A Heuristic Approach to Proposal-Based Negotiation: with Applications in Fashion Supply Chain Management

In this paper, we extend and improve the formal, executable framework for automated multi-issue negotiation between two autonomous competitive software agents proposed by Cadoli. This model is based on the view of negotiation spaces (or "areas"), representing the admissible values of the goods involved in the process as convex regions. However, in order to speed up the negotiation process and guarantee convergence, there was the restriction of potential agreements to vertices included in the intersection of the two areas. We present and assess experimentally an extension to Cadoli's approach where, for both participating agents, interaction is no longer vertex based, or at least not necessarily so. This eliminates the asymmetry among parties and the limitation to polyhedral negotiation areas. The extension can be usefully integrated to Cadoli's framework, thus obtaining an enhanced algorithm that can be effective in many practical cases. We present and discuss a number of experiments, aimed at assessing how parameters influence the performance of the algorithm and how they relate to each other. We discuss the usefulness of the approach in relevant application fields, such as, for instance, supply chain management in the fashion industry, which is a field of growing importance in economy and e-commerce

The impact of the unilateral EU commitment on the stability of international climate agreements

In this paper we analyze the negotiation strategy of the European Union regarding the formation of an international climate agreement for the post-2012 era. We use game theoretical stability concepts to explore incentives for key players in the climate policy game to join future climate agreements. We compare a minus 20 percent unilateral commitment strategy by the EU with a unilateral minus 30 percent emission reduction strategy for all Annex-B countries. Using a numerical integrated assessment climate-economy simulation model, we find that carbon leakage effects are negligible. The EU strategy to reduce emissions by 30% (compared to 1990 levels) by 2020 if other Annex-B countries follow does not induce participation of the USA with a similar 30% reduction commitment. However, the model shows that an appropriate initial allocation of emission allowances may stabilize a larger and more ambitious climate coalition than the Kyoto Protocol in its first commitment period.climate change, coalition theory, integrated assessment model, Kyoto protocol.

Trade Credit, International Reserves and Sovereign Debt

We present a unified model of sovereign debt, trade credit and international reserves. Our model shows that access to short-term trade credit and gross international reserves critically affect the outcome of sovereign debt renegotiations. Whereas competitive banks do optimally lend for the accumulation of borrowed reserves that strengthen the bargaining position of borrowers, they also have incentives to restrict the supply of short-term trade credit during renegotiations. We first show that they effectively do so and then derive propositions that : I) establish the size of sovereign debt haircuts as a function of economic fundamentals and preferences ; II) predict that defaults occur during recessions rather than booms, contrary to reputation based models ; III) provide a rationale for holding costly borrowed reserves and, IV) show that the stock of borrowed international reserves tends to increase when global interest rates are low.

The international stock pollutant control: a stochastic formulation

In this paper we provide a stochastic dynamic game formulation of the economics of international environmental agreements on the transnational pollution control when the environmental damage arises from stock pollutant that accumulates, for accumulating pollutants such as CO2 in the atmosphere. To improve the cooperative and the noncooperative equilibrium among countries, we propose the criteria of the minimization of the expected discounted total cost. Moreover, we consider Stochastic Dynamic Games formulated as Stochastic Dynamic Programming and Cooperative versus Noncooperative Stochastic Dynamic Games. The performance of the proposed schemes is illustrated by a real data based example