Preventing Spontaneous Collapse of Agreements

When two or more parties work out their differences, they often employ explicit agreements. Written or oral, signed or unsigned, agreements spell out what will be exchanged and when, or what the parties will refrain from doing. Agreements are essential to collaborative work in the context of constrained resources.

When agreements collapse spontaneously, there is no apparent external cause. Even when external conditions remain unchanged, agreements can implode. Distrust and rancor can follow, jeopardizing the possibility of future agreements. Because the long-term consequences of collapse can be more severe, unpleasant, and debilitating than the collapse itself, skill in crafting stable agreements is a valuable asset.

Here are some of the attributes of stable agreements.

They're voluntary

Stable agreements are voluntary. Neither party is coerced by the other, or by any other party. For example, the supervisor who addresses toxic conflict between subordinates by ordering them to "work it out or else" is establishing conditions for an unstable agreement.

If coercion drives the bargain, the agreement can remain stable only as long as the coercion remains effective.

Information quality is symmetric

Both parties have equal access to information about the context of the agreement and the value of the items exchanged. That is, one party estimates the fairness of the agreement about as accurately as the other. Information quality asymmetry is especially troublesome when the advantaged party knows that the disadvantaged party is agreeing to an unfair exchange, or when the advantaged party intentionally misleads the disadvantaged party.

When the truth finally becomes apparent, the disadvantaged party often feels harmed. Relationships degrade. The agreement collapses.

There are incentives for preserving the confidentiality of confidential terms

When agreements have If coercion drives the bargain,
the agreement can remain
stable only as long as the
coercion remains effectiveconfidential components, stability requires that there be incentives for maintaining that confidentiality. For example, when an agreement must remain confidential for delicate policy reasons, a trap awaits: the first party to disclose the agreement can sometimes shift responsibility for the need for delicacy onto the other party, even after harvesting value from the agreement.

When agreements are confidential, they must address the problem of incentives for first disclosure.

Value exchange is contemporaneous

Perhaps the most important stabilizer of agreements is simultaneity of exchange. If one party harvests value from the agreement before the other, or faster than the other, then the earlier harvester has an incentive to renege after having harvested enough value. Such an agreement becomes a form of "I'll scratch your back; you stab me in mine."

Working out contemporaneous exchanges can be difficult, sometimes requiring streams of small bits. Finding workable decompositions can require some cleverness.

Failure to find an agreement structure with these attributes after long negotiations can be painful. But living through an agreement collapse can be even more painful.  Top    Next Issue

Is every other day a tense, anxious, angry misery as you watch people around you, who couldn't even think their way through a game of Jacks, win at workplace politics and steal the credit and glory for just about everyone's best work including yours? Read 303 Secrets of Workplace Politics, filled with tips and techniques for succeeding in workplace politics. More info

Your comments are welcome

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

This article in its entirety was written by a human being. No machine intelligence was involved in any way.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Conflict Management:

Responding to Threats: II

When an exchange between individuals, or between an individual and a group, goes wrong, threats often are either the cause or part of the results. If we know how to deal with threats — and how to avoid and prevent them — we can help keep communications creative and constructive.

Dealing with Rapid-Fire Attacks

When a questioner repeatedly attacks someone within seconds of their starting to reply, complaining to management about a pattern of abuse can work — if management understands abuse, and if management wants deal with it. What if management is no help?

When Somebody Throws a Nutty

To "throw a nutty" — at work, that is — can include anything from extreme verbal over-reaction to violent physical abuse of others. When someone exhibits behavior at the milder end of this spectrum, what responses are appropriate?

Bullying by Proxy: II

Bullying by proxy occurs when A bullies B at the behest of C. Organizational control of bullying by proxy is difficult, in part, because C's contribution is covert. Policies that control overt bullying are less effective at controlling bullying by proxy.

Asking Burning Questions

When we suddenly realize that an important question needs answering, directly asking that question in a meeting might not be an effective way to focus the attention of the group. There are risks. Fortunately, there are also ways to manage those risks.

See also Conflict Management and Conflict Management for more related articles.

Forthcoming issues of Point Lookout

Coming May 14: Working with the Overconfident

A cognitive bias known as the Overconfidence Effect causes us to overestimate the reliability of our judgments. Decisions we make based on those judgments are therefore suspect. But there are steps we can take to make our confidence levels more realistic, and thus make our decisions more reliable. Available here and by RSS on May 14.

And on May 21: Mismanaging Project Managers

Most organizations hold project managers accountable for project performance. But they don't grant those project managers control of needed resources. Nor do they hold project sponsors or other senior managers accountable for the consequences of their actions when they interfere with project work. Here's a catalog of behaviors worth looking at. Available here and by RSS on May 21.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenDJpmhgyaDTwBQXkhner@ChacmGoYuzfZpOvDQdRkoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

• Get 2001-2 in Geese Don't Land on Twigs (PDF, )
• Get 2003-4 in Why Dogs Wag (PDF, )
• Get 2005-6 in Loopy Things We Do (PDF, )
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
• Get 2009-10 in The Questions Not Asked (PDF, )
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info