Advances in negotiation theory : bargaining, coalitions, and fairness

Bargaining is ubiquitous in real life. It is a major dimension of political and business activities. It appears at the international level, when governments negotiate on matters ranging from economic issues (such as the removal of trade barriers), to global security (such as fighting against terrorism) to environmental and related issues (such as climate change control). What factors determinethe outcomes of such negotiations? What strategies can help reach an agreement? How should the parties involved divide the gains from cooperation? With whom will one make alliances? The authors address these questions by focusing on a noncooperative approach to negotiations, which is particularly relevant for the study of international negotiations. By reviewing noncooperative bargaining theory, noncooperative coalition theory, and the theory of fair division, they try to identify the connections among these different facets of the same problem in an attempt to facilitate progress toward a unified framework.Economic Theory&Research,Social Protections&Assistance,Environmental Economics&Policies,Scientific Research&Science Parks,Science Education

Advances in Negotiation Theory: Bargaining, Coalitions and Fairness

Bargaining is ubiquitous in real-life. It is a major dimension of political and business activities. It appears at the international level, when governments negotiate on matters ranging from economic issues (such as the removal of trade barriers), to global security (such as fighting against terrorism) to environmental and related issues (e.g. climate change control). What factors determine the outcome of negotiations such as those mentioned above? What strategies can help reach an agreement? How should the parties involved divide the gains from cooperation? With whom will one make alliances? This paper addresses these questions by focusing on a non-cooperative approach to negotiations, which is particularly relevant for the study of international negotiations. By reviewing noncooperative bargaining theory, non-cooperative coalition theory, and the theory of fair division, this paper will try to identify the connection among these different facets of the same problem in an attempt to facilitate the progress towards a unified framework.Negotiation theory, Bragaining, Coalitions, Fairness, Agreements

Advances in Negotiation Theory: Bargaining, Coalitions and Fairness

Bargaining is ubiquitous in real-life. It is a major dimension of political and business activities. It appears at the international level, when governments negotiate on matters ranging from economic issues (such as the removal of trade barriers), to global security (such as fighting against terrorism) to environmental and related issues (e.g. climate change control). What factors determine the outcome of negotiations such as those mentioned above? What strategies can help reach an agreement? How should the parties involved divide the gains from cooperation? With whom will one make alliances? This paper addresses these questions by focusing on a non-cooperative approach to negotiations, which is particularly relevant for the study of international negotiations. By reviewing non-cooperative bargaining theory, non-cooperative coalition theory, and the theory of fair division, this paper will try to identify the connection among these different facets of the same problem in an attempt to facilitate the progress towards a unified framework.Negotiation theory, Bargaining, Coalitions, Fairness, Agreements

Negotiating Concurrently with Unknown Opponents in Complex, Real-Time Domains

We propose a novel strategy to enable autonomous agents to negotiate concurrently with multiple, unknown opponents in real-time, over complex multi-issue domains. We formalise our strategy as an optimisation problem, in which decisions are based on probabilistic information about the opponents' strategies acquired during negotiation. In doing so, we develop the first principled approach that enables the coordination of multiple, concurrent negotiation threads for practical negotiation settings. Furthermore, we validate our strategy using the agents and domains developed for the International Automated Negotiating Agents Competition (ANAC), and we benchmark our strategy against the state-of-the-art. We find that our approach significantly outperforms existing approaches, and this difference improves even further as the number of available negotiation opponents and the complexity of the negotiation domain increases

Market Information and the Elite law Firm

As a subcategory of contract negotiations, corporate transactions present information problems that have not been fully analyzed. In particular, the literature does not address the possibility that parties may simply be unaware of value-increasing transaction terms or their outside option. Such unawareness can arise even for transactions that attract many competing parties, if the bargaining process is such that (1) the price terms are negotiated and fixed prior to the non-price terms, contrary to the standard assumption; and (2) some of the non-price terms remain private for some period of time. A simple bargaining model shows that, when such unawareness is reasonably probable, each transaction party will maximize its expected payoff by acquiring current market information about non-price transaction terms. Because they have unique access to it, law firms with a significant share of transactional advisory work play an important role in aggregating and selling such market information. The implication is that, absent shocks to transactional practice, the volume advantage of high-market-share law firms should be self-perpetuating. This result is consistent with the observation that the legal advisory market for major corporate transactions is highly concentrated, and that the top firms earn substantial and persistent rents

Bargaining and Negotiations What should experimentalists explore more thoroughly?

