In (automated) negotiation systems consisting of self-interested agents, contracts have traditionally been binding. Such contracts do not allow agents to capitalize on uncertain future events. Contingency contracts have been proposed to solve this problem. Contingency contracts are often impractical due to large numbers of interdependent and unanticipated future events on which to condition, and because some events are not mutually observable. We propose a leveled commitment contracting mechanism that allows agents to capitalize on uncertain future events byhaving the possibility of unilaterally decommitting from a contract based on local reasoning. Decommitment penalties are assigned to both agents in a contract: to be freed from the obligations of the contract, an agent only pays the penalty to the other party. One concern is that a self-interested agentwould be reluctant to decommit because there is a chance that the other party will decommit. In this case the former agen...

This paper investigates how the tying of complementary products can be used to both preserve and create monopoly positions, where our focus is on the use of tying to deter the entry of efficient producers. We first show how a firm that is a monopolist of a product in the current period can use tying to preserve its monopoly position in the future. We then show using related arguments how a monopolist in one market can employ tying to extend its monopoly position into a newly emerging market. The analysis focuses on the importance of entry costs and network externalities. The paper includes a Tying is a common practice in many markets, i.e., the seller of product A refuses to sell A to a consumer unless the consumer also purchases B (in this scenario product A is referred to as the tying product and B as the tied product). Examples are numerous such as IBM’s famous practice of requiring purchasers of IBM’s tabulating machines to also purchase tabulating cards from IBM, and Microsoft’s

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We present a general theory that captures the relationship between certain domains and negotiation mechanisms. The analysis makes it possible to categorize precisely the kinds of domains in which agents find themselves, and to use the category to choose appropriate negotiation mechanisms. The theory presented here both generalizes previous results, and allows agent designers to characterize new domains accurately. The analysis thus serves as a critical step in using the theory of negotiation in realworld applications. We show that in certain Task Oriented Domains, there exist distributed consensus mechanisms with simple and stable strategies that lead to efficient outcomes, even when agents have incomplete information about their environment. We also present additional novel results, in particular that in concave domains using all-or-nothing deals, no lying by an agent can be beneficial, and that in subadditive domains, there often exist beneficial decoy lies that do not require full i...

In this paper we present three scheduling mechanisms that are manipulation-proof for closed systems. The amount of information that each user must encode in the mechanism increases with the complexity of the mechanism. On the other hand, the more complex the mechanism is, the more it maintains the privacy of the users. The first mechanism is a centralized, calendar-oriented one. It is the least computationally complex of the three, but does not maintain user privacy. The second is a distributed meeting-oriented mechanism that maintains user privacy, but at the cost of greater computational complexity. The third mechanism, while being the most complex, maintains user privacy (for the most part) and allows users to have the greatest influence on the resulting schedule. 1 Introduction The basic research problem in meeting scheduling is that of timing, that is, when to set a meeting. This question becomes more complicated when there are several meetings to be scheduled that involve the sa...

We study how intermediation and asset prices in over-the-counter markets are affected by illiquidity associated with search and bargaining. We compute explicitly the prices at which investors trade with each other, as well as marketmakers ’ bid and ask prices in a dynamic model with strategic agents. Bid-ask spreads are lower if investors can more easily find other investors, or have easier access to multiple marketmakers. With a monopolistic marketmaker, bid-ask spreads are higher if investors have easier access to the marketmaker. We characterize endogenous search and welfare, and discuss empirical implications. ∗Part of this paper was previously distributed under the title “Valuation in Dynamic Bargaining Markets. ” We are grateful for conversations with Yakov Amihud, Helmut

This paper lays part of the groundwork for a domain theory of negotiation, that is, a way of classifying interactions so that it is clear, given a domain, which negotiation mechanisms and strategies are appropriate. We define State Oriented Domains, a general category of interaction. Necessary and sufficient conditions for cooperation are outlined. We use the notion of worth in an altered definition of utility, thus enabling agreements in a wider class of joint-goal reachable situations. An approach is offered for conflict resolution, and it is shown that even in a conflict situation, partial cooperative steps can be taken by interacting agents (that is, agents in fundamental conflict might still agree to cooperate up to a certain point). A Unified Negotiation Protocol (UNP) is developed that can be used in all types of encounters. It is shown that in certain borderline cooperative situations, a partial cooperative agreement (i.e., one that does not achieve all agents' goals) might be ...

Global communication networks and advances in information technology enable the design of information systems facilitating effective formulation and efficient resolution of negotiation problems. Increasingly, these systems guide negotiators in clarifying the relevant issues, provide media for offer formulation and exchange, and help in achieving an agreement. In practice, the task of analysing, modelling, designing and implementing electronic negotiation media demands a systematic, traceable and reproducible approach. An engineering approach to media specification and construction has these characteristics. In this paper, we provide a rationale for the engineering approach that allows pragmatic adoption of economic and social sciences perspectives on negotiated decisions for the purpose of supporting and undertaking electronic negotiations. Similarities and differences of different theories that underlie on-going studies of electronic negotiations are identified. This provides a basis for integration of different theories and approaches for the specific purpose of the design of effective electronic negotiations. Drawing on diverse streams of literature in different fields such as economics, management, computer, and behavioural sciences, we present an example of an integration of three significant streams of theoretical and applied research involving negotiations, traditional auctions and on-line auctions.

We show how a system of artificial adaptive agents, using a genetic algorithm based learning technique, can learn strategies that enable it to effectively participate in stylized business negotiations. The negotiation policies learned are evaluated on several dimensions, including joint outcomes, nearness to the efficient frontier, and the similarity to outcomes of human negotiations. The results are promising for integrating such agents into practicable electronic commerce systems. We discuss what a system might look like and ways in which particular classes of business negotiations could be supported or even entirely automated. 1 Introduction Even in simple negotiations, people often reach sub-optimal negotiations thereby "leaving money on the table" [1] [2]. While many factors contribute to missing out on gains from trade---overconfidence, falsely assuming fixed pies, and the framing of the situation (e.g. [3])---the end result is that parties fail to find agreements which would ma...

the rules by which agents in an encounter will interact. Once the rules of encounter have been determined, each builder of each agent is free to design his own machine any way that he wants. However, the rules that were established will certainly affect the choices he makes in building his own agent.