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  • Writer's pictureNick C.

“I think I should be able to sell this back home”, Understanding two-level negotiations

Updated: Feb 2, 2021

One of the lessons I was taught in my early days still echoes nearly two decades on: “Culture is the lens through which we see the world.”

It is no surprise then that international negotiations are complex. Take the already intricate game of information asymmetry, bolstered by different negotiating styles and myriad of tactics, and introduce different cultural lenses to interpret various actions or words.

To better understand negotiations, let us break them down to their fundamentals.

Firstly, two actors come to a table to reach a common ground. The reason they do it is because both parties believe there exists a set of beneficial outcomes that would elevate them, albeit not necessarily equally, from their starting position. In that regard, negotiations are not a zero-sum game. An agreement is sought because both parties stand to gain from it.

Secondly, an asymmetry of information means that objectives and relative importance of bargained elements are not known to the other party. This typically leads to some level of anchored openings, bluffs and bargaining tactics aimed at securing concessions from the other party.

Thirdly, agreement exists within a zone of acceptable outcomes between both parties. The area where the two zones of acceptable outcomes overlap is the agreement zone.

In a typical negotiation, actors will agree to meet, defining a common ground that could be reached, dance around the asymmetry of information a little bit and finally reach an agreement that benefits both parties.

International level negotiations add a little twist.

In 1988, Robert Putnam introduced the notion a two-level game to describe international conflict resolution. In his theory, he describes national coalitions back home as being essentially locked into another negotiation, and that across both negotiating states. To put it simply, what ever is agreed between two states must be sold back home as well. To put it in negotiation terms, the zone of agreement is further reduced to satisfy more actors.

The Brexit negotiations are a very vivid way to illustrate what takes place in a two-level game. For the sake of simplicity, we are going to ignore for now that the European Union is composed of 27 member states. When Boris Johnson, or Theresa May before him, postures a tough stance and makes bullish declarations to the English people, we are observing the second national level at play. Whatever the United Kingdom and the EU agree to needs to be accepted back home by the constituency. In pragmatic terms, the constituency is represented by various interest groups and political currents with parties restricting the zones of acceptable agreements.

The more interests one needs to satisfy, the less options one has to do so.

In the case of Brexit, the zone of agreement is extremely thin due to the number of member states involved and the identity politics that underpin it.

While international politics is perhaps the best way to illustrate two-level games, these mechanics are also applicable in the business world. When negotiating with a large corporation, you will often find that coalitions and diverging interests exist within. As a result, whatever is negotiated needs to be sold back home as well.

I recommend for people to always look at negotiations with the lens of the two-level game to better understand what may be at play when stances shift and positions change at various steps. What may be occurring is a second negotiation behind the veil.

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