When two people come together and one party wants what the other has, and vice versa, they would have to reach a conclusion usually by negotiating.
We can certainly see this in a small clip from the American TV series FRIENDS where Rachel and Chandler negotiates for what the other have. The first half of the clip, Chandler was the negotiator and was the first to make his offer, and from the middle of the clip, the positions switched to Rachel becoming the negotiator.
In the first negotiation, Chandler wanted Rachel to unlock him from the chair, however Rachel would not do it unless he breaks up with Joanna and buys her a walkman. Rachel identified her interest and Chandler closed it with agreeing on her terms.
However, Chandler got cuffed again, which led to a second negotiation, this time with Rachel being the negotiator.
In this case, Chandler wanted freedom while Rachel wanted Chandler to be cuffed again. Hence, Rachel made offers with choices to Chandler but one at a time, and each time her offer was rejected. Towards the end, Rachel used the method of threat towards Chandler.
Rachel's threat was to spread rumors about what happened in Joanna's office that will seem to embarrass Chandler among his friends. The Pareto efficient outcome maximizes the results through parrot improvements where no one can be made better without hurting the other side. In this case the Pareto efficiency is satisfied.
At the same time, Chandler is given two of Rachel's outcomes considering what Chandler will do. This is very similar to Prisoners' Dilemma where two individuals act in their own best interest to pursue a course of action that instead results in the ideal outcome as they both know each individuals' choice of action.
Therefore, here Rachel made her threat more valuable than Chandler's want which is his freedom. So both Rachel and Chandler are happy conclusively in a sense that Rachel could presumably keep her job and Chandler will break up with Joanna and not have Rachel spread any unwanted rumors.
By Hui Xie (Blog 5)