The preface is as follows:
"Reuben and Shimon are placed into a small room with a suitcase containing $100,000 of cash. The owner of the suitcase offers them the following: "I'll give you all the money in the suitcase, but only on the condition that you negotiate and reach an amicable agreement on its division. That’s the only way I will give you the money."
Reuben, who is a rational person, appreciates the golden opportunity presented to him and turns to Shimon with the obvious suggestion: "Come, you take half the amount, I'll take the other half, and each of us will go away with $50,000." To his surprise, Shimon, with a serious look on his face and a determined voice says: "Listen, I do not know what your intentions are with the money, but I'm not leaving this room with less than $90,000. Take it or leave it. I’m fully prepared to go home with nothing."
Reuben can not believe his ears. What happened to Shimon? he thinks to himself. Why should he get 90%, and I only 10%? He decides to try to talk to Simon. "Come, be reasonable," he pleads. "We're both in this together, and we both want the money. Come let’s share the amount equally and we’ll both come out ahead.”
But the reasoned explanation of his friend does not seem to register on Shimon. He listens attentively to Reuben’s words, but then declares even more emphatically, "There is nothing to discuss. 90-10 or nothing, that's my final offer!" Reuben's face turns red with anger. He wants to smack Shimon across his face, but soon reconsiders. He realizes that Shimon is determined to leave with majority of the money, and that the only way for him to leave the room with any money is to surrender to Shimon’s blackmail. He straightens his clothes, pulls out wad of bills from the suitcase in the amount of $10,000, shakes hands with Shimon and leaves the room looking forlorn.
This case in Game Theory is called the “Blackmailer Paradox." The paradox emerging from this case is that the rational Reuben is eventually forced to act clearly irrationally, in order to gain the maximum available to him. The logic behind this bizarre result is that Shimon broadcast total faith and confidence in his excessive demands, and it is able to convince Reuben to yield to his blackmail in order for him to receive the minimum benefit."
Israel has always been a rather poor negotiator because Israel tries to act rationally in the face of irrational enemies.
For example, Government after government has "offered" the Palestinians upwards of 90% of Yehuda vShomron (the West Bank), as a starting position for negotiations, while the Palestinian's opening negotiation point is always, 100% of everything with Jerusalem as the capital of "Palestine". There's huge fanfare when PA President Abbas announces that Israel could maintain a "presence" in the Jewish quarter of the Old City and part of the Western wall...
Of course, any land they "forfeit" in their opening negotiating position, is immediately qualified that they demand 100% of the land mass, with "land swaps" for any bit that Israel may get.
According to the report, Abbas proposes that a Palestinian state be established on the entire territory of the West Bank, but with a 2.3% land swap. This territory would include Gush Etzion, Givat Ze'ev and Modi'in Illit, as well as a strip of land near Ben Gurion International Airport.While some dance for joy at the "moderate" position of Abbas, within hours, the PLO denies that such a position was even presented.
In exchange, the Palestinians demand a similar area of land south of Hebron. The report made no mention of the Palestinian stance on Maale Adumim and Ariel (ynet)
Chief PLO negotiator Saeb Erekat denied reports on Saturday that President Mahmoud Abbas conveyed a list of proposals to Israel through US Middle East envoy George Mitchell on final status agreements.Israel needs to get serious about negotiating with the Palestinians -- and let them know as our opening position, 100% of Yehuda vShomron is the historical land of Israel.
Otherwise, we're just going to lose again.