Win - Win - Win Model (papakonstantinidis Model)

WIN-WIN-WIN MODEL (PAPAKONSTANTINIDIS MODEL)

Local Development Approach/ Social Capital: THE “win-win-win model” (Papakonstantinidis Model) deals with local development, both as a math and social sciences field, as it combines GAMES THEORY

applied in the Local Development Field, by the BARGAIN +

SOCIAL TRUST conception. It has

to prove that building social capital at local level mainly depends on social

trust links among local people: Social cohesion based on social capital may be measured by the diversification Rate (R*) from strict globalization rules: From this point of view, local people intervention should be useful, so as to diversify these “rules” at local level adjusting them to local identity, including communication code, customs, ethics, culture. The Win-win-win methodology [Papakonstantinidis Model] should facilitate local people to “readjust” bargaining globalization rules locally, through a sensitization process: Community is defined as a discrete spatial/ cultural entity at its sensitization process’ limit.

WIN-WIN-WIN SCIENTIFIC CONTRIBUTION BARGAINING PROBLEM + SOCIAL TRUST + LOCAL DEVELOPMENT

The aim of this presentation is to prove that, (1) Social Capital as a concept

of

community behavior and natural resources management, defined as the “capital that refers to connections within and between social networks (emphasizing the social trust, in this paper)- something of a cure-all, for the problems of a modern society” (Portes, A., 1998) may be the base of a local development program. (2) Local Development may be concerned as a unique diversification / declination from the globalization rules (Papakonstantinidis, 2007) (3) The discrete entity’s “diversification rate” (R*) from globalization/ or bargaining rules, (Walras S, 1980) may be the crucial parameter which would define “Local Development” as a social cohesion result at local level. (4)Local Development is concerned as the limit-end of a unique and continuous sensitized development process , applied in a discrete spatial entity

(Papakonstantinidis, 2008/ May),

(5) Local Development is

achieved via GOOD CASES rather than “good practices”, due to the unique identity each region has, as well as its people with their own communication code, ethics, mentality, customs. (Katseli Luca 1979), (5) A win-win-win approach may be the appropriate methodological tool toward introducing “sensitization” in the development process. It may strengthen social cohesion process by improving its confidential indicators (so to trust each-other in interrelations process). In order to meet with paper requirements it is indispensable that the appropriate methodology be adopted, step by step : (1) A theoretical foundation is provided by recent literature (in points), connecting “Local Development” with Social Capital/ Social Cohesion, as well as with “The Bargaining Problem”- Games Theory & the Modern Innovation Theory (M.I.T) [Fischer M. M 2002, Kamitza R 1994, Moseley M. 2003, Petrella R 2001 ] (2) According to the afore-mentioned theoretical background, it is necessary to strictly define the “Bargaining Problem” (as the basis of Globalization “rules”) by its math /philosophical validation and try to define the “local development process” in terms of Globalization Rules

diversification (R*) from

(3) Next step is to create links between the “local

development process” (as a continuous sensitization process) and the bargain in terms of diversification rate from G. R, building “Social Trust Links- see at Swensen’ Social Confidence Indicators, 2006 (4) Finally, the Community is included in the model as the third or invisible part of each bargain between two persons, based on instant reflection, so each part wins ( the win-win-win model) Limitations are resulted, both by the Games Theory and the Modern Innovation Theory application in social sciences and their synthesis into a social market problem within the Community. 2. Recent literature – in points From the Local Development side, Kenneth Wilkinson (1991) focuses on the endogenous local development process / “bottom-up approach” (bargain, locally) 2nd, Friedman / Weaver – UCLA (1978) in their classic “Territory and Function” refer : “The base of an autonomous local development may be a discrete value system, an ideology, local people’s reaction to the dominant

local principles

(including local communication code, customs, culture), creating thus the “social cohesion environment” at local level. From the pure Sociological side, J. Coleman (1988) as “Social Capital” describes the cooperation processes of individuals, which minimize possible coming from individuals’, networks and common actions.

