Preference Structures of Negotiators and Negotiation Outcomes

Using a database collected during about 3,000 negotiation experiments, this paper analyzes how specific features of utility functions of negotiators, like attribute weights, monotonicity and convexity of marginal utility functions, are reflected in the outcomes of negotiations. We find that compromise values are to a considerable extent influenced by the utility functions. There are also significant impacts on the likelihood of achieving a compromise, but the model fit is considerably less than for compromise values.     

Testing Fairness Principles for Public Environmental Infrastructure Decisions

Group Decision and Negotiation - Public infrastructure decisions affect many stakeholders with various benefits and costs. For public decisions, it is crucial that decision-making processes and...     

Behavioral uncertainty and investments in cooperative relationships

We study a cooperative relationship between two economic agents, in which one agent can make investments in the relationship to reduce the probability that the other agent defects. The probability of defection is derived from an incomplete information decision model of the transaction partner. We show that the relationship between investment and probability of defection depends on the type of uncertainty considered and analyze the effects of parameter changes on the optimal level of investment. Copyright © 2004 John Wiley & Sons, Ltd.     

An Analytical Approach to Offer Generation in Concession-Based Negotiation Processes

We develop analytical models to assist negotiators in formulating offers in a concession-based negotiation process. Our approach is based on plausible requirements for offers formulated in terms of utility values for both the negotiator making the offer and the opponent receiving it. These requirements include value creation, reciprocity, and the fact that an offer actually leads to concessions. Trade-offs between their own and the opponent’s utilities can be formulated by negotiators and define a search path in the utility space. Solutions along this search path are then mapped back into the issue space to generate actual offers. We present and discuss several variants of optimization models to generate such offers and illustrate them with an numerical example.     

A Classification of Bargaining Steps and their Impact on Negotiation Outcomes

In this paper, we develop a typology of bargaining steps for multi-issue negotiations, which is derived from possible changes in single issues. By considering all combinations of such changes, we create a consistent classification of steps. This classification forms the basis of an empirical analysis of the impact of different types of bargaining steps on various outcome dimensions of negotiations. We perform an exploratory analysis based on an ex-post analysis of existing negotiation data, which was collected over several years using an Internet-based negotiation support system. Empirical results indicate a strong positive impact of log-rolling strategies and a negative impact of “hard” tactics like insistence on the chances of reaching an agreement. Contrary to expectations, hard tactics do not improve the efficiency of agreements.     

Two-party Bargaining Processes Based on Subjective Expectations: A Model and a Simulation Study

Group Decision and Negotiation - This work presents a model for a two-party bargaining process in which multiple offers are exchanged as the negotiation goes on, under a risk of breakdown. Typical...     

Data-Driven Phase Analysis of E-negotiations: An Exemplary Study of Synchronous and Asynchronous Negotiations

In this empirical study, we present a new method for analyzing coded and categorized data of negotiation protocols. By applying a data-driven identification of negotiation phases we are able to identify endogenous dynamics of negotiation processes and to combine advantages of both, episodic and stage models of phase analysis. We present an exemplary study in which we compare processes of synchronous and asynchronous electronic negotiations. This analysis shows that, while synchronous negotiations follow a phase model similar to sequential stage models as discussed for face-to-face negotiations, asynchronous negotiations show less evidence of such a structure.     

Strategic Behavior in Contested-Pile Methods for Fair Division of Indivisible Items

Most fair-division procedures are modeled on cake-cutting procedures such as “I cut, you choose”. The inputs are players’ choices, which are assumed to reflect preferences but not fully reveal them; the output is a division that is in some sense fair. However, it seems likely that decision makers sometimes behave insincerely, that is, they make choices that are not consistent with their true preferences. For example, strategic—as opposed to sincere—behavior may be aimed at taking advantage of information about an opponent’s preferences, which most fair-division procedures assume is not available. We focus on contested-pile procedures, a class of procedures for the fair division of indivisible items between two players, related to the alternation procedures proposed by Brams and Taylor (The win-win solution: guaranteeing fair shares to everybody. W. W. Norton, New York, 1999). We use computational models to assess the performance of these procedures under both sincere and strategic behavior. We show how available information about preferences can interact with strategy to shape outcomes. Our results indicate that strategic behavior, although it often changes outcomes, may not make them less efficient or less fair. Furthermore, our investigation suggests that how information about the opponents preference is processed does not have a strong impact, in that a conceptually simple strategy often outperforms a more elaborate one.     

Mediation with Incomplete Information: Approaches to Suggest Potential Agreements

In bilateral Negotiation Analysis, the literature often considers the case of complete information. In this context, since the negotiators know the value functions of both parties, it is not difficult to calculate the Pareto efficient solutions for the negotiation. Thus rational negotiators can reach agreement on this frontier. However, these approaches are not applied in practice when complete information is not available. The research question of our work is “It is possible to help negotiators achieving an efficient solution in the absence of complete information regarding the different parameters of the model?”. We propose to derive incomplete information about the preferences of negotiators from the statements they make and the offers they exchange during the negotiation process. We present and discuss three approaches that use this information in order to help a mediator proposing a better solution than the compromise the negotiators have reached or are close to reach.     

Do Self-Reported Strategies Match Actual Behavior in a Social Preference Experiment?

According to many models, social preferences are influenced by properties of payoff distributions like the payoff to the group member who is worst off, or higher payoffs to other members possibly causing envy. In this paper, we explore if subjects in a social preference experiment consciously take these elements into account. To study this question, we performed an experiment in which subjects stated indifference values of unequal payoff distributions, and explicitly reported on the strategies they used in stating these values. This approach allows us to obtain a cardinal measure of their social preferences, and to study the impact both of subject characteristics and stated strategies on these values. Our results indicate that although experimental factors, like group composition or field of study of subjects, are significantly related to self-reported strategies, they barely have a statistically significant impact on the indifference values given. On the other hand, we find highly significant relationships between self-reported strategies and actual behavior. Furthermore, our results indicate that the salience of different payoff distribution characteristics, and the impact of different motives on actual decisions, is context dependent.