Introduction Automated negotiation systems with self-interested agents are becoming increasingly important. One reason for this is the technology push of a growing standardized communication infrastructure---Internet, WWW, NII, EDI, KQML, FIPA, Concordia, Voyager, Odyssey, Telescript, Java, etc---over which separately designed agents belonging to different organizations can interact in an open environment in realtime and safely carry out transactions. The second reason is strong application pull for computer support for negotiation at the operative decision making level. For example, we are witnessing the advent of small transaction electronic commerce on the Internet for purchasing goods, information, and communication bandwidth [29]. There is also an industrial trend toward virtual enterprises: dynamic alliances of small, agile enterprises which together can take advantage of economies of scale when available (e.g., respond to mor

If the Internet is the next great subject for Theoretical Computer Science to model and illuminate mathematically, then Game Theory, and Mathematical Economics more generally, are likely to prove useful tools. In this talk I survey some opportunities and challenges in this important frontier. 1.

We present a modal logic for reasoning about what groups of agents can bring about by collective action. Given a set of states, we introduce game frames which associate with every state a strategic game among the agents. Game frames are essentially extensive games of perfect information with simultaneous actions, where every action profile is associated with a new state, the outcome of the game. A coalition of players is effective for a set of states # in a game if the coalition can guarantee the outcome of the game to lie in # . We propose a modal logic (Coalition Logic) to formalize reasoning about effectivity in game frames, where #### expresses that coalition # is effective for #. An axiomatization is presented and completeness proved. Coalition Logic provides a unifying game-theoretic view of modal logic: Since nondeterministic processes and extensive games without parallel moves emerge as particular instances of game frames, normal and non-normal modal logics correspond to 1- and 2-player versions of Coalition Logic. The satisfiability problem for Coalition Logic is shown to be PSPACE-complete.

Cooperative games are those in which both agents share the same payoff structure. Valuebased reinforcement-learning algorithms, such as variants of Q-learning, have been applied to learning cooperative games, but they only apply when the game state is completely observable to both agents. Policy search methods are a reasonable alternative to value-based methods for partially observable environments. In this paper, we provide a gradient-based distributed policysearch method for cooperative games and compare the notion of local optimum to that of Nash equilibrium. We demonstrate the effectiveness of this method experimentally in a small, partially observable simulated soccer domain. 1 INTRODUCTION The interaction of decision makers who share an environment is traditionally studied in game theory and economics. The game theoretic formalism is very general, and analyzes the problem in terms of solution concepts such as Nash equilibrium [12], but usually works under the assu...

Abstract We study a class of single round, sealed bid auctions for items in unlimited supply such as digital goods. We focus on auctions that are truthful and competitive. Truthful auctions encourage bidders to bid their utility; competitive auctions yield revenue within a constant factor of the revenue for optimal fixed pricing. We show that for any truthful auction, even a multi-price auction, the expected revenue does not exceed that for optimal fixed pricing. We also give a bound on how far the revenue for optimal fixed pricing can be from the total market utility. We show that several randomized auctions are truthful and competitive under certain assumptions, and that no truthful deterministic auction is competitive. We present simulation results which confirm that our auctions compare favorably to fixed pricing. Some of our results extend to bounded supply markets, for which we also get truthful and competitive auctions.

Automated intelligent agents inhabiting a shared environmentmust coordinate their activities. Cooperation { not merely coordination { may improve the performance of the individual agents or the overall behavior of the system they form. Research in Distributed Arti cial Intelligence (DAI) addresses the problem of designing automated intelligent systems which interact e ectively. DAI is not the only eld to take on the challenge of understanding cooperation and coordination. There are a variety of other multi-entity environments in which the entities coordinate their activity and cooperate. Among them are groups of people, animals, particles, and computers. We argue that in order to address the challenge of building coordinated and collaborated intelligent agents, it is bene cial to combine AI techniques with methods and techniques from a range of multi-entity elds, such as game theory, operations research, physics and philosophy. To support this claim, we describe some of our projects, where we have successfully taken an interdisciplinary approach. We demonstrate the bene ts in applying multi-entity methodologies and show the adaptations, modi cations and extensions necessary for solving the DAI problems.

In the last few years we have witnessed a surge of business-to-consumer and business-to-business commerce operated on the Internet. However, most current electronic commerce systems are little more than electronic catalogues that allow a user to purchase a product under predetermined and inflexible terms and conditions. We believe that in the next few years we will see a new generation of electronic commerce systems emerge, based on automated negotiation. In this paper, we identify the main parameters on which any automated negotiation depends. To show the applicability of our classification framework, we use it to categorise a representative sample of some of the most prominent negotiation models that exist in the literature.

A Dissertation Presented by TUOMAS W. SANDHOLM

Abstract We consider the price of anarchy of pure Nash equilibria in congestion games with linearlatency functions. For asymmetric games, the price of anarchy of maximum social cost is \Theta (p N),where N is the number of players. For all other cases of symmetric or asymmetric games andfor both maximum and average social cost, the price of anarchy is 5 /2. We extend the results tolatency functions that are polynomials of bounded degree. We also extend some of the results to mixed Nash equilibria.

We consider the problem of selecting a low cost s − t path in a graph, where the edge costs are a secret known only to the various economic agents who own them. To solve this problem, Nisan and Ronen applied the celebrated Vickrey-Clarke-Groves (VCG) mechanism, which pays a premium to induce the edges to reveal their costs truthfully. We observe that this premium can be unacceptably high. There are simple instances where the mechanism pays Θ(k) times the actual cost of the path, even if there is an alternate path available that costs only (1 + ɛ) times as much. This inspires the frugal path problem, which is to design a mechanism that selects a path and induces truthful cost revelation without paying such a high premium. This paper contributes negative results on the frugal path problem. On two large classes of graphs, including ones having three node-disjoint s − t paths, we prove that no reasonable mechanism can always avoid paying a high premium to induce truthtelling. In particular, we introduce a general class of min function mechanisms, and show that all min function mechanisms can be forced to overpay just as badly as VCG. On the other hand, we prove that (on two large classes of graphs) every truthful mechanism satisfying some reasonable properties is a min function mechanism. 1