dilemma,

Besides, Glen Loury

(1977) used the term “social capital” to describe a dynamic theory of racial income differences’

discrimination (women, minorities, etc). J Coleman adopted

Glen Loury’s definition, in developing and popularizing the concept

Also, Putnam

(2000) describes social capital as the basis of social schemes creation (i. e networks) In conclusion, an increasing number of recent literature in the local development field, currently recognizes the existence of links among local development process, social trust & capital

A number of

Local Development approaches

toward this theme are referred below: “ The Political Entity” (Freedman-Weaver, UCLA, 1978, the “Selected Closed-Spatial Discrete Entity” of the Intra-Scientific Vienna Centre (Stohr & Todtling 1980), The “S. H. I. E. L. D Model”, Papakonstantinidis, 1997, Rome) The “Tre Italy” Model, Bagnasco, 1987, The “parallel system” and “The sensitized Community” (Papakonstantinidis, 1998 & 2002), The “political Democracy (LSE, Fotopoulos, 1998), the “Grass Roots” Model in Latin America (Luis Llambi, 2003) Barquero A-Vasquez A (1991)

These

theoretical approaches pre-existed to the suggested win-win-win 3. The Bargaining problem A two-person bargaining situation involves two individuals (Neuman & Morgenstern 1947), who have the opportunity, either to be competitors to eachother (win-lose)[von Neumann-Morgenstern, 1928/1947-“zero sum two players game” Theory] Filinis Kostas (1973), or to make coalitions, or even to create pure individual strategies, based on bargainers’ instant reflection behavior (win-win) [Nash J. F, 1950, Arrow K 1954, Aumann Robert, 1987, Crawford V, 1997, Kottarides K, 2002, Varoufakis Y, 1990) J.F. Nash ( 1950) focused on payoff shares/utilities combination: Bargain may result either in agreement or disagreement. (Kuhun H.W-Nassar S, 2001) Papakonstantinidis, 2003, 2005, Varoufakis Y, 1990) Utility expresses the constraint or the “fear factor” of disagreement for the negotiator who desires negotiations to be led in agreement more than the other one. Who needs more, negotiation leading to an agreement expects more utility, but –probably there is a loss in terms of “shares”, due to lack of risk. On the contrary, who is indifferent about “agreement” or expects less utility /per unit, has- to win in “shares” under the dogma “the more risk, the more profit” (Crawford V. 1997) It is necessary to analyze the Nash “non-cooperative- instant reflection game” /or a “win-win perception” as follow: Non-co-operative game, is a game between two (2) players/ individuals who have opposite interests (Aumann Robert , 1987) Each player makes his own choices, based on instant reflections’ rational movements and his physical cleverness The game/ bargain is defined by the result (pay-off) and not by players expectations- It presupposes best choices by both players towards meeting individual interests [“winning strategies”- Harsanyi John(1973]

