Durban Sa Final

8/14/2019 Durban Sa Final

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Prof Dr Leonidas A. Papakonstantinidis

Local Government Dept HEAD

d.DIRECTOR

of

School of Management and Economics- TEI-K

I.S.A World Conference

Durban- South Africa

2006

Clustering and Networking

SMEs

The Win-Win-Win Model

Case study:

Local Quality Contacts in Greece

Case: Lakonia


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ABSTRACT

The paper deals with the local networks and/ or European clusters (the SMEs

networking at local level and clustering at the European level). It focuses on

steps towards clustering and networking SMEs in the frame of a public

involvement procedure. SMEs capacity building and bargaining are key-factors of

clustering/ and/or networking at local, or European level, thus introducing a different

approach towards both the integrated sustainable development and the social

cohesion. A win-win-win methodological approach is necessary for networking &

clustering been succeeded. Based on instant SMEs reflection, win-win-win

approach provides us with the social perspective of negotiating under globalizationconditions. The Local Quality Agreements [case LAKONIA. N-E Peloponnesos]

paradigm may be a grass-roots perception, based on the win-win-win

methodological tool

Key-words: SMEs, clusters, networking, public involvement, capacity building,

win-win-win methodological approach, bargaining problem, games

theory, instant reflection, social behavior, winning individual

strategies.

BIOSKETCHProfessor Dr. Leonidas A. Papakonstantinidis, Local Government Department HEAD, Deputy

Director of School of Management and Economics- Technological Educational Institute,

Antikalamos, 24.100 Kalamata, Greece. [email protected]

Economist, Mathematician, Lawyer with an excellent (9.29) M.Sc in the field of Regional

Development (I.P.A), M.A (credits) in Rural Development (Center for Development Studies- U.C.G-

IRL . He has obtained his Ph.D in the Local Development scientific field.

Member of the E.U Commission task force for the L.E.A.D.E.R E.U Initiative (1989-1991), GeneralReporter of the European Center of Public Enterprises (C.E.E.P) s Regional Affairs Committee

(1985-1990), member of the E.U Commission (DG X) Green Team, Head of the Agricultural

Banks Local Development Office (1991-2001). 41 mono-graphies, 29 published papers inauthorised scientific magazines, 3000 articles , having visited and studied more than five thousand

(5.000) small rural communities all over E.U (Greece, Ireland, U.K, Sweden etc) for development

reasons. Rural Development visitor professor/tutor in e-learning Euracademy (Leonardo da VinciII E.U Program) Visby-Gotland University Sweden and also the Hungarian Academy of Sciences,Centre for Regional Studies(2003-2006). Member of the Editorial Board of the Journal of Applied

Economics and Management-India, Member of the International Sociological Association (I.S.A)-(Research Committee R.C 26), Member of the European Regionalist Association, member of the

Board of Agrotouristiki S.A (2001), member of the Board of Evrytania S.A (1996-2001) etc Eleven(11) times awarded at the international level for research work three times by the U.N North-

South Co-operation Program- in the field of local development.115 times awarded at national levelfor personal contribution in developing small rural and isolated areas in Greece. He has been

characterised as the father of Rural Tourism in Greece: -G.T.P/6.92, Vice President of GreekRegionalist. Ass- Rural tourism teaching work: Up-to-date e-learning training school Cyprus

2004-..training- research work at the Cork/Ireland University (Dept of Food Business UCC) andGrispiani-South Italy, member of E.R.S.A (European Regional Science Association).
mailto:[email protected]:[email protected]


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1. introduction

1.1 The concept of the paper

The concept of the paper is to produce the scientific dialogue on the thematic

SMEs networking & clustering at the European Level alongside a small place.

It seems like the integrated endogenous local development program, but in this

case is quite different: Capacity building is a key-factor which forms social

transformations, by doing networks, around an open discussion theme called

flag theme, thus influencing local development procedure. The frame is

defined by what we call the bargaining problem which provides us with the

strategic material of trends alongside the network & clusters , by forming newequilibrium points, new balances, or destroying the existing, doing step-by-step

new networks and clusters or transforming the existing ones. By its turn,

bargaining problem is depended on both instant reflections and pure individual

or SMES winning strategies based on information given in relation with

expectations. By its turn, information given may be the output of knowledge

creation, according to the New Innovation Theory,influencing social behaviour

and by this, individual strategies.

1.2 Capacity building: Factor of Networking SMES towards local development

Capacity building is the key-point in producing the dialogue, on local development

process, based on networking / clustering SMEs, for the reasons that:

1. capacity building is about stimulating learning (Moseley, 2003)

2. learning by doing-but not in isolation- is often extremely effective

3. the challenge for capacity builder is to create situations in which

learning occurs as a by-product of someone responding to a challenge

4. creating /operating clusters among SMEs & organizations

From this point of view, development especially rural and local development-

might be a sustained and sustainable process of economic, social, cultural and

environmental change, designed to enhance the long term well-being of the whole by

networking (Wilkinson, 1991, Swarebrooke, 1999, Papakonstantinidis, 2002,Moseley, 2003).


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Among different definitions on capacities building, the paper starts this dialogue

from the definitions of capacity building provided by professor Moseley (2003):

a) Increasing the stock of skills, knowledge and readiness to act.

b) Promoting the development of social capital (institutions and networks etc.)

in order to produce positive social outcomes.

c) Networking SMES around a FLAG THEME in the small place, orclustering SMEs at the European Level

Flow-Diagram 2

The Flag Theme

Flag Theme is a central theme which concentrates local resources, skills,

abilities, talents, leadership (which is a talent), as well as priorities and propertiesat local level and, in its turn, operating as an incentive, mobilises local people to

actively participate in planning and implementing the integrated endogenous, local

business plan, as well as to create a team psychology among people and joint local

population forces under the umbrella of the flag theme. It is the core of

networking & clustering SMEs at local & the European level

Local Leaders Properties

Priorities

Flag Theme

Active

ParticipationRoles in

planning/

im lementin

Creating a team

psychologyamong local

people

Jointing the

endogenous

forces on acommon goal

Converging individual strategies on a common

goal, through cooperation


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Fluent literature on SMEs operation provides us with four (4) definitions, ie

readiness to act, capacity building, networking and clustering As it concerns the first definition, Readiness to act relates to a host of

other things to do with motivation confidence, resources, the removal of

constraints etc

The second definition includes reference to the purposeof capacity buildingand it also states unambiguously that capacity building is about increasing one

of the four capitals (the social capital) whereas it is arguable that it is also

concerned with enhancing human capital, i.e individual people and not just the

glue that binds them.

The third definition, ie networking may lead to coalitions around a flag

theme, thus promoting the integrated and endogenous development, at local

level

The fourth definition i.e clustering may lead to a development tool

for promoting common and complex integrated development approaches on

subjects or fields of a common interest, among the participants in clusters


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1.2.1. SMEs involvement: First steps towards networking and clustering

Based on these definitions may be expressed the major question:

How can we involve SMEs to implement community objectives?

