Leadership Transitions: The Watkins Collection (4 Items)

tier are inefficient in the sense that there were potential agree-

ments, if the two sides had been able to find them, that would

have made both sides better off. Equivalently, deals inside this

frontier “leave value on the table.”

A given deal creates value but also divides it between the two

sides. Agreements around the 45-degree line are more balanced;

both sides capture a significant amount of the value that is

created. This would be the case, for example, if Omega agreed

to pay Beta $30,000 to speed up delivery by one month. This is

$20,000 more than it costs Beta, but also $20,000 less than the

value that the accelerated delivery creates for Omega. ...