Players/ or negotiators do not regret, a posteriori, from their own decision taken, based on personal choices, during the bargain. Each of the players knows a priori that the other negotiator (or player) is as clever as he is. During the bargain, a “mutual respect” between the two bargainers to each other’s best choices’ is necessary. It is recognized that “The more DETERMINED to break down the negotiation (= less utility), the more satisfied (=better shares) – the more risk, the more profit Social behavior is not recognized as an acceptable one in the bargain, thus deriving unfair results: That means, “who needs the agreement as the result of a bargain, has to loose in shares, by accepting any result”. Information may be the “link” between knowledge creation and the bargaining process. In particular, “Information” is a power factor in pure individuals winning strategies (Aumann Robert, 1987) The more information, the better winning strategy, the more profit. Each of the players / negotiators, starting negotiations with the other, expects to gain the maximum profit. Interaction, based on instant reflection individual winning strategies, is the base of the Nash Non Cooperative Games Theory A two (2) 2–person anticipation is based on utilities. According to Nash Theory, a unique solution exists that maximises the product of the participants’ utilities. There is, therefore an interaction between “utilities” and “strategies” In particular, “utility” expresses individual choices based on individual necessities “Strategies” express choices + will in personal level, taking into account the interaction factor (the other’s choices) Utility is the subjective and strategy is the objective factor of the same anticipation. Negotiation may lead either to “agreement” or disagreement Utility expresses the “fear factor” constraint of disagreement for those who desire the agreement, more than the other negotiators. (Aumann 1987) In conclusion, at any moment –according to the “N. C. G Theory”- there is only one “equilibrium point” at which any individual–at any moment- makes the best choices for himself, in relation with the other persons’ best choices. 3.1 The bargaining problem Utility Theory (math) Bargaining Problem is mainly based on “Utility Theory”- a mathematical theory of the Neo-classical School of Thought, able to satisfactory explain individual expectations/ anticipations, of a possible outcome. Usually it is expressed in the form of a mathematical function, f(u) = u1/2 Individual winning strategies are corresponding 1-1 to utilities U (A) and U (B) (Chun Youngub, 1990) Utility theory of the individual is mainly based on the “concept of anticipation”. In the “Two-person utility Theory” there are two (2) individuals in a bargain who have the opportunity to collaborate for mutual benefit in more than one way. In its simple/initial version, no action, taken by one of the two individuals without the consent of the other can affect the well-being of the other one, but in real terms there is only ONE decision, taken by the involved in a bargain individuals. • Utility in the bargain is a personal matter: Utility “units” are not compared.(Kuhun-Nassar, 2001) • Utility “units” express “fear units of a disagreement outcome”

• • •

•

•

If “A” needs more the “agreement” to be achieved, than the payoff coming from the bargain, then he should be ready to accept any result of agreement, even if it is not favorable for him (loss of shares) If “A” has decided not to accept an agreement during the bargaining process, then he risks more but –at the same time- has to win more from the agreement, in terms of shares. The “utility range” expresses the optimist and/or the pessimist instant reflection of each party. “Utility” expresses individual choices based on individual necessities and will. It is rather a subjective than objective factor, influencing individual behavior. On the other hand, “individual strategies” in the bargain –the objective factor- are defined by personal choices and “will”, resulting from the necessity to meet personal “needs”. From this point of view, “Utility” , as a subjective factor is expressed by “strategy” – an individual winning strategy- in the bargain, so as to meet “Utility”. There are “links” between “Utility” and “Strategy”: “Utility” is the ability to meet “needs” and “Strategy” is the plan – the individual plan- to achieve this ability, step by step “Utility” is the subjective factor and the “Individual Winning Strategy” is the objective factor of the same “thing”: Bargainers have needs (=utilities). In order to satisfy these “needs”, they use “individual winning strategies”, as the result of their “instant reflections” in the Bargain. (table 1) ð Lim U1i(&)U2i(&)=max U1iU2i (1) ià∞

3.2 Nash’ win-win random sharing/utilities- An example It expresses utilities/strategies, as the interaction between two negotiators and (2) expresses the utility function- as a shares/utility combination The bargaining problem decision making during negotiations of A & B -Nash highlighted the “payoffs” of the bargain, # personal expectations (Table 1): Table 1 BARGAIN Random Sharing between “A” and “B” Share A (%) 100 90 80 70 60 50 45