In my mind, scientific community should take into consideration two approaches to

answer this question:

How does SMEs take part of capacity building in local society?

How SMEs should be promoted to increase their own capacity by

networking or clustering ?

1. The first direction leads us the implementation of community objectives

by public-private partnership.

2. The second direction increases the competitiveness of local SMEs and thismay ensure the better off of local community.

Both directions must be concerned by a society involvement perception,

including FIVE(5) methodological steps [according to the ladder]:

Information

Sensitization

Participation

Direct involvement

Partnership

In particular:

1. A first step is information by which people and SMEs at local level

are told about what is possible to be done, in terms of complementary

activities, locally and what it might to do for their area

2. The next step may be sensitization, by which SMEs are encouraged to

reflect on the character of their area; the natural, cultural and human

resources of the area

3. This may, then lead to active participation in the debate upon the

development of SMEs area, around a Flag Theme, or common

interests, by a more social character , thus making their first steps

towards coalitions, by creating a common strategy in some fields.

Flag Theme should to be an innovative idea, coming from the

studying of nature, or from an historical fact reproducing a custom,

a myth, an historical name or event. It may be, even a fantastic event,

which may be attractive for touristsFlag Theme may be resulted as the


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outcome of the common work during the sensitisation and theanimation process. Some examples from Greece/Europe are referred

below: Odyssea -Aegean Sea Arktouros (Pindos Mountain) ),

Forest of Dadia (Evros), Zagorohoria (Epiros), Flag of Greek

Revolution Kalavryta, Twelve Gods in Olympos (Pieria), Faragi

Samarias (Crete), Pindos Crossing etc or using names from historyi.e Apidotia (Nafpaktos), ; thematic routes i.e Oil Roads, or

Silk-town (Soufli); or even a fantastic place , as the Pirot Sea for

people who asking for adventures, or the love valley to attract

people in love , etc. In those cases, local activities are round the Flag

theme for each place, thus providing it with its identity; through

diversification, as a most popular tourist destinations.

4. This, in turn may provoke the direct involvement of people and SMEs

at local level in pursuing and contributing to their common fields

5. This direct involvement may then form the basis for the creation of

formal or informal local partnerships which may undertake aspects ofthe development the SMEs common strategies around the flag theme.

That could be led to SMEs networking around the flag theme

Conflict resolution which could occur between SMEs should be

arranged by the new methodological tool, suggested by the

presenter: It is the well-known win-win-win model

Papakonstantinidis LA - (paragraphs 7( model) & 4( its math prove)

6. Clustering leads also SMEs to new forms of co-operation in the

European area, by doing new synergies or clusters around a flag

theme at the European Level: Thematic routes, like the Olive Oil

Route, the Wine Route [according to the well known Silk route ]are some of the successful European examples. These examples are

concerned around a central theme, or idea, with links among

places/organizations/agencies/ local and public authorities which have

common interests [i.e olive-oil producer European areas, etc] One of

main clusters objectives are the local quality agreements/contacts

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2. literature connecting to SMEs

2.1 Analysis: Literature connecting to the subject (networking and clustering)

Literature connecting to the subject ofSMEsclustering andnetworking, thus

influencing the community development process, as well as building capacities in

context with SMEs involvement the development process, suggests the analysis of

the three main schools of though i.e

the School of Central Europe

the English-Saxon School

the Mediterranean and African Schools of Thought ,

adding a specific note for clusters

In particular:

A. The Central Europe School of Thought

Capacity Building by Non-financial support of SMEs. [Istvn Kerepeszki , Lados M-

Hungarian Academy of Sciences, Lelovics A, - Slovakian Forum Institute and al]The keyword of Central Europes School of Thought issynergy(Istvn Kerepeszki

2003, Lados,2003) This School describes the advantages and the role of SMEs in

the development of local economy. Flexible SMEs are the engine of local economic

development by creating employment. However, most SMEs work alone, using

double efforts. Co-operations and synergies make more efficient the (local) economy.

B. The English-Saxon School of Thought

Micro businesses Networks and Rural Development Agencies.

[ Lutz Lachewski, Germany (2003); Barlett Debbie, U.K, 2002; Berg Astrid,

Denmark (2000) ; Dower Michael U.K (2002), Yitzak S, 1997 U.S and al]

Micro businesses are in this School of Thought focus. It defines micro business as

household or family business with less than 10 employees. The keyword of its

concept is entrepreneurship. This School explains both the positive andnegative description of entrepreneurship (of micro businesses). In the negative sense,


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they cannot survive. In the positive sense, they are excellent and they can generate

employment. The classic representatives of this School (Lachewiski,Yitzak) argue

for positive government actions regarding the positive approach to entrepreneurship.

C. The Mediterranean School of Thought:

Building the Social Capital and Local Capacities in Rural Areas: the AnimationProcess [Papakonstantinidis (Ellas) ; Toraman (Turkey); Lambrou (Cyprus); Raul

Abeledo- Imedes(Spain),Giuseppe Abbati (Italy), Ian Micallef (Malta), Hassan el

Cherkaoui (Morocco), Midani T.(Tunisia) and al- see at minutes- TheMediterranean-Ellas World Conference, TEDKNA, 2003]

This School has really an integrated approach regarding the topic Building

Capacity and the SMEs as it utilises both directions to SMEs involvement in local

capacity building. It focuses on poor rural areas, the most targeted area of ruraldevelopment. The concept has built up guidance for an integrated local development

on the basis of endogenous resources, in context with local people intrinsicinclinations

Mediterranean School of Thought discusses on four crucial elements of rural (local)

development ie, :bottom-up approach, the hidden talent, creating a team psychology

AND the need for a flag theme.

D. SMEs and co-operative networks AND clusters

A Flag Theme for example a local action (i.e rural tourism) with its many smallenterprises and the need to link together the many different services, offer a

natural ground through business networks, or clusters Typical examples of

such networks & clusters in GREECE are offered by various routes or

trails [ the wine route the art route the oil route] promoting both local

production and local cultural heritage trail bring together all those who would

benefit from the spending of consumers those products (or visitors, along the

route the trail etc). Especially:

2.2 Customization: Clusters

Clusters may be seen as a development tool for promoting complex integrateddevelopment approaches on subjects or fields of a common interest, among the

participants in these clusters [ Greek Ministry of Employment, 2004- Annual ReportEqual E.U Initiative Application in Greece]Public and Private employment organizations, local government organizations,

training organizations, local enterprises, supporting agencies, Local Action Groups

and SMEs may participant in these clusters .

All these organizations or development agencies are motivated around a flag

theme [ see at the tosipo cluster in our case study Lakonia ]

Fields of cooperation may be:

1. Defining a common clusters development strategy followed by the partners, as

to realize the project: Project according the clusters methodology- should bea global innovative approach, as to represent all the participants in a cluster


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2. Promoting a common interstate agreement

3. Promoting the good practices among the partners

4. Mainstreaming these good practices in day-activities

5. Promoting the social mainstreaming between the members

The main axes of a development cluster should be: Representativity in participation

Transparency in Management

Democracy in Decision Making

Flexibility in Project Standards Application

Cluster should take a Geographical or Sectorial form, due to its intervention fields.

