the hot sun they may view a glass of water as considerably more valuable than they did previously.

The concept of perceived value also addresses the fact that software results are appropriately subjective. The purpose of the program isn’t to calculate some absolute exchange point between apples and oranges. Even if such a point existed, it might bear no relation to the subjective perceptions of the parties concerning apples and oranges. Instead, software seeks to affect the exchange point by determining and comparing the parties’ respective views. Given the subjective nature of the viewpoints, and the effect of time on the viewpoints, the exchange point will vary considerably from negotiation to negotiation and from time to time within each negotiation.