A long time ago most economists would have limited themselves to stating that agreements should be individually rational and efficient and that selecting a specific agreement from that set depends on bargaining and negotiation power whatever that may be. Nowadays hardly any economist will argue that way. The change has been brought about by the strategic approach to bargaining and cooperation and the parallel experimental studies of bargaining and negotiation. When arguing what should be explored more thoroughly, we will point out directions where previous efforts may have been misdirected, where importing new methods may be helpful or even needed, and where new research questions need to be asked and answered.(un)bounded rationality, (non-)cooperative game theory, bargaining and negotiation (theory and experiments)

Bargaining with Incomplete Information

A central question in economics is understanding the difficulties that parties have in reaching mutually beneficial agreements. Informational differences provide an appealing explanation for bargaining inefficiencies. This chapter provides an overview of the theoretical and empirical literature on bargaining with incomplete information. The chapter begins with an analysis of bargaining within a mechanism design framework. A modern development is provided of the classic result that, given two parties with independent private valuations, ex post efficiency is attainable if and only if it is common knowledge that gains from trade exist. The classic problems of efficient trade with one-sided incomplete information but interdependent valuations, and of efficiently dissolving a partnership with two-sided incomplete information, are also reviewed using mechanism design. The chapter then proceeds to study bargaining where the parties sequentially exchange offers. Under one-sided incomplete information, it considers sequential bargaining between a seller with a known valuation and a buyer with a private valuation. When there is a "gap" between the seller's valuation and the support of buyer valuations, the seller-offer game has essentially a unique sequential equilibrium. This equilibrium exhibits the following properties: it is stationary, trade occurs in finite time, and the price is favorable to the informed party (the Coase Conjecture). The alternating-offer game exhibits similar properties, when a refinement of sequential equilibrium is applied. However, in the case of "no gap" between the seller's valuation and the support of buyer valuations, the bargaining does not conclude with probability one after any finite number of periods, and it does not follow that sequential equilibria need be stationary. If stationarity is nevertheless assumed, then the results parallel those for the "gap" case. However, if stationarity is not assumed, then instead a folk theorem obtains, so substantial delay is possible and the uninformed party may receive substantial surplus. The chapter also briefly sketches results for sequential bargaining with two-sided incomplete information. Finally, it reviews the empirical evidence on strategic bargaining with private information by focusing on one of the most prominent examples of bargaining: union contract negotiations.Bargaining; Delay; Incomplete Information