Intervention fields may concern to specific problems at local level, such as economic,

social, industrial, living standards etc

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3. knowledge creation

3.1 Innovation and knowledge-creating, as an Interactive Process- Information

A system of innovation is a set of actors or entities such as firms, otherorganizations and institutions that interact in the generation use and diffusion of new

and economically useful- knowledge in the production process (Fischer M.M,

2002) There is no general agreement about the specification of the sets of actors and

specifications

Following the above mentioned, let us see , now, the innovation as an interactive

process:

Research is interacted with the general scientific and technological knowledge

pool, based on the logic of the firm-specific knowledge.

This knowledge pool is interacted with a number of firm-specific knowledge base

interactive systems, i.e potential market, invent and analytic design, redesign and

produce, distribute and market (Fischer M.M, 2001)

From the other hand, knowledge is the most strategic resource and knowledgecreation becomes the key for firms to stay abreast of product and process innovation.

At this point, it is necessary to introduce the term of the organizationalknowledge as a complex interactive process characterized by a continuous anddynamic interaction between two forms of knowledge: tacit and codified. From

this point of view, knowledge conversion through information channels- are

both valuable, for innovation diffusion and human relation progress(Papakonstantinidis L. A, 2003)Literature (Reinsmann , Fischer, Nonaka, Takeuchi and others) introduced various

processes ofknowledge conversion based on the proved and build informationsystems incorporated in an organization (see bellow, 2.2.3).


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Possible cases/orders, between tacit and codified knowledge produce the four

(4) major processes of knowledge conversion :

Tacit knowledge to tacit knowledge produces the sympathized knowledge(socialization)

Tacit knowledge to codified knowledge produces the conceptual knowledge

(externalization) Codified knowledge to tacit knowledge produces the procedural knowledge

(internalization)

Codified knowledge to codified knowledge produces the systemic knowledge

(combination)

Each of these processes of knowledge conversion corresponds [1-1] to a specific

type ofinformation (as a form of human energy) (Papakonstantinidis L. A, 2003), i.e

Social Information-Sensitization

External Information- Participation

Internal Information-Involvement

Combined Information-Networking

-

[]

-

/ /


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, -


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.

, :

(Socialization)

(Participation)

(Public Involvement) -- (coalitions/ networks/clusters)

( -)

,

, () :

3.2 Socioeconomic Relations, as an Interactive Process: Bargaining Problem

By its turn, each of the specific types ofinformation- corresponded 1-1 to knowledgeconversion processes- may lead individuals in four different types (1-1) of human(social and economic) behavior, according to direction and communication:

Socialization

Participation

Public Involvement

Creating coalitions, or networks

Particularly, information as the tool of knowledge conversion process influences the

economic behavior of individuals leading them in planning their own pureindividual strategies, in the bargain. Following the literature (Kuhn W.H

Nasar S,2001) the n-persons games should have values .A two-person

anticipation should be defined as a combination of two one person

anticipations The one-person utility functions may be regarded as

applicable to the two persons anticipations, each giving the result it would

give if applied to the corresponding one-person anticipation which is a

component of the two- person anticipation. A probability combination of

two two-person anticipations is defined by making the corresponding

combinations for their components. Instead of define a solution directly,

Nash asked what reasonable conditions any division of gains from a

bargain would then to satisfy. He then using, under conditions, aningenious mathematical argument [An n-person game is a set of n

players or positions each with an associate finite set of pure strategies and

corresponding to each player i a payoff function pi which maps the set of

all n-tuples of pure strategies into the real numbers (Nash J.F, 1951) ]

showed that, a unique solution exists that maximizes the product of the

participants utilities .

3.3 Modern Innovation Theory: Knowledge creation & the BARGAIN


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There is a relation between bargaining problem, information output and knowledge

creation: The more information, the more uncertainty even if it is impossible,

according to the common sense, due to multiple choice probability : There is link

between entropy and information given, illustrated in schemes 1 & 2 of the index.

By its turn, the more information given, the more power in the bargain , but the more

integrated (sensitization included) information, the less power , due to sentimentalor ethic reasons/customs, maybe GOD - So, there is a link between knowledge,

information, negotiations winning strategies AND instant reflections AND

networking: Networking is based on bargaining conditions. Bargaining conditions are

formed by human behaviour influencing individual strategies. We suggest that the

system should be improved, if and only if- community could be taken into

consideration in each of negotiations between two persons, apart from legal or

obligatory forms!!

Lets see the links:

3.4 Knowledge-creation, Technological change: New trends in Regional Policy

Regional Science is a rich discipline at the cross-roads of economics and geography

that deals with :

urban and regional economics problems

transportation and spatial interaction problems

natural resources problems

The progress made in these three major fields could be summarized in :

spatial analysis

regional economic modeling, in particular, spatial interaction modeling and

regional development and policy analysis

Research on Regional Development and Regional Development Policy has been

developed by two major Schools of thought that have participated in the debate on

innovation, knowledge/information and regional development (Fischer M.M, 2001) :

those, which concentrate on institutions and industrial organizations and

those concerned with technological change and learning

The first one has been already surpassed by the evolution and the technological

change: Industrial organizations theory had been a useful methodological tool in

explaining the development procedure, during the industrial period and the

industrialization / urbanization procedure (Poles Theory, Stages of Growth, Balanced

and Unbalanced Development etc)

It is estimated, that during the post-industrial period, research on regional

development, should be better expressed by the second School of Thought

concerned with technological change and learning, introduced by the Modern

Innovation Theory, in terms of:

Knowledge creation and dissemination at the very center of focus .

This Modern Innovation Theory emphasizes (as the above referred) the

interactive and dynamic nature of innovation (Fischer M.M, 2002)

Innovation is viewed as an institutional and localized not placeless-

social process (Fischer M.M, 2002)


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Following the previous approaches, based on literature, it is concluded

that considerable advance over the network school of innovation has been

made by a decisive shift in focus from firm to territory , from knowledge creating firm to knowledge- creating territory, (on which the win-win-win

suggested approach has mainly been based).

