Reading : Four key concepts
When I read the article 'Four key concepts' in order to better understand the topics we dealt with in our first class (such as distributive and integrative bargaining, the ZOPA, or the BATNA), I did not really understand the notion of Reservation Price, or better said, it took me some time to understand how vast and variable this notion could be.
Indeed, when the deal you need to make is only about money, there is no problem : the Reservation Price is actually a sum of money, as it is shown in the example of the office space rent. However, when the deal is not primarily about money (at least for one of the two parties), how can you define the reservation prices ? I thought about that when studying the 'Google in China' case : what are Google's and the Chinese regime's reservation prices in this particular case ?
We understand that there are a few very important issues at stake for Google in these negotiations : gaining importance on the Chinese market, thus augmenting the company's revenue, but also complying to the Chinese law regarding censorship without compromising their reputation and their work ethics, which would make them subject to critics from Western countries. So what would be their reservation price ? What is it that would define the 'least good' condition of their obtention of a Chinese domain name ? Would it have something to do with how many laws they would have to comply to and how much of a conflict with their Code of Conduct these laws would create ?
The same questioning applies to China's regime. One can wonder how far they are willing to go in the compromises in order to get Google to be in China, which would be a victory for the regime since it is a technologically advanced firm and employs one of Asia's most admired scientists. What basic rules does the regime want the company to respect ? Would the regime agree to let go of some of its requirements or not ?
Thanks to the article and the 'Google in China' case I realized that the notion of Reservation Price is much more complex than it sounds, and that why it is the one that got my attention.
Indeed, when the deal you need to make is only about money, there is no problem : the Reservation Price is actually a sum of money, as it is shown in the example of the office space rent. However, when the deal is not primarily about money (at least for one of the two parties), how can you define the reservation prices ? I thought about that when studying the 'Google in China' case : what are Google's and the Chinese regime's reservation prices in this particular case ?
We understand that there are a few very important issues at stake for Google in these negotiations : gaining importance on the Chinese market, thus augmenting the company's revenue, but also complying to the Chinese law regarding censorship without compromising their reputation and their work ethics, which would make them subject to critics from Western countries. So what would be their reservation price ? What is it that would define the 'least good' condition of their obtention of a Chinese domain name ? Would it have something to do with how many laws they would have to comply to and how much of a conflict with their Code of Conduct these laws would create ?
The same questioning applies to China's regime. One can wonder how far they are willing to go in the compromises in order to get Google to be in China, which would be a victory for the regime since it is a technologically advanced firm and employs one of Asia's most admired scientists. What basic rules does the regime want the company to respect ? Would the regime agree to let go of some of its requirements or not ?
Thanks to the article and the 'Google in China' case I realized that the notion of Reservation Price is much more complex than it sounds, and that why it is the one that got my attention.
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