Share B (%) 0 10 20 30 40 50 55

Utility A

Utility B

Utility AXB

0 1 5 10 16 23 40

71 70 68 64 60 52 31

30 20 10 0

70 80 90 100

45 50 61 80

24 12 4 0

0 70 340 960 960 1196 1240 (max) 1080 600 244 0

3.3 The equilibrium point Suppose that “winning strategies” [ Pi, Qi] are in a fine ratio with the players’ (bargainers’) UTILITY ( linear function: corresponds 1-1 to bargainers’ Utility Function), under the dogma “the more decisive to break the contract down, the more satisfied from the bargain leading to the contract” (Kuhun-Nassar, 2001). That is true: Bargainers expectations are 1-1 to expected Utilities for each of them, coming from the bargain. (Bernheim & Douglas B. 1984). On the other hand, the more information, the more uncertainty. Bargain gets its own rules out of cooperation. People are competitive rather, than co-operative: Winning strategies are led by bargaining rules (rules of pure competition). Nash has described the “bargaining problem” not by expectations, but, directly, by the results (pay-off) of the bargain. In our example, the crucial point [the max] is 1240 (40x31) : this is the point of final agreement led by the bargain. On that point, shares are: 40% for “A” and 60% for “B”. On that point, personal satisfaction or utility units are 40 units for A and 31 units for B : That’s the point of agreement, expressing “fear of breaking down the agreement for “player” “A” and , at the same time, the risk for the “player” “B” of breaking down the agreement. In a 2-person anticipation, each of the two (2) bargainers may ask themselves one question, as the result of “good strategies” [instant reflection thinking] in the bargain: What should be the best for me, taking into account that the other person (bargainer in a negotiation) should try for the best for himself –thus recognizing that the other person may be as clever as I am?

4. Suggestion: The “win-win-win Model” 4.1 What the suggested win –win- win is According to the afore-mentioned analysis, paper contribution in the scientific thought (2008) should be summarized in introducing “the third “WIN” for the COMMUNITY (the third-part pole). According to my suggestion, COMMUNITY –the “C” factor must participate in any bargain by its “bargainers’ characteristics” (shares/utilities), thus adding the THIRD “WIN” at any two bargainers’ win-win expectation between TWO (the METRON analysis or the THREE POLES analysis like in other fields i.e philosophy, economy, creating an interactional flow By introducing the THIRD POLE in the bargain, then the crucial bargainers’ QUESTION must be changed in: What should be the best for me, taking into account that the other person (bargainer in a negotiation) should try for the best for himself –thus recognizing that the other person may be as clever as I am and, at the same time, taking into account that COMMUNITY, as the third or invisible part also participates by the “bargainers’ characteristics” (shares/utilities)

4.2 Win-win-win analysis methodology The following methodology is adopted in points (Papakonstantinidis) knowledge creation⇒ creating a “non conflict” behavior ⇒ inserting sensitization⇒ integrated information creation⇒ uncertainty due to negative entropy⇒ thus, smoothing potential conflicts⇒closing differences in the competitive bargain⇒payoff-utilities & shares, influencing behavior in the bargain /individual winning strategies influencing by a “new behavior” ⇒in the opposite, the more decisive, the more risk ,should derive more profit in a globalizing world but ⇒ inserting sensitization in the bargain⇒thus smoothing the conflict strategies taking into account the “C” factor ⇒ converting a bilateral “conflict” into a 3-part negotiation ⇒ leading to a “new” social perception , the win-win-win perception, including a real cooperation between negotiators, thus, carrying alongside a social market’s perspective- the “INTERMEDIATE POSITION”

4.3 Information/ behavior & the bargaining problem (Knowledge transfer, information, behavior) Paper conception is mainly based on Games Theory – especially on its “NonCooperative Games Theory’s version by J. F Nash, 1950- in relation with the Modern Innovation Theory” - (M. M. Fischer, 2000) M. I. T provides us with useful methodological tools as knowledge creation and knowledge transfer (Table 2) Table 2 Scheme: Knowledge Creation/ Information/ Types of Behavior