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4. information

4.1 Information as a Mathematical mean

Information taken by a data is directly related with its probability , this data to be

happened Thus, the measure of information may be accounted by the [1-1]probability to be happened Lets see the scheme- below:

4.1.2 Data Self-information or information material [I(A)]:

Self-Information is a function, an identity wane function I(A); []it is decreased, as

its own probability increases] Information, under its own probability to be assured

[= 1]

Self-Informa tion of data A

: the data

p(A) p : the probability of data

() : self-information of data

Note:

PROBABILITY

Defined Event

Probability =1

INFORMATION

Zero Information

Important InformationUndefined event

probability=0


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Source ),( A , when },,,{ 21 naaaA = is the alphabet of the resource and][ 21 nppp =

ENTROPY of the resource is the average of the self-information, for all the

symbols , i.e

)()()()( 2211 nn aIpaIpaIpAH +++= bit/ symbol

then:

n

np

pp

pp

pAH1

log1

log1

log)( 22

22

1

21 +++= bit/ symbol

4.2.2 Qualifications of the Entropy

0)( AH

=== ),,,,,(),,,(),,,( 43121221 nnn aaaaaHaaaHaaaH

MAX [Entropy]: If all the symbols have equal probability to be achieved

nppp n

121 ====

Then,n

np

pp

pp

pAH1

log1

log1

log)( 22

22

1

1 +++=

nn

nn

nn

nn

n2222 loglog

1log

1log

1=+++=

finally,

nAH 2log)( = bits/ symbols


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Proposal- Contribution in scientific dialogue

1. Converting the bargain from bilateral to a 3-part negotiations including

the Community as the third or invisible part of the bargain-[scheme 1]

Scheme 1

A

C


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7.3 The Bargaining Problem and SMEs Networks and clusters

There is a link between bargaining problem and Networking/clustering SMEs: In real terms, any human activity goes on by the bargain (games theory).

Particularly this occurs in networking: As SMEs go to react at new technologies,

then it is rather impossible , SMES to incorporate bargaining elements , more andmore : SMEs have to gain power each-other in terms of information given , thus

encouraging / enforcing links among all the SMEs participating in thenetwork/cluster: there is the complementary factor between SMEs, organizations,

local agencies activating around a common flag theme or thematic unit (i.e

thematic routes ,thematic paths, ecological parks etc) In this frame, links between

organizations are used to transform the information-uncertainty to the integratedinformation, both , sensitization and animation included, in order to face theincreasing market competition. From this point of view, the necessity of a common

development strategy should be given.

7.4 Bargaining problem and the win-win-win Model- (Papakonstantinidis)

Nash game has been defined a priori, by strict rules of an end, as a

competitive game based on players instant reaction (individual strategies,

formulated through given information) Following the same idea, a competitive

game should be concerned as a team win-win-win strategies based on instant

players reaction, after the given integrated information, let them create the BEST

codified knowledge

According to the suggested model, in any negotiation each of bargainers must ask

himself a triple question:

What should be the best for me, taking into account that the other person (bargainerin 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] thatCommunity 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 Community to be winners (or win-win-win) ?See at tables 1& 2 the sharing problem and utilities paradigm

[The win-win-win perception]

the win-win-win model

final presentation


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A/ The information factor

The more Information, the more uncertainty for the Future the moreneed for cooperation !!!

B/ The modeling factor

Suppose that:

Pi(&) :Sum of all the winning strategies(&)[pick-points]

coming from the choices of the bargainer A, based

on information given while reaching the Qi(&):

Sum of all the winning strategies(&)[pick-points]coming from the choices of the bargainer B, basedon information given while reaching the

Ri(&):Sum of all the winning strategies(&)[pick-points]coming from the choices of the bargainer C, [ theCommunity , concerned as the third or

PROBABILITY

Defined Event

probability=1

INFORMATION

Zero Information

Important InformationUndefined event

probability=0


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invisible partner] based on information givenwhile reaching the

Max PQR = max of payoffs PQRTHEN:

limPi(&)Qi(&)Ri(&)=maxPQRi

8. proposals and suggestions

8. Proposals1. Networking the SMES at local level, is a form of bargaining under the prism

of sensitized integrated information coming from knowledge creation2. A 3-person non cooperative bargaining game in its limit may be a form of

COOPERATION among the involved parts, in its super-dynamic version, as

integrated information let them create a 3-band codified knowledge, at the

same time i.e

3. Rural community is the weak partner in the bargaining game, in the world

market. BUT, this situation should be conversed , under the networking

local SMES, in terms of the collective choice.

4. Our proposal for networking the SMES is the suggested for the first time in

Gotland/Sweden- Win-Win-Win Model(Papakonstantinidis, 2002)

according to which:

At any negotiation, each of the involved part has to ask him/her self,

what should be the best for me, taking into account, that the other part must

ask him/herself the same question (see at the respect to other part rational

reflection-point-according to point 3, above) AND at the same time taking into

account that the THIRD-INVISIBLE part in a bargain the common

interest-the community- should ask itself the exact same question????

thus, introducing the sensitization process, as the integrated information!!

1. Sensitization may be concerned as a form of transferred knowledge, or a

kind of information flow. It lets people transform their own tacit knowledge to

codified knowledge thus to complete their own socialization process, at local

level. Each of them has to incorporate see at the Mainstreaming Principle- that

individual winning strategies may lead to Community profit, at any moment.

This profit may be environmental protection, social cohesion, community

identity, cultural identity, mutual supporting, solidarity;

2. Thus, Sensitization in the form of knowledge creation and knowledge transfer-

may be proved to be a useful planning tool, in the most of rural areas

Papakonstantinidis, 2002);


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3. The above mentioned tool provides local people with a team psychology

between community members, followed by mutual respect, cultural identity,

social cohesion and solidarity;

4. The new system (the equilibrium point, according to Nash Theory) could be

led to a pure cooperation situation, between the involved members in the

bargain (individualsand the Community which could be seen as the third-invisible part of the two-persons bargain) ; this could occur as the result ofaninstant individual reactiondue to given information (transferred knowledge).

5. From the other hand, an a priori cooperation between negotiators under a legalform, may be no realistic, in the frame of the new economy A form of a non-

cooperative operation, should rather be concerned as a more realistic version,

under the condition of a non-formal agreement, locally.

6. Pure cooperation must be the edge or limit as the outcome of a non-cooperative

game between involved parts, including the community as the trird or

invisible partner of the negotiation7. Sensitized people, having accepted and adopted a 3-person integrated

information, have more possibilities to lead rural development process to theonly ONE winning sustainable development strategy, by converging individual

pure strategies of a non-cooperative game (bargaining), to a common

development objective. In this frame, converging the individual winning strategies

may lead in its limit- to the absolute cooperation, locally

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CASE STUDY : the Local Quality Agreement paradigm

8.1 PARNON Area Profile & Problems

Parnon mountain (Lakonia place) is a wonderful mountain and forestry area in

North-East Greece, with a wonderful lake in the center , in 1600 meters high.

This place was one of less developed rural and isolated areas, in my country,

before the LEADER II E. U Initiative (Program) application in Greece (1997),

experienced by depopulation, low income per capita, low production, low labor

specification, low information flow

Mayor and Local Government Organizations had no opportunity to improve

their services offered, due to bureaucracy reasons and lack of information/and /or

finance Local people in Parnon Mountain area were disappointed with local

organizations quality services offered. Younger people were ready to leave.

