Guaranteed Collaborative Outcome

In case of no agreement at the end of Final Session, Smartsettle negotiators may choose the assistance on an Expert Neutral Panel (usually three people) to close the deal for them. This unique and face-saving way of guaranteeing a deal also encourages early fair concessions. This method is called the Expert Neutral Deal-closer (END).  END rewards fairness without identifying a clear loser (unlike Pendulum Arbitration). In so doing it maintains a good atmosphere for continued harmonious relationships.

How it Works

If parties agree to the intervention of the END and no agreement is reached at the end of Final Session, Smartsettle uses the opinion of an Expert Neutral to favor the party whose last accepted value was closest to fair. The following illustration applies directly to a Smartsettle One+ negotiation but the same principles apply to Smartsettle Infinity.

Suppose that Party A and Party B make visible proposals of 47 and 62 respectively, having conceded from earlier more optimistic proposals. The also each make a secret acceptance (49 and 60 respectively) and end the session. In the next session, which one of the parties has declared as Final, the parties move their secret acceptances to 51 and 57 respectively. Final Session ends with no overlap and thus no deal as shown below.

Since the parties are each willing to accept an outcome between the last visible proposals they agree to intervention with Smartsettle’s END. The Expert Neutrals are shown a range of values that cover the two last accepted values and extends an equal distance beyond each of the last secretly accepted values to include the nearest visible proposal. In this case, the range of values shown to the Neutrals is as follows:

47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61

The Neutrals are not aware of what the secret acceptances or visible proposals are. All they know is that the range includes at least one of the visible proposals and that the secret acceptance range is centered on the total range. The Neutral is instructed to choose one of these values that is the closest to fair in her expert opinion. With a panel of three “fair” is the middle value of three. If the gap is very small (e.g., less than 10% of the total range), then Smartsettle itself will act as the Expert Neutral.

If the value chosen by the Neutral falls between the accepted values, the party who is closest to fair is favored by selecting the median between fair and their last accepted value.  Tie goes to whoever moved first and rounding is in favor of the party closest to fair. If the value identified by the Neutral falls outside the accepted values, then that value becomes the outcome.

In this case, suppose that the Neutral Panel identifies 55 as Fair.

In this example, Fair (55) falls between the accepted values. Since 55 is closer to 57 than 51 the final binding award is declared by Smartsettle to be 56.

Party A might suspect that Party B was favored in this case but s/he can’t tell for sure. Party B has no clue who was favoured.

Conclusion

Combined with Visual Blind Bidding, the Expert Neutral Deal-closer provides the best of both worlds. It encourages fair compromises early in the process, thus minimizing the actual need for intervention, and it does this all without identifying a clear loser.