Trade Union Negotiation and Strikes Essay Example | Topics and Well Written Essays - 1500 words

Trade Union Negotiation and Strikes - Essay Example While the trade negotiations can be, and often are, filled with emotional hot buttons for both parties, game theory gives the parties tools to use to evaluate their prospective positions, and weigh the possible outcomes of their negotiations, and hence arrive at an agreement which is mutually beneficial for all parties, a win - win situation if you will. Too often, trade negotiations can devolve into a win-loose argument, in which the management is seen as taking from the unions in order to gain for itself, or vice versa. When the trade talks head in this direction, the parties seldom are able to make positive progress toward goals which can benefit both management and labor. Only be reaching toward a cooperative agreement can they create a positive work environment, and a financially healthy company. To understand how game theory benefits labor negotiations, one must first understand the five elements of game theory The game theory is defined as an interaction between a number of parties in which the following five elements are present. 1. The players: there are a defined number of players with defined roles. Game theory must identify how many players there, and whether or not natural elements outside the persons play a role, or if chance can play a role in the decisions. 2. The conditions or roles of the players: The players must be understood, along with their possible decisions. In other words there should be a minimal number of known decisions which the parties can undertake in order to apply game theory. 3. Information: the information which the players have with which to make decisions should be known. In other words, all the variables in the negotiations must be known in order to assist the parties using game theory. 4. Payoff Consequences: the parties must know what the course of their decisions will produce. Parties must know and understand what will be the consequences of choosing A or B or C in the negotiations. 5. Player preferences: Finally, a thorough knowledge of the preferences which the players would like to pursue should also be on the table. (see Duffy, 2003) When these 5 elements are known by the participants in the trade negotiations, then game theory can help them move toward effective resolution of their issues, as well has help them understand the payoff and the costs of their respective decisions. Game theory is often called a means for making moral decisions. The theory seeks to find a solution which works toward the benefit of the greatest number of people, maximizing all parties return. Thus, the theory's outcome has been compared to morality in decisions making. However, one way to undermine the effectiveness of this theory is for parties to come to the table with the assumption that their particular perspective or their desired outcome is the moral high ground. This assumption by one of the parties is a sure path toward defeating the effectiveness of game theory. According to Hardin (1988, 2003, negotiators should be wary of moral theorists that claim universality for their