Win-Win, Win-Lose, and Lose-Lose Situations
Win-win, win-lose, and lose-lose are game theory terms that refer to the possible outcomes of a game or dispute involving two sides, and more importantly, how each side perceives their outcome relative to their standing before the game.
Writing in Beyond Intractability, Brad Spangler (reference below) notes that a “win” results when the outcome of a negotiation is better than expected, a “loss” when the outcome is worse than expected. Two people may receive the same outcome in measurable terms, say $10, but for one side that may be a loss, while for the other it is a win. In other words, expectations determine one’s perception of any given result. He summarizes the three situations as follows:
- Win-win outcomes occur when each side of a dispute feels they have won. Since both sides benefit from such a scenario, any resolutions to the conflict are likely to be accepted voluntarily. The process of integrative bargaining aims to achieve, through cooperation, win-win outcomes.
- Win-lose situations result when only one side perceives the outcome as positive. Thus, win-lose outcomes are less likely to be accepted voluntarily. Distributive bargaining processes, based on a principle of competition between participants, are more likely than integrative bargaining to end in win-lose outcomes – or they may result in a situation where each side gets part of what he or she wanted, but not as much as they might have gotten if they had used integrative bargaining.
- Lose-lose means that all parties end up being worse off. An example of this would be a budget-cutting negotiation in which all parties lose money. Cuts are essential – the question is where they will be made and who will be hurt. In some lose-lose situations, all parties understand that losses are unavoidable and that they will be evenly distributed. In such situations, lose-lose outcomes can be preferable to win-lose outcomes because the distribution is at least considered to be fair.
The prisoner’s dilemma and reframing negotiations
Spangler describes how lose-lose outcomes occur when win-win outcomes might have been possible.
“The classic example of this is called the prisoner’s dilemma in which two prisoners must decide whether to confess to a crime. Neither prisoner knows what the other will do. The best outcome for prisoner A occurs if he/she confesses, while prisoner B keeps quiet. In this case, the prisoner who confesses and implicates the other is rewarded by being set free, and the other (who stayed quiet) receives the maximum sentence, as s/he didn’t cooperate with the police, yet they have enough evidence to convict. (This is a win-lose outcome.) The same goes for prisoner B. But if both prisoners confess (trying to take advantage of their partner), they each serve the maximum sentence (a lose-lose outcome). If neither confesses, they both serve a reduced sentence (a win-win outcome, although the win is not as big as the one they would have received in the win-lose scenario).
“This situation occurs fairly often, as win-win outcomes can only be identified through cooperative (or integrative) bargaining, and are likely to be overlooked if negotiations take a competitive distributive) stance.
“The key thing to remember is that any negotiation may be reframed (placed in a new context) so that expectations are lowered. In the prisoner’s dilemma, for example, if both prisoners are able to perceive the reduced sentence as a win rather than a loss, then the outcome is a win-win situation. Thus, with lowered expectations, it may be possible for negotiators to craft win-win solutions out of a potentially lose-lose situation. However, this requires that the parties sacrifice their original demands for lesser ones.”
Brad Spangler (2003), updated by Heidi Burgess (2013), Win-Win, Win-Lose, and Lose-Lose Situations, Beyond Intractability, at http://www.beyondintractability.org/essay/win-lose, accessed 25 March 2016.
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Page created by: Ian Clark, last modified on 25 March 2016.
Image: Suze Cumming, LinkedIn Pulse, at https://www.linkedin.com/pulse/batna-best-alternative-negotiated-agreement-suze-cumming, accessed 25 March 2016.