Neither side wants to blink. What happens?
Strike talks, contract renewals, debt ceilings: the shape is always the same. Whoever holds firm while the other concedes wins big, and if neither concedes everybody takes a loss they would have paid a lot to avoid.
Legal Advanced Game Theory Pro engine
After you install, this is the model to open.
Deadline Standoff: Hold Firm or Concede?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
Where the standoff lands:
- Equilibria
- 2 one blinks
- Both hold
- −40 each
- Mixed play
- 40% hold firm
- Verdict
- Anti-coordination
There is no equilibrium where both sides hold firm, and two where one backs down, which means the outcome is settled by commitment and credibility rather than by the payoffs. The report also gives the mixed strategy: hold firm about 40% of the time. That is the rational description of a negotiator who cannot be read, and it is why deadlines get pushed to the last hour.
The model
A 2x2 payoff grid where the mutual-disaster cell is much worse than conceding.
| Both hold firm | You −40 · Them −40 |
| You hold, they concede | You 25 · Them −10 |
| You concede, they hold | You −10 · Them 25 |
| Both concede | You 5 · Them 5 |
| Equilibria | solved |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- Should you take the settlement or go to trial?Settle or Go to Trial?
- How much should we reserve for this lawsuit?What Could the Lawsuit Cost Us?
- What range can a lost profits opinion actually support?How Much Are the Lost Profits Worth?
- Whose cost to complete should you believe?Is the Cost to Complete Claim Credible?
- Did that delay actually push the finish date?
- Will your reserve cover a bad claims year?How Big Could the Claims Year Be?
Every model like this one, and the method behind them: Decision trees.