Negotiating over Bundles and Prices Using Aggregate Knowledge

Combining two or more items and selling them as one good, a practice called bundling, can be a very effective strategy for reducing the costs of producing, marketing, and selling goods. In this paper, we consider a form of multi-issue negotiation where a shop negotiates both the contents and the price of bundles of goods with his customers. We present some key insights about, as well as a technique for, locating mutually beneficial alternatives to the bundle currently under negotiation. The essence of our approach lies in combining historical sales data, condensed into aggregate knowledge, with current data about the ongoing negotiation process, to exploit these insights. In particular, when negotiating a given bundle of goods with a customer, the shop analyzes the sequence of the customer's offers to determine the progress in the negotiation process. In addition, it uses aggregate knowledge concerning customers' valuations of goods in general. We show how the shop can use these two sources of data to locate promising alternatives to the current bundle. When the current negotiation's progress slows down, the shop may suggest the most promising of those alternatives and, depending on the customer's response, continue negotiating about the alternative bundle, or propose another alternative. Extensive computer simulation experiments show that our approach increases the speed with which deals are reached, as well as the number and quality of the deals reached, as compared to a benchmark. In addition, we show that the performance of our system is robust to a variety of changes in the negotiation strategies employed by the customers.Comment: 15 pages, 7 eps figures, Springer llncs documentclass. Extended version of the paper published in "E-Commerce and Web Technologies," Kurt Bauknecht, Martin Bichler and Birgit Pr\"{o}ll (eds.). Springer Lecture Notes in Computer Science, Volume 3182, Berlin: Springer, p. 218--22

Negotiating over bundles and prices using aggregate knowledge

Combining two or more items and selling them as one good, a practice called bundling, can be a very effective strategy for reducing the costs of producing, marketing, and selling goods. In this paper, we consider a form of multi-issue negotiation where a shop negotiates both the contents and the price of bundles of goods with his customers. We present some key insights about, as well as a technique for, locating mutually beneficial alternatives to the bundle currently under negotiation. The essence of our approach lies in combining historical sales data, condensed into aggregate knowledge, with current data about the ongoing negotiation process, to exploit these insights. In particular, when negotiating a given bundle of goods with a customer, the shop analyzes the sequence of the customer's offers to determine the progress in the negotiation process. In addition, it uses aggregate knowledge concerning customers' valuations of goods in general. We show how the shop can use these two sources of data to locate promising alternatives to the current bundle. When the current negotiation's progress slows down, the shop may suggest the most promising of those alternatives and, depending on the customer's response, continue negotiating about the alternative bundle, or propose another alternative. Extensive computer simulation experiments show that our approach increases the speed with which deals are reached, as well as the number and quality of the deals reached, as compared to a benchmark. In addition, we show that the performance of our system is robust to a variety of changes in the negotiation strategies employed by the customers

Negotiating over bundles and prices using aggregate knowledge

Combining two or more items and selling them as one good, a practice called bundling, can be a very effective strategy for reducing the costs of producing, marketing, and selling goods. In this paper, we consider a form of multi-issue negotiation where a shop negotiates both the contents and the price of bundles of goods with his customers. We present some key insights about, as well as a technique for, locating mutually beneficial alternatives to the bundle currently under negotiation. The essence of our approach lies in combining historical sales data, condensed into aggregate knowledge, with current data about the ongoing negotiation process, to exploit these insights. In particular, when negotiating a given bundle of goods with a customer, the shop analyzes the sequence of the customer's offers to determine the progress in the negotiation process. In addition, it uses aggregate knowledge concerning customers' valuations of goods in general. We show how the shop can use these two sources of data to locate promising alternatives to the current bundle. When the current negotiation's progress slows down, the shop may suggest the most promising of those alternatives and, depending on the customer's response, continue negotiating about the alternative bundle, or propose another alternative. Extensive computer simulation experiments show that our approach increases the speed with which deals are reached, as well as the number and quality of the deals reached, as compared to a benchmark. In addition, we show that the performance of our system is robust to a variety of changes in the negotiation strategies employed by the customers

Online Learning of Aggregate Knowledge about Non-linear Preferences Applied to Negotiating Prices and Bundles

In this paper, we consider a form of multi-issue negotiation where a shop negotiates both the contents and the price of bundles of goods with his customers. We present some key insights about, as well as a procedure for, locating mutually beneficial alternatives to the bundle currently under negotiation. The essence of our approach lies in combining aggregate (anonymous) knowledge of customer preferences with current data about the ongoing negotiation process. The developed procedure either works with already obtained aggregate knowledge or, in the absence of such knowledge, learns the relevant information online. We conduct computer experiments with simulated customers that have_nonlinear_ preferences. We show how, for various types of customers, with distinct negotiation heuristics, our procedure (with and without the necessary aggregate knowledge) increases the speed with which deals are reached, as well as the number and the Pareto efficiency of the deals reached compared to a benchmark.Comment: 10 pages, 5 eps figures, ACM Proceedings documentclass, Published in "Proc. 6th Int'l Conf. on Electronic Commerce ICEC04, Delft, The Netherlands," M. Janssen, H. Sol, R. Wagenaar (eds.). ACM Pres

