The Limits of Integrative Bargaining

Abstract

This article discusses integrative bargaining. Opportunities for integrative bargaining are often unrecognized and unexploited. As a result, both the parties to negotiations and society as a whole are worse off than would otherwise have been the case. The article offers three conclusions. First, opportunities for integrative bargaining are not nearly as pervasive as is sometimes authoritatively asserted. Second, the claim that opportunities for integrative bargaining make good behavior a simple matter of rational, pecuniary self-interest is not nearly as strong as is sometimes claimed, both because opportunities for integrative bargaining are less pervasive than has been asserted and because, even when such opportunities may exist, the case for good behavior is weaker than has been claimed. Third, and accordingly, the case for good behavior cannot rest entirely on pecuniary self-interest. The article then outlines the opportunities for integrative bargaining, which includes differences between the parties in terms of (1) their interests, (2) their projections concerning possible future events, (3) their willingness to accept risks, and (4) their time preferences regarding payment or performance.