PARNON S.A the Local Government Organization in Parnon Mountain Area ,

was unable to help or to maintain people in their place (home), before the

LEADER II E.U Program (1997) State intervention in local places was limited

by a strict bureaucracy .


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PARNON S.A , the Local Organization should have a social profit, if it was

able to combine technological changes coming up from applying a win-win-win

philosophy, with those of networking local SMEs around the Flag theme. and

promoting local production through clustering them in the European level ,

with other SMEs , from all the European places , having the same characteristics.

(olive-oil and wine producer places) PARNON S.A created then the Local Quality Production Agreement

promoting it to the European Area (among the 25 E. U members-states ): It was a

gentlemen agreement concerned the quality of local production.

Creating the site TOSIPO.GR, PARNON S.A has promoted links with

other olive-oil and wine producers mountain European places

8.2 Case TO. SI. PO :

PARNON S.A: LAKONIAS.Peloponnesos (www.tosipo.gr)

8.2.1 Introduction: TO.SI. PO Profile

TO. SI. PO [ from the initial letters of the Greek words Topiko Symphono

Poiotitas that means Local Quality Agreement] created by the Local Action

Group of LAKONIA (S-E Peloponnesos) PARNON S.A, as the leader of the

project, includes all clusters rules described in the paragraph 1.1.2 of this

scientific work.

Especially:1. TO. SI. PO is a typical case ofdevelopment cluster including twenty six

(26) partners & members etc around a flag theme which is the thematic

route OLIVE-OIL ROUTE (points 1 & 2 : paragraph 1.1.2).2. During the 2000-2005 period (The Equal E.U Initiative 2nd period) TO. SI. PO

has specified in consulting its organizations-members and the depended from

these organizations SMEs , on how to promote their olive-oil production in the

international market

3. This cluster has been approved and participated in the Equal 2000-2005 E.UInitiative, on gender employment equality

4. Following the 2000-2005 Project, TO. SI. PO Cluster realized activities as

for example: Promotional Materials Edition

Quality Map Edition (mapping all the olive-oil producer areas, participated inthis Cluster

Creating a promoting CD-ROM Material

Creating production distribution and selling networks in East Europe, E.UCountries and the U.S. A

Participating in other interstate networks focused on oil-olive production

promoting

Transferring know-how on olive-oil standardization into organizations, SMEsand local agencies, participated in the cluster
http://www.tosipo.gr/http://www.tosipo.gr/http://www.tosipo.gr/


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Promoting the olive-oil consumption though campaign on olive-oil therapyqualifications

8.2.2 TO.SI. PO Cluster as a typical win-win-win case

TO. SI. PO may be seen as a successful European case in the frame of the Equal

E.U Initiative- 2000-2005

The key-point for its success should be its methodology, followed by (and

competitive) the PARNON S.A the Leader of the TO SI. PO Cluster

Methodological steps are divided in two categories: those of creating the Cluster

and those of maintaining the Cluster alive in the World and the European (and

competitive) olive-oil Market

Creating a cluster presupposes the win-win-win process, i.e gathering

separate information [ the uncertainty factor], combining tacit knowledgewith the codified knowledge (the knowledge creation factor, according to the

new innovation theory- chapter 3 ) and then introducing the sensitization

factor in the separate information thus transforming the information system

into a new form of integrated information system. Introducing the new

information system (enriched by the sensitization factor) , in the organizations

decision making, (winning strategies, as well as in individual winning

behavioral strategies) then a new bargaining approach may be achievable. In a

new bargaining environment, smoothing conflicts/and/or the competitivetrends in the bargain should be achievable, through a new bargaining behavior

(the win-win-win-behavior, according to the above analysis) : PARNON S.A ,

the leader of the TO. SI. PO Cluster has based its approach on win-win-winmethodological steps, in order to convince local people, organizations, local

agencies and public authorities to co-operate instead of each acting alone in a

competitive environment.

Win-Win-Win Methodological tool has been applied by the cluster leader

PARNON S.A , so to create links between its partners and organizations-

members , as well as between PARNON S.A and the SMEs depended on these

organizations and local agencies.

Methodological [ win-win-win]steps, followed by the leader PARNON S.A are

referred below:

1. Specifying the subject, looking for common interest problems [ low

competitiveness in a global olive-oil market, low income per capita at local level poor areas, decreasing local SMEs evolution, increasing depopulation, old

population , local quality problems etc ]

2. Defining individual problems, at local level.

3. Creating knowledge by combining tacit with the codified knowledge and

know-how at local level

4. Gathering information from all the olive-oil producer N. E Peloponessos areas

5. Enriching the information gathered by sensitization-creating an animation

mechanism, by the younger people at each of future partners and areas6. Animating local people to cooperate around a common flag theme i.e

promoting the olive-oil production through interstate agreements


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7. Creating links among future partners, by both the combined knowledge and the

sensitization process [ integrated information] thus influencing the bargaining

behavior (smooth negotiations, instead of competitive perception)8. Introducing sensitization in the bargain , thus influencing the % individual

shares (or reducing individual profits, due to a common goal- facing the problem

by instant non-cooperative- reflection)9. Establishing a new bargaining ethic , something like the English common

low [ no written rules]

10. Taking part in this new bargain : Each of these partners trusts the other.

Thats the solution , or the suggested win-win-win social market in real

terms, in a real example

11. By the same way, maintaining the TO. SI. PO Cluster is depended on trust base

12. Now, local results (economic, social, psychological etc) for this area, through

interstate agreements (with Italy, Spain, France, Germany Belgium, U.S.A, East

Europe etc) underline the success of this cluster experiment

S

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Prof. Dr. Leonidas A. Papakonstantinidis

Local Government Department HEAD

d. Director of School of Management & Economics- TEI-K

05.11.05

APPENDIX

Mathematical prove

According to introducing the third or invisible part in a negotiation among TWO, we have to

transfer a TWO-poles world system to a its new 9suggested) form of a THREE-POLES NEW

SYSTEM, by break down the competitive two poles perception !!!