Online learning of aggregate knowledge about non-linear preferences applied to negotiating prices and bundles

In this paper, we consider a form of multi-issue negotiation where a shop negotiates both the contents and the price of bundles of goods with his customers. We present some key insights about, as well as a procedure for, locating mutually beneficial alternatives to the bundle currently under negotiation. The essence of our approach lies in combining aggregate (anonymous) knowledge of customer preferences with current data about the ongoing negotiation process. The developed procedure either works with already obtained aggregate knowledge or, in the absence of such knowledge, learns the relevant information online. We conduct computer experiments with simulated customers that have emph{nonlinear} preferences. We show how, for various types of customers, with distinct negotiation heuristics, our procedure (with and without the necessary aggregate knowledge) increases the speed with which deals are reached, as well as the number and the Pareto efficiency of the deals reached compared to a benchmar

The economic evolution of petroleum property rights in the United States.

We examine Harold Demsetz's (1967) prediction that property rights emerge and are refined as the benefits of doing so exceed the costs in the context of oil and gas resources in the U.S. Familiar influences on the development of petroleum property rights, technology, market demand, and politics, provide support for the hypothesis, and those issues are examined. Our primary contribution is to demonstrate the important role of a less familiar factor, the presence in the reservoir of both oil and gas with differentially volatile prices. This factor has affected the nature of the property rights assigned with unitization, an institutional arrangement to internalize the common pool externality. Information asymmetries and conflicting price expectations have resulted in unit agreements that would not have been predicted in a strict neo-classical sense. Our analysis provides new insights regarding the nature of voluntary unitization contracts, inherent limits to producers' ability to internalize externalities, and the welfare implications of compulsory unitization.

Weightless machines and costless knowledge - an empirical analysis of trade and technology diffusion

The authors examine the impact on productivity of technologies imported by a sample of developing, and transition economies in Central and Easter Europe, and the Southern Mediterranean - economies becoming increasingly integrated with the European Union. They depart from earlier studies of technology diffusion by focusing on the technology embodied in the machines imported. Earlier work focused mostly on spillovers from foreign research, and development conveyed through trade, without controlling for the characteristics of the goods imported. The authors jointly estimate the choice of foreign technology, and its impact on domestic productivity for a set of manufacturing sectors. They proxy the technological level of the machines imported, by using an index relating the unit value of the machines imported by a given country, to the unit value of similar machines imported by the United States. At any point in time between 1989 and 1997, there is a persistent (even increasing) gap between the unit values of the machines imported by the United States, and those imported by the sample of developing countries. Although developing economies buy increasingly productive machines, the technology embodied in the machines persistently lags behind that in the machines purchased by the United States - so far as unit values are good proxies of embodied technologies. The authors also find that productivity growth in manufacturing, depends on the types of machines imported in a given industry. So although the optimal choice for developing countries is to buy cheaper, less sophisticated machines, given local skills and factor prices, this choice has a cost in long-run productivity growth. If productivity is low, countries buy low-technology machines, but doing so keeps them in a low-technology, low-growth trap.Environmental Economics&Policies,Labor Policies,Banks&Banking Reform,Economic Theory&Research,General Technology,Banks&Banking Reform,Environmental Economics&Policies,Economic Theory&Research,General Technology,ICT Policy and Strategies

Economic and Welfare Impacts of the EU-Africa Economic Partnership Agreements

Th is study examines the economic and social impacts of the trade liberalization aspects of the proposed Economic Partnership Agreements (EPAs) between the European Union (EU) and African countries. It provides a quantitative assessment of the likely implications of EPAs establishing Free Trade Areas (FTAs) between the EU and the various African Regional Economic Communities (RECs). Th e focus of the empirical analysis is on the trade liberalization component of the EPAs. In particular, the following questions are addressed. First, how will an EPA that includes reciprocal market access agreements between the EU and Africa impact on African countries’ GDPs, levels of employment and other macroeconomic aggregates? Second, what sectors in Africa are most likely to lose and what sectors gain with EPAs? Th ird, what are the welfare implications for African countries from the EPAs? Fourth, how will the formation of EPAs aff ect trade expansion through trade creation and trade diversion eff ects? Fifth, what are the potential fi scal implications of the EPAs? Th e main conclusions drawn from the results and the discussions are that full reciprocity will be very costly for Africa irrespective of how the issue is looked at. A focus on deepening integration with a view to enhancing intra-African trade would provide positive results. But it is the scenario that off ers unrestricted market access for Africa, which deals eff ectively with barriers associated with sensitive European products, that portends the largest gain for the continent. Even with reciprocity, a free trade area that includes sectors of export interest to Africa and one that deals with non-tariff barriers promises positive results for African countries.EPA- Africa- Europe