Simple Model of Negotiation

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Abstract
The objective of the paper is to state a simple theory of negotiation, one that is both realistic and testable. The basis of this theory is the notion, stated most clearly by sociologist George Homans, that men strive to create and maintain the conditions of justice. To this notion is added the fact that the well-known Nash solution to bargaining games not only is consistent with Homan's notion of justice but also is reached frequently in experimental negotiations. Given these ingredients, the paper hypothesizes that negotiators view the midpoint between their past demands and offers as just and strive to achieve it. Various implications of this hypothesis are explored.

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