ORGS 4560 Lecture Notes - Lecture 8: Egocentrism

• School: York University
• Department: Organization Studies
• Course: ORGS 4560
• Professor: Indira Somwaru

Document Summary

Betting on the future: the virtues of contingent contracts. Many negotiations collapse over differences of opinion about how the future will unfold. Companies need to realize that it"s often better to bet on uncertain events than to argue about them. Differences of opinion about future events don"t have to be bridged; they become the core of the contingent contract. Contingent contracts are often ignored or rejected b/c: parties unaware of the possibility of using it, seen as a form of gambling, most companies lack a systematic way of thinking about the formation of it. Difference can be constructive provide basis for tradeoffs contingent contracts enable negotiators to avoid long, costly arguments -> can focus on their real mutual interests, not on their speculative disagreements. By enabling each side to bet on its bias, the contracts remove the biases as sources of contention and ultimately have the effect of canceling them out altogether.