It is a NEW methodological tool in the bargaining game, taking into account the THIRD or

INVISIBLE PART of the bargain between TWO persons, who have opposite interests, suggesting

that:

At any bargain between TWO, each of bargainers tries to concentrate the more

information he could, thus to prevail in the bargain. Each of the TWO respects, the other person to beas clever as he is and plans and follows the best winning strategies as he plans for himself, thus

introducing competitive relations, in each human activities, even the more humanBut, that leads to a human jungle, without human feelings, without respect to human

civilization, thus leading us to the edge:By introducing [ in our win-win-win model- the third or invisible part in a bargain, we succeed

to smooth conflicts , as each of the TWO bargainers , NOW, has to ask himself THREE (instead oftwo) QUESTIONS,

before any choice or action, based on information given:


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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 taking[at the same time] into account that Community- as the third or invisible part ofnegotiations between TWO also participates and also tries under the same conditions [ Community

is as clever as the two bargainers] so bargainers AND Community to be winners (or win-win-win)?See at tables 1& 2 the sharing problem and utilities paradigm

[The win-win-win perception]

S

5. questions on market behavior & the bargain

Swin-win-win behavior vs Games Theory

in a new social market

5.1 First conclusions-proposal and MATH contribution

Socio-economic Behavior & Games Theory & Bargaining Problemlead

to the suggested

Non-Co-operative Games Nash s Extension

Proposal- Contribution:

Lim Pi (&) Qi (&) Ri (&) = max Pi Qi Ri

i

or :

How to transform competition to a new form of

absolute cooperation

5.2 Suggestions justification

5.2.1 Review in the Games Theory and the Non Cooperative Games Theory

Bargaining is an old problem in socioeconomic theory based on Utility Theory A two-person

bargaining situation involves two individuals who have the opportunity, either to be competitors each-

other (win-lose) [ see games theory, below], or to collaborate for mutual benefit in more than one

way. In the simple case, no action taken by one of the individuals without the consent of the other can

affect the well-being of the other one. In fact we there is only one decision Economists (particularly,

von Neuman and Morgentern, 1947) assumed that the outcome of a two-way bargaining was

determined by psychology and was therefore outside the realm of economics [zero-sum, two players

game. Each participant in a negotiation had expected according to the bargain theory, before 1951- to

benefit more by cooperation, than acting alone Equally, according that dogma, the terms of deal had

depended on the bargaining power of each. No one had discovered principles, by which to winnow

unique predictions from a large number of potential outcomes, under the dogma contract without

competition is indeterminateBargaining process has been promoted by the Non Cooperative Games Theory: Indeed, this Theory

introduced a concept of a priori coalitions in the bargaining problem : Nash J.F (Nobel Prize, 1994)

visualized a deal as the outcome of either a process of negotiations, or else independent strategizing

by individuals, each pursuing his own interest. A priori coalitions must be according to Nash

concept- excluded, as they dont lead to pure individual strategies. From this point of view,

bargaining problem is transferred

Nash asked what reasonable conditions any division of gains from a bargain would then to satisfy. Hethen using, under conditions, an ingenious mathematical argument [An n-person game is a set of nplayers or positions each with an associate finite set of pure strategies and corresponding to each


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player i a payoff function pi which maps the set of all n-tuples of pure strategies into the real

numbers (Nash J.F, 1951) ] showed that, a unique solution exists that maximises the product of the

participants utilities .

A two 2-person (or an n n-person) anticipation is based on utilities, coming up from given

information, equivalent to power factor in the bargain, as it leads to pure individual winning

strategies In particular, the more information , the more strategic power in the bargain According to

Nash, a priori coalitions must be excluded, as they do not generate pure individual strategies. In theopposite, a game (bargain) based on instant reflection strategies may be accepted (trusts theory), as it

generates pure individual strategies [ the best for me, according to my expectation from the bargain, in

relation with the best for the other part of negotiations, so both to win : win-win] Bargaining process

has been promoted by the N.C.G Theory: Indeed, the N.C.G Theory introduced a concept of

coalitions or trusts in the bargaining problem : Nash J.F (Nobel Prize, 1994) visualized a dealas the outcome of either a process of negotiations, or else independent strategizing by individuals,each pursuing his own interest.IN MATH FORM :

A) In the utility theory of the individual, the concept of anticipationis the most important. Lets,A and B two anticipations. Then, if p is the property of anticipations, or the probability

and 0 p 1, then, there is an anticipation, which we represent by p (A) + ( 1 p ) B , which isa combination of the two anticipations. There is a probability pfor the Aanticipation and a

probability 1 - pfor the B anticipation. Thus assumptions suffice to show the existence of satisfactory utility function u, (not unique function) assigning a real number to each

anticipation of an individual.

B) If A and B represent two individual alternative anticipations and small letters representreal numbers, then a utility function will satisfy the following properties:

u (A) > u (B) is equivalent toA is more desirable than B

If 0 p 1 , then u [ p A + ( 1 p ) B ] = p u A + ( 1 p ) u BC) In the Two person utility Theory there are two individuals in bargaining, or dealing with

situation who have the opportunity to collaborate for mutual benefit in more than one way (In the

simple case, no action, taken by the one of individuals without the consent of the other can affectthe well-being of the other one. In fact, there is only ONE decision.

D) In n-person-games J. F Nash proved that these games have valuesthat is to determine whatis worth to each player to have the opportunity to engage the game (except the case of two-personzero-sum games

E) We may regard the one person utility functions as applicable to the two persons anticipations,

each giving the result it would give if applied to the corresponding one-person anticipation, which

is a component of the two-person anticipation

F) A probability combination of two two-person anticipations is defined by making thecorresponding combinations for their components Thus, if [A, B] is a two-person anticipation and

0 p 1 then p [A, B] + ( 1 p ) [ C, D ] will be defined as [ p A + ( 1 p ) C + p B + ( 1 p )

D. The one-person utility function will have the same linearity property here as the one-personcase. From this point of view onwards when the term anticipation is used- it shall mean two-

person anticipation (a transportation problem from manifolds to two-distance problem). In thebargaining situation one anticipation is especially distinguished, the anticipation of no

cooperation between bargainers (zero-sum).G) Ifu 1 , u 2 are utility functions for two individuals and c (S) represent the Solution point in a

set S which is compact and convex, then , if a is a point of S and b another point of

S so that u1(b)>u2(a) and u2(b)>u2(a)a#c(S)For Nash an n-person game is a set of n-players or positions each with an associate finite set ofpurestrategies and corresponding to each playeriapayoff function pi which maps the set of all n-tuples

of pure strategies into the real numbers (n-tuples means a set of n items, with each item associatedwith a different player. From the other, a mixed-strategy (si) are in 1-1 correspondencewith each

player pure strategies: (si) = a ci a i a, ci a 0 and a ci a = 1 The payoff function pihas aunique extensionto n-tuples of mixed strategies which are linear to the mixed strategy of each player[n-linear ] the extension is marked bypi pi(s1, s2,sn), where &= s1, s2,, sn.An n-tuple has an

equilibrium point if and only if for every player i , Pi (&) = max [ pi (&, ri, ] , (ri= the each playerdesirable outcome)


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Concluding, at any moment according to the N. C. G Theory- there is only one equilibrium

point that any individual makes at any moment- the best choices for himself, in relation with the

other persons best choices. So there are more than one equilibrium points of best choices,introducing the dynamic view in the bargaining problem.

