he government and the truck drivers have to resolve three issues:
The objective of this case study is to apply multi attribute value analysis to a negotiation problem involving two parties and several issues so that a deal which is to the mutual benefit of both parties can be reached.
It is advisable to use a spreadsheet to calculate the values to each party of each of the 24 possible deals.
Your excel spreadsheet will show which deal is the most favorable to all parties. This involves:
Apply decision analysis to the truck drivers’ negotiation problem and advise the participants on their decision problem. Clearly state any assumptions you have made.
TheTruck Drivers’ Dispute
Case Study
A non-EU European country has recently been paralyzed by the direct action of truck drivers who are angry at a package of regulations that the government is considering introducing. Discussion between the government and representatives of the truck drivers is now taking place at a secret location to try to resolve the dispute. Three issues need to be resolved:
The possible number of driving hours that could be agreed are given below, together with the chief government negotiator’s rough assessment of the values which each side would place on each
outcome (100 = best outcome, 0 = worst outcome).
Max. No. of driving hours Drivers’ value Government value
| 11 | 100 | 0 |
| 10 | 60 | 80 |
| 9 | 40 | 90 |
| 8 | 0 | 100 |
For the fuel tax issue, only two levels are possible- either the tax will be imposed or not. However, for the arrested drivers three outcomes are possible i) serious charges ii) minor charges and iii) charges dropped. Estimates of the values that the negotiating parties put on these outcomes are set out below.
Level of charges Drivers’ value Government value
| Serious | 0 | 100 |
| Minor | 80 | 90 |
| No charges | 100 | 0 |
The government’s negotiator has also estimated weights to reflect the relative importance that the parties attach to swings from the worst to best position on each issue. For the drivers avoiding reducing the maximum number of driving hours from 11 to 8 is thought to be the most important swing. Avoiding the introduction of the fuel tax is thought to be only 10% as important as this, while the reduction of the level of charges against the arrested workers from serious to no charges is 50% as important.
For the government introducing the fuel tax is the most important swing. Reducing the maximum number of driving hours from 11 to 8 is 60% as important as this, while avoiding reducing the level of charges against the drivers from serious to no charges is only 40% as important.
The following tentative deal has been reached:
Question
Apply decision analysis to the truck drivers ‘negotiation problem and advise the participants on their decision problem. Clearly state any assumptions you have made.
In the case study of the truck drivers’ dispute with the government, three critical issues must be resolved through negotiation: the maximum number of hours drivers can legally drive per day, the introduction of a special fuel tax, and the charges against ten arrested drivers. To arrive at a mutually beneficial deal, a decision analysis approach can be applied. This analysis aims to assess the tentative deal proposed, which includes reducing the maximum driving hours to 9, imposing the fuel tax, and dropping charges against the arrested drivers. Additionally, certain assumptions will be made to facilitate the analysis.
The decision analysis framework involves evaluating the proposed deal by assigning values to each party for each possible outcome of the three issues: driving hours, fuel tax, and charges against arrested drivers. To calculate these values, we use the information provided in the case study.
Maximum Driving Hours
The maximum hours offered in the tentative deal is 9 hours per day.
The truck drivers value this at 40 points, while the government values it at 90 points.
Weights: The swing from 11 to 8 hours is the most important for the drivers (100% weight), and for the government, it is 60%.
Fuel Tax
The tentative deal imposes the fuel tax.
The drivers value this at 0 points, while the government values it at 100 points.
Weights: For the drivers, this issue is only 10% as important as the driving hours reduction, while for the government, it is the most critical swing.
Charges against Arrested Drivers
The tentative deal involves making no charges against the arrested drivers.
The drivers value this at 100 points, while the government values it at 0 points.
Weights: Reducing charges from serious to no charges is 50% as important for the drivers and 40% for the government as the other issues.
To calculate the values of the proposed deal, we apply the weights to the values assigned to each issue.
Drivers’ Total Value
Maximum Driving Hours: 40 (weight 100%) = 40 points
Fuel Tax: 0 (weight 10%) = 0 points
Charges against Arrested Drivers: 100 (weight 50%) = 50 points
Total Value for Drivers = 40 + 0 + 50 = 90 points
Maximum Driving Hours: 90 (weight 60%) = 54 points
Fuel Tax: 100 (weight 100%) = 100 points
Charges against Arrested Drivers: 0 (weight 40%) = 0 points
Total Value for Government = 54 + 100 + 0 = 154 points
Based on the decision analysis, the proposed deal is evaluated as follows:
For the truck drivers, the deal has a total value of 90 points.
For the government, the deal has a total value of 154 points.
The government stands to gain more from this deal, with a significantly higher total value compared to the drivers. The primary reason for this discrepancy is the imposition of the fuel tax, which the government values the most. Therefore, the proposed deal may not be equitable for the drivers.
Given the analyzed values, it is advisable for the truck drivers to reconsider the proposed deal. To achieve a more balanced outcome, the drivers should negotiate for a reduction in the maximum driving hours, while seeking concessions from the government on either the fuel tax or the charges against the arrested drivers. This would create a more mutually beneficial agreement that takes into account the interests of both parties.
The weights assigned to each issue represent their relative importance accurately.
The values assigned to each outcome accurately reflect the preferences of the negotiating parties.
The analysis assumes a rational decision-making process by both the truck drivers and the government.
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