Type of Knowledge-1 tacit

Type of Knowledge-2 tacit

Synthesis Sympathetic

Resulted Behavior Socialization

tacit

codified

Conceptual

Externalization

codified

tacit

Procedural

Internalization

codified

codified

Systemic

Networking

sympathetic

systemic

Conceptual

Sensitization

systemic

systemic

Procedural

Strategic

Papakonstantinidis, 2003

Literature (Reinsmann, Fischer,2002 & others) introduced various processes of “knowledge conversion” based on the proven and “built” information systems incorporated in an organization. Possible cases among different types of knowledge produce the four (4) major processes of knowledge conversion : (1) Tacit knowledge to tacit knowledge produces sympathized knowledge (socialization) (2) Tacit knowledge to codified knowledge produces conceptual knowledge (externalization) (3) Codified knowledge to tacit knowledge produces procedural knowledge (internalization) (4) Codified knowledge to codified knowledge produces systemic knowledge (combination) Each of these processes of “knowledge conversion” corresponds [1-1] to a specific type of information (Papakonstantinidis 2003) i. e , • Social Information-Sensitization • External Information- Participation • Internal Information-Involvement • Combined Information-Networking 4-4 The suggested win-win-win approach According to the above analysis, paper contribution in the scientific thought (2007) should be summarized in introducing “the third WIN” or the third “person” in a two-party bargain, i. e the “C” “invisible part, which should be the “ Community interest” = “C” , thus taking part as “community” be present in every two-party bargain, claiming its own “share” from this Suppose that: • Ua = Pi, Ub = Ri , Uc = Qi , ....in a mathematical approach (tables 1, 2): • Ua = x , Ub = (100-x)k and f’ = [ x (100-x)k ]΄ = 0 , so that Ua + Ub = max THEN lim Pi(&) Qi(&) Ri(&) = max Pi Qi Ri = max Ua Ub Uc = Ua + Ub + Uc i→∞ or, how to transform a “competition” into the absolute cooperation, taking into account the integrated information, coming from knowledge transfer AND the sensitization process in the community, thus maximizing bargainers utilities and the Community utility (Uc) 4-5 The “Sharing problem” in a Bargain [Utilities, Shares, strategies, decision- choices, behaviour, Final Agreement] Having defined: (1) How information resulting from “knowledge creation /knowledge transfer” should contribute to what we call “social market” (2) How

sensitization should be introduced to given information, as to turn it to an integrated information (Papakonstantinidis, 2006) (3) How “integrated information” should influence human behaviour during the bargain, or negotiations (4) How a human “social” behaviour could lead to a “new” perception of thinking or taking a decision, in the bargain (see at Calvert Randall, 1995, Berger,J 2005 Cinneide M. O’ 1991, Coleman J 1988, Yitzak Samuel 1997, Bernheim Douglas B. 1984 (5) How socialization could influence human choices or winning strategies during the bargain, based on instant reflection (Nash) (6) How scientific thought could transfer the problem from “utilities” (personal perception”) to pay-offs (objective perception = counting size) Harsanyi John(1973), then, the data of Table 2 may be transformed in a new set of data, as Table 3. TABLE 3 (Papakonstantinidis Proposal) Suggesting Sharing between “A , “B” and “C” Share Α (%) 90 80 70 60 50

Share Β (%)

Utilit yA

Utilit yB

Utilit y AXB

4 13 22 31 40

1 2 5 10 16

71 70 68 64 60

41 32

50 60

23 31

23 70 40 14 80 50 (Papakonstantinidis Proposal)

Utilit yC

Utility AXBXC

71 140 340 640 960

Share C (%) 6 7 8 9 10

1 2 3 4 5

52 40

1196 1240

9 8

4 3

71 280 1020 2560 4800 max 4784 3720

24 12

960 600

7 6

2 1

1920 600

Notes, as to explain the symbols : • “C” expresses the Community (an acceptable system value at local level), as the “third” or invisible part in the bargain- In real terms, it reflects the “confidence indicators”, or, in other words, if and at which level each member of the Community trusts the other, during the bargain (H. Hans 1997) • The less shares for A+ B the more share for “ C” part

• • •

Utility is a personal matter: Utility units are not compared to each other. They express the fear of breaking down the agreement If “A” needs more the “agreement” than the payoff, then he should be ready to accept any form of agreement. Based on this concept ( the “C” factor) then, it is concluded that Sensitization process applied in local people has succeeded to change/ transform individual winning strategies into a NEW type of social trust behavior (Swensen, 2006), leading to SOCIAL COHESION, at local level (Papakonstantinidis, 2006, 2007, 2008) TABLE 4 Social Confidence Indicators (%) Country Indicator (%) 2007 1 Denmark 64.5 2 Norway 63.9 3 Sweden 62.3 4 Finland 56.4 5 Netherland 53.9