Automated Negotiation for Complex Multi-Agent Resource Allocation

The problem of constructing and analyzing systems of intelligent, autonomous agents is becoming more and more important. These agents may include people, physical robots, virtual humans, software programs acting on behalf of human beings, or sensors. In a large class of multi-agent scenarios, agents may have different capabilities, preferences, objectives, and constraints. Therefore, efficient allocation of resources among multiple agents is often difficult to achieve. Automated negotiation (bargaining) is the most widely used approach for multi-agent resource allocation and it has received increasing attention in the recent years. However, information uncertainty, existence of multiple contracting partners and competitors, agents\u27 incentive to maximize individual utilities, and market dynamics make it difficult to calculate agents\u27 rational equilibrium negotiation strategies and develop successful negotiation agents behaving well in practice. To this end, this thesis is concerned with analyzing agents\u27 rational behavior and developing negotiation strategies for a range of complex negotiation contexts. First, we consider the problem of finding agents\u27 rational strategies in bargaining with incomplete information. We focus on the principal alternating-offers finite horizon bargaining protocol with one-sided uncertainty regarding agents\u27 reserve prices. We provide an algorithm based on the combination of game theoretic analysis and search techniques which finds agents\u27 equilibrium in pure strategies when they exist. Our approach is sound, complete and, in principle, can be applied to other uncertainty settings. Simulation results show that there is at least one pure strategy sequential equilibrium in 99.7% of various scenarios. In addition, agents with equilibrium strategies achieved higher utilities than agents with heuristic strategies. Next, we extend the alternating-offers protocol to handle concurrent negotiations in which each agent has multiple trading opportunities and faces market competition. We provide an algorithm based on backward induction to compute the subgame perfect equilibrium of concurrent negotiation. We observe that agents\u27 bargaining power are affected by the proposing ordering and market competition and for a large subset of the space of the parameters, agents\u27 equilibrium strategies depend on the values of a small number of parameters. We also extend our algorithm to find a pure strategy sequential equilibrium in concurrent negotiations where there is one-sided uncertainty regarding the reserve price of one agent. Third, we present the design and implementation of agents that concurrently negotiate with other entities for acquiring multiple resources. Negotiation agents are designed to adjust 1) the number of tentative agreements and 2) the amount of concession they are willing to make in response to changing market conditions and negotiation situations. In our approach, agents utilize a time-dependent negotiation strategy in which the reserve price of each resource is dynamically determined by 1) the likelihood that negotiation will not be successfully completed, 2) the expected agreement price of the resource, and 3) the expected number of final agreements. The negotiation deadline of each resource is determined by its relative scarcity. Since agents are permitted to decommit from agreements, a buyer may make more than one tentative agreement for each resource and the maximum number of tentative agreements is constrained by the market situation. Experimental results show that our negotiation strategy achieved significantly higher utilities than simpler strategies. Finally, we consider the problem of allocating networked resources in dynamic environment, such as cloud computing platforms, where providers strategically price resources to maximize their utility. While numerous auction-based approaches have been proposed in the literature, our work explores an alternative approach where providers and consumers negotiate resource leasing contracts. We propose a distributed negotiation mechanism where agents negotiate over both a contract price and a decommitment penalty, which allows agents to decommit from contracts at a cost. We compare our approach experimentally, using representative scenarios and workloads, to both combinatorial auctions and the fixed-price model, and show that the negotiation model achieves a higher social welfare

Tasks for Agent-Based Negotiation Teams:Analysis, Review, and Challenges

An agent-based negotiation team is a group of interdependent agents that join together as a single negotiation party due to their shared interests in the negotiation at hand. The reasons to employ an agent-based negotiation team may vary: (i) more computation and parallelization capabilities, (ii) unite agents with different expertise and skills whose joint work makes it possible to tackle complex negotiation domains, (iii) the necessity to represent different stakeholders or different preferences in the same party (e.g., organizations, countries, and married couple). The topic of agent-based negotiation teams has been recently introduced in multi-agent research. Therefore, it is necessary to identify good practices, challenges, and related research that may help in advancing the state-of-the-art in agent-based negotiation teams. For that reason, in this article we review the tasks to be carried out by agent-based negotiation teams. Each task is analyzed and related with current advances in different research areas. The analysis aims to identify special challenges that may arise due to the particularities of agent-based negotiation teams.Comment: Engineering Applications of Artificial Intelligence, 201

The Reality and Masquerade behind Bargaining over Welfare Pie Sizing, Delivery and Slicing.

The present analysis addresses the apparently critical issue of circulation of wealth in society. Three actors play the game of welfare-related taxation. The first actor, in the role of Negotiator No.1, stands up for citizens’ legal and moral rights to primary needs. The second actor, in the role of Negotiator No.2, proceeds in response to public will for the provision and delivery of public goods. Quite the opposite, the third actor, hereinafter named the Voter, who represents the taxpayers, prefers personal consumption to moral understanding and public activity. In fact, backed by electoral maneuvering, the Voter emanates a risk to break down negotiations. The result of the simulation provides an evidence for the claim that a 50% median income is close enough to be considered a realistic choice of poverty line within the variety or rules of the alternating-offers bargaining game and conditions for unanimous consent of voter-citizens.bargaining; policy; public goods; simulation; taxation; voting