5.2.2 Relation between Utility and Strategies (individual strategies)

Utilityexpresses individual choices based on individual necessities and will It is rather a subjective

than objective factor, influencing individual behavior

From the other hand, individual strategies in the bargain the objective factor- are defined by

personal choices and will coming from the necessity to meet personal needs

From this point of view, Utility , as subjective factor is expressed by strategy an individual

winning strategy- in the bargain, so 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 realize this ability, step by step: Strategy presupposes

Utility , but this is one-way relation: Utility does not presuppose Strategy (by its common sense)

In a same way, there are links between Utility and Strategy , in their math approaches:

Its rather easy to suppose two separate factors (the subjective Utility and the objective

Strategy) , expressing each- other: Ua = Pi, Ub = Ri , Uc = Qi , ....in a math approach:

In Tables 1 and 2 , shares and Utilities are expressed independently in a bargain s pay-off

function. Lets see at Table 1:

Ua = x , Ub = (100-x)k and f = [ x (100-x)k ] = 0 , in order Ua and Ub = max

From the other hand, final equation, coming from the math model development has the form of

lim Pi(&) Qi(&) Ri(&) = max Pi Qi Ri

ior, how to transform competition to an absolute cooperation form, in the bargain, taking into

account the integrated information, included the sensitization factor which influences

individual behavior and/or by this, the decision making and winning strategies according to

this (social) behavior.

6. Bargaining problem and pay-offs: Nash Theory

6.1 The Sharing problem in a Bargain [ Utilities, Shares, strategies, decision- choices, behaviour,

Final Agreement]

Having defined

How information formed by the knowledge creation and knowledge transfer should

contribute to what we call social market

How and why sensitization should be introduced to given information so to turn it to an

integrated information

How integrated information should influence human behaviour, during the bargain, or

negotiations

How a human social behaviour could lead to a new perception of thinking or taking adecision, in the bargain


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How socialization could influence human choices or winning strategies during the

bargain, in the frame of instant reflection (Nash)

How , the scientific thought , could transfer the problem from utilities (personal

perception) to pay-offs (objective perception = counting size)

THEN it should be necessary to estimate the BARGAINING PROBLEM, by its pay-offs

(Tables 1 & 2): [ Table 1 concerns TWO (2) bargainers . In Table 2, the3rd or invisible part i.e

the COMMUNITY (people expectations) is introduced

TABLE 1

Random Sharing between A and B

Share

(%)

Share

(%)

Utility Utility Utility AXB

100 0 71 0 0

90 10 70 1 70

80 20 68 5 340

70 30 64 10 960

60 40 60 16 960

50 50 52 23 1196

40 60 40 31 1240

( max )

30 70 24 40 960

20 80 12 50 600

10 90 4 61 244

0 100 0 80 0

J.F. Nash (1950) highlighted the payoffs of the bargain, out of personal expectations

Note :

Utility is a personal matter: Utility units are not compared

Utility units expressed the fear of breaking down the agreement (of sharing):

If A needs more the agreement than the payoff, then he should be ready to accept any

form of agreement.

If A has decide to break down the future agreement, then he risks more but at the same

time- wins more from the agreement

The utility range expressed the optimist instant reflection of each part

THE UTILITY FUNCTION:

Suppose that the Utility Function f(u) is given as below:

Utility for A Ua= x

&

Utility for B Ub= (100-x)

then the price of x (x*), maximizes (max=first derive ) the

f(x) = x (100-x)k

,f(x) =0

[ x (100-x)k] = 0

x*% = [ (100/k+1)] %

{ see at (ab) = ab + ab }

k is the key-factor

If k=1, then the agreement leads to 50-50,

If k1, then, either A is the winner, or B is the winner

In our example, the crucial point [ the max] is 1240 (40x31) : this is the point of final agreement led by

the bargain.


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On that point the 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 : Thats the

point of agreement, expressed fear of breaking down the agreement for player A and risk of

breaking down the agreement for the player B

S

7. The Suggesting win-win-win Sharing

7.1 The new sharing table

TA BLE 2 (PAPAKONSTANTINIDIS PROPOSAL)

The Suggesting Sharing between A , B and C

Share

(%)

Share

(%)

Utility

Utility

Utility

AXB

Share C

(%)

Utility

C

Utility

AXBXC

90 4 71 1 71 6 1 71

80 13 70 2 140 7 2 280

70 22 68 5 340 8 3 1020

60 31 64 10 640 9 4 2560

50 40 60 16 960 10 5 4800

max

41 50 52 23 1196 9 4 478432 60 40 31 1240 8 3 3720

23 70 24 40 960 7 2 1920

14 80 12 50 600 6 1 600

Note :

C is the Community , as the third invisible part in the bargain-

C as the new [ the third, or invisible] bargainer in the bargain between two persons ,

claims its own share , cutting it from A+B s shares

The less shares for A+B the more share for the invisible bargainer C

The more integrated information (=sensitization) for A+B , the more uncertainty (size of

entropy close to 1/3) for A+B , the less shares for them, the more share for the Community

Utility is a personal matter: Utility units are not compared each other

Utility units expressed the fear of breaking down the agreement (of sharing):

If A needs more the agreement than the payoff, then he should be ready to accept any

form of agreement.

If A has decide to break down the future agreement, then he risks more but at the same

time- wins more from the agreement


The suggested sharing according to the win-win-win model- derives a new equilibrium point

different from that of Table 1

7.2 Suggesting Sharing (Maths) approve :THE UTILITY FUNCTION:

Suggesting Sharing vs Nash Sharing


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introducing C = Community, as he third or invisible part of negotiations between TWO

Let, a, b the bargainers and c the invisible part

Then, let us to define utilities:

Ua = x

Uc = lx, when l = is a factor of the x proportionUb = (100-x-lx)k

It is obvious according to example 1- that :

Ua + Ub = Uc = max x [ (100-x-lx) k] = 0

then

x (100-x-lx)k+ x [(100-x-lx)k] = 0

then

1(100-x-lx)k+ xk (100-x-lx)k-1= 0

then

xk (100-x-lx)k-1 + 1(100-x-lx) k= 0

then

xk (100-x-lx)k-1

+ 1(100-x-lx)k-1

(100-x-lx) = 0then

xk (100-x-lx)k-1 = -[1(100-x-lx)k-1(100-x-lx)]

if (100-x-lx) # 0, then

xk = -[ (100-x-lx)]

then

xk +x +lx = 100 .... (really ...= -100)

[the (-) defines the opposite interests of bargainers]

x(k+1+l) = 100

finally

Cases

If k=0 , l = 0, then each of a, b, c bargainers may win the 100% of bargaining result (output)

If k=1 , l=0 then each of the a and c may win the 50% and the bargainer b nothing at all

If k=1 , l=1 then each of the a, b and c bargainers may win the 33.33 % (equal portions) : This is

the best point- fair sharing

If k>1, l>1 then a and b may win a percentage >33.33%, but there is a portion for the

Community- C

(as the third-or invisible part of the bargain between TWO)

If k


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Concluding [ first approach]:

1. The more Information, the more uncertainty

2. Information, as a form of negative Entropy goes to increase, as it is spent

3. Uncertainty as the Information Age (21st century) result goes to increase, following the evolution4. Technological changes and human and social relations move in the opposite direction-vice

versa.5. Its world necessity for changing status, in the benefit of civilization, in real terms of quality of life

6. The two-poles [0 - 1, black & white] system leads human relations to dead-end

7. Life itself is a marvelous paradigm of cooperation than competition

8. Introducing a three-poles dealing system may improve the bargaining perception thus

influencing social behavior, introducing a new bargaining ethic

9. 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.