6 7 8 9 10 11 12 13 14 ..46

New Zeeland Canada Australia Indonesia Iceland North Ireland Suisse USA Japan GREECE Swensen, 2006),

52.6 47.0 46.9 46.7 45.3 43.9 42.1 42.1 42.0 23.7

This should be the “ground” for a Flag Theme local people creation (table, below) TABLE 5 FLAG THEME - Flow Chart

Local Abilitie s

Leadersh ip

Properties Priorities

Flag Theme

Active Participation Roles in planning/

Creating a team psychology among local

Jointing the endogenous forces on a common goal

PAPAKONSTANTINIDIS, 2007 Converging2000 individual strategies on a “common Papakonstantinidis, goal”, through cooperation

“Flag Theme” may be concerned as an innovative idea- an “open discussion theme” based on the sensitisation process at local level which concentrates local resources, skills, abilities, talents, leadership as well as “priorities” and properties at local level (Gannon Agnes, 1990, Wilkinson Kenneth, 1991) CONCLUSIONS/ PROPOSALS 1. Social Cohesion –necessary for the L-D process, thus building local people identity AND development (through the appropriate –for the place- flag theme - may be , at the same time, the cause and the result of building the Social Capital at Local Level 2. Building the Social Capital at Local Level, may be proved to be equivalent to “Social Confidence”, or “Social Trust” among local people (Llambi Louis 2008, Lados M,& Lachewski Lutz (2003) 3. At the same time, Community [ the “C” factor” ] “participates” as the THIRD or invisible part in any two-person negotiations

4. By introducing the “C” factor in any 2-person negotiation, then what should be result, could improve individual strategies and /or behavior in the bargain, from a pure “conflict” to round the corners of this conflict, then transforming competitors to “instant alliances” (including the Community profit) : This is the paper’s contribution) 5. Local Development is mainly based on this “new” perception 6. Based on this “perception” (round the conflict corners-the Community within) it’s easy for local people to find a “FLAG THEM” (2007- S Africa) for their L-D process: see at Flow Chart That is the win-win-win Methodology/ Papakonstantinidis Model) 7. According to win-win-win methodology, L-D process, in terms of diversification rate, from Globalization’s Rules may be justified, creating the Community as a discrete spatial Entity 8. Technological changes and human / social relations move in the opposite direction-“vice versa”. 9. Introducing a three-poles dealing system may improve the “bargaining perception” thus influencing social behavior, introducing a new bargaining perception/ethic 10. A “new bargaining perception” including the “Community profit” as the “third” or “invisible” parameter in a bargain between TWO persons-players may change some Globalization negative conditions, providing them with “rules”/ social rules through social behavior changing. 11. Reforming a bilateral contradiction in a 3-part bargain between two players (including the Community “C” as the “invisible” part between TWO, in fact may reverse the base of human negotiation : From “competition” to “cooperation” Reforming the “competition” to step towards “social cohesion” , the “objective perception of the world” may be changed into a more ideological: From material to a “thinking” world (Kamitza R 1994) The “C” partner my be proved to be the key-factor, against war feelings thus introducing the Greek philosophy’s “METRON” 12. Each of the THREE parts (A, B, & C) in any bargain, may ask itself THREE questions, thus maximizing its own profit (economic, social, cultural, environmental etc) : What should be the best for me, taking into account that the other person (bargainer in a negotiation) should try for the best for himself – thus recognizing that the other person as clever as I, AND taking into account [at the same time] that “Community” as the third or invisible part of negotiations between TWO, also participates and also tries under the same conditions [ “Community” as clever as the two bargainers] so bargainers AND the Community to be winners? - 3win Model

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