Price of Steel p* A B E Work Sheet [Steel Company VS Downstream Community] Strategy Q*(Society) Net Benefit if Produced at Q*(Society) Which level of output does Steel Company Prefer? (Q*(Society) OR Q*(Private)) D F Pre-Negotiation Setting Q1. Find the size of Net Benefit (Benefit - Cost) without any Negotiation Steel Company Society Net Benefit if Produced at Q* (Private) Net Benefit if Produced at Q*(Private) Negotiation Outcome (Q*, Net Benefit(Steel) 1 Q*(Private) Quantity of Steel Production Net Benefit if Produced at Q*(Society) Private Negotiation Q2. Now each party can negotiate. What do you negotiate, what are the outcomes (Q* and Net Benefit) of the negotiation? Objective of Negotiation (Steel Company Side) Which level of output does Community Prefer? (Q*(Society) OR Q* (Private)) Strategy Objective of Negotiation (Community Side) Negotiation Outcome (Q*, Net Benefit (Society)