Taking into account the Nash (1950) parameters, i.e:

Non-co-operative game between TWO players who have opposite individuals interests

Instant reflections- rational movements-cleverness

Define the game from the result (pay-off) not expectations- Best choices for both players towards

meeting individual interests [ winning strategies]

Do not regret from the decision taken based on personal choices

Respect to each-other best choices between the TWO bargainers

The more decisive to break the contact down in the negotiation, the more satisfied after the end of

negotiation

No ethic in negotiations: who has the need the negotiations to go to the end [to be implemented by

a contact] is the looser from these negotiations. Bargaining is in favor of whom holds power.

According to the above mentioned reasons,The Suggesting WIN-WIN-WIN Model:

1. May be concerned as a prediction of the future world, based on bargaining problem

2. In this future world, small societies & communities may have an important role, thus promoting

the community development : Development may be power in the future. At any case,

development will obtain the role defined by its own name, i. e the real improvement of quality of

life for all the people on earth !!

3. 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 co-operation

4. Reforming the competition to step towards social cohesion , the objective perception of the

world may be changed into a more ideological: From things to ideas and from materials to

minded and feeling world

5. Religious dogma leads to a 3-part [triada] godness[Father-Son-Holy Spirit], providing the

HARMONY in co-operation. The two-poles perception provides conflicts and competition,

leading to dead-end.

6. Introducing the third part in a negotiation between TWO (2) in practice, means an expectation

holding [ in terms of economic interests, ambitious etc] by both negotiators, having the third

person in their mind: Who, the third person should be? The answer is: environmental

protection, social cohesion, poverty violence etc

7. The World is based on two-poles system: Capitalism-Socialism, D.C - L.D.C black-white [0-

1, or bit in computer, etc. Greek Philosophy based its harmony on the third or metron

factor, which is the intermediate between two edges

8. Computer logistic systems construction should be transformed on the base of THREE [instead

of two) i. e [ 0 1 010] system , or [0 010 1] with the 010 as the intermediate step.


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9. Bargaining Holding conception by bargainers introduces a NEW ETHIC in the worlds

negative defenses human feelings, thus reducing, or either eliminating the bargaining

uncertainty.

10. The C partner my be proved to be the key-factor, against the war feelings which reformed thehuman society into a jungle of records AND MONEY at any field of human life (athletic,

economic life, social life etc) C-factor is the ancient Greek philosophys METRON

\

The payoff functions Pi(for the one part), Qi (for the other part), Ri (for the community) have unique

extensions to the n-tuples of mixed strategies(si) which are linear to the mixed strategies of all theparts These extensions are marked by pi, qi and ri for a three-person game, where, pi=s1,s2,

sn, qi=s1,s2..sn, ri=s1,s2..snAn n-tuple system & is an equilibrium point, if and only if , for every i

lim Pi(&)Qi(&)Ri(&) = max PiQiRi

Information (i)

{Papakonstantinidis, 2002-Aug}

/////////////////////////////////////////////////////////////////////////////////


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FOOTNOTES

BARGAIN :

May be the unique equilibrium point

between individual choices AND individual

expectations. Highlights the payoffs and the final

agreement among the TWO [2] competitors

according to the cost-benefit function,

without comparing each-others profit. This

agreement is achieved without taking into

account individual expectations. The moredecisive, the more winner It pre-supposes:

1. Bilateral Rational reflection in the highest level,

coming from both sides

2. None regrets about his/her choices after the end of

the game- Utility may be concerned as a

personal choice.


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3. There is a bilateral respect to others rational

reaction: Both bargainers estimate that the

opposite [ the other player] may be the same

clever as he /she is

4. Choices , coming from both sides are based on

instant reflection on the action of the other part

5. Both sides try to win, without taking into account

ethic, preferences, sympathy etc. It is the final

output the most important thing in a negotiation!!

6. Who is afraid of the version of breaking down

the agreement, has more need-so he has to lose

7. Who is decisive to break down the future

agreement , may be concerned as the winner8. Bargaining has its own legal rules, ethic and

procedures. Bargaining is competitive by itself.

S


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TABLE 2

The Suggesting Sharing between A , B and C

Share

(%)

Share

(%)

Utility

Utility

Utility

AXB

Share

C

(%)

Utility

C

Utility

AXBXC

90 4 71 1 71 6 1 71

80 13 70 2 140 7 2 280

70 22 68 5 340 8 3 102060 31 64 10 640 9 4 2560

50 40 60 16 960 10 5 4800

max

41 50 52 23 1196 9 4 4784

32 60 40 31 1240 8 3 3720

23 70 24 40 960 7 2 1920

14 80 12 50 600 6 1 600

Note :

C is the Community , as the third invisible part in the bargain-

C as the new [ the third, or invisible] bargainer in the bargain

between two persons , claims its own share , cutting it from A+B s

shares

The less shares for A+B the more share for the invisible bargainer C

The more integrated information (=sensitization) for A+B , the more

uncertainty (size of entropy close to 1/3) for A+B , the less shares for

them, the more share for the Community Utility is a personal matter: Utility units are not compared each other


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Utility units expressed the fear of breaking down the agreement (of

sharing):

If A needs more the agreement than the payoff, then he should be

ready to accept any form of agreement.

If A has decide to break down the future agreement, then he risks

more but at the same time- wins more from the agreement


The suggested sharing -according to the win-win-win model- derives a

new equilibrium point different from that of Table 1.

SUGGESTION

Changing the bilateral relation in a THREE-PART ,information-

based relation [ including the community - letter C]

as the third or invisible part in the bargain:

THREE-PART information-based RELATION

INSTANT REFLECTION

BARGAIN :

May be the unique equilibrium point between individual choices AND

individual expectations.

Highlights the payoffs and the final agreement among the TWO[2]

COMPETITORS according to the cost-benefit function, without

comparing each-others profit. This agreement is achieved without taking

into account individual expectations. The more decisive, the more

winner

It pre-supposes:

1. Bilateral Rational reflection in the highest level, coming from both

sides

2. None regrets about his/her choices after the end of the game-

Utility may be concerned as a personal choice.

3. There is a bilateral respect to others rational reaction: Both

bargainers estimate that the opposite [ the other player] may be

the same clever as he /she is

4. Choices , coming from both sides are based on instant reflectionon the action of the other part


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5. Both sides try to win, without taking into account ethic,

preferences, sympathy etc. It is the final output the most important

thing in a negotiation!!

6. Who is afraid of the version of breaking down the agreement, has

more need-so he has to lose

7. Who is decisive to break down the future agreement , may beconcerned as the winner

8. Bargaining has its own legal rules, ethic and procedures.

Bargaining is competitive by itself.

PROF PAPAKONSTANTINIDIS- NOV.2005

Durban Sa Final

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