A method for examining learning in negotiation

The impact of feedback on interpersonal learning in negotiation was examined. An interactive computer program was developed to isolate the effect of individual judgment on performance. Subjects negotiated three times with a computerized opponent whom they were led to believe was another subject. Some subjects received a complete diagnosis of their opponents' interests following each negotiation (full feedback); others only learned about their opponents' payoffs (outcome feedback); some did not receive any information about the opponent (control). The prediction was that subjects who received a complete diagnosis would make more accurate judgments about their opponents' interests and reach more integrative agreements in subsequent negotiation situations. The results provided weak support for the model. Two indices of performance were studied: negotiators' ability to recognize compatible issues and logrolling, or the ability to make mutually beneficial tradeoffs among issues. The pattern of findings was dramatically different for the two performance measures: Whereas logrolling improved as negotiators gained experience, recognition of compatible issues worsened over trials. The degradation of performance for compatible issues was curbed for negotiators who were provided with full feedback. The feedback did not affect logrolling performance.The research reported in this article was supported by a grant from the National Science Foundation #SES89211926.     

A Recursive Protocol for Negotiating Contracts Under Non-monotonic Preference Structures

Negotiating contracts with multiple interdependent issues may yield non-monotonic preference spaces for the participating agents. These negotiations are specially challenging because of the complexity and dimension of the search space. Automated negotiation mechanisms designed and proven useful for monotonic utility spaces may fail in these negotiation scenarios. This paper presents a novel solution to the problem of automated multi-issue negotiations in the context of complex utility spaces. We seek to address the challenge of intractably large contract spaces and utility functions with multiple local optima in automated negotiation scenarios. A protocol for automated bilateral multi-attribute negotiation processes is proposed, in which the individual agents??preferences can be non-monotonic and discontinuous. The protocol is based on a recursive non-mediated bargaining mechanism, which involves two agents who simultaneously exchange proposals defined as regions within the negotiation space. An agreement on a region implies a new bargaining which is restricted to that region. This recursive process is governed by a set of rules which modulate the joint exploration of the negotiation space until an agreement is found or a deadline expires. The protocol is experimentally evaluated under monotonic and non-monotonic preference scenarios, confirming that the protocol is able to produce outcomes close to the Pareto frontier in acceptable negotiation time, outperforming previous approaches.     

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.     

Evaluations of Tactics for Automated Negotiations

Automated negotiation under the infrastructure of e-commerce is becoming an important issue. However, although the communication protocols and frameworks of automated negotiation have been extensively investigated, the corresponding tactics and strategies are still underdeveloped and need to be evaluated further. Based on the negotiation model proposed by Faratin et al., this paper examines the performance of automated negotiation tactics and intends to provide concise suggestions for the users of automated negotiation. First, theoretical analysis is used to evaluate the behavior-dependent tactics. Constructive conclusions are obtained when single-issue negotiations are considered. Next, a new framework for applying single-issue tactics to multi-issue negotiation is proposed. Based on this framework, theoretical analysis is then extended to multi-issue cases. Finally, different from the previous work, exhaustive simulations based on two-issue negotiations are performed to evaluate the effectiveness of behavior-dependent and time-dependent tactics. The experimental results provide several important insights into negotiation tactics.     

Judgment of Ingroups and Outgroups in Intra- and Intercultural Negotiation: The Role of Interdependent Self-Construal in Judgment Timing

Extending the common ingroup identity model (Gaertner et al. 1993, European Reveiw of Social Psycology, Vol. 4, pp. 1–26) and social categorization theory (Turner et al. 1987, Rediscovering the Social Group: A Self-Categorization Theory, Oxford: Basil Blackwell.), the current study investigates when superordinate categorization with an opponent occurs during intra- and intercultural integrative negotiation. I hypothesize that a high level of interdependent self-construal (Markus and Kitayama 1991, Psychological Review, 98, 224–253) is associated with early superordinate categorization with an opponent and favorable judgment of an opponents cultural group before negotiation takes place, whereas a low level of interdependent self-construal shows favorable judgment of an ingroup and outgroup after negotiation is closed. One hundred fourteen participants of the U.S. and the Republic of Korea completed a multi-issue negotiation simulation with integrative potential in either intracultural or intercultural dyads. Results support the hypotheses. I discuss theoretical and practical implications of the sensitivity of interdependent self-construal to social context and fluid boundaries of ingroups and outgroups, and the role of integrative negotiation in improving intergroup relations in globalizing and multicultural organizations and societies.     

Negotiation protocol based on ordered weighted averaging and Fuzzy metrics

ABSTRACT

Negotiation Support Systems are used to exchange offers and to improve the negotiation process. Some methods are based on perspectives like heuristics in order to bring the negotiation protocol gradually closer to reality. These approaches can be important in real negotiation as they can help to improve skillsespecially in distributive bargaining. This paper proposes a Negotiation Support framework to provide the negotiator with recommendations on making decisions in a negotiation process. To input this idea into negotiation protocols, this paper suggests that some concepts based on OWA (Ordered Weighted Averaging) and some of its metrics (Orness, Dispersion) be included in the heuristics of a structured negotiation schedule. It is expected that the support provided will aid the negotiator to make decisions during the negotiation process, to learn from the elicitation and his own behavior the results obtained can help the negotiator improving his skills in the negotiation process.     

Negotiation Support Through Interactive Dominance Relationship Specification

Group Decision and Negotiation - Preference evaluation is a key aspect of multi-issue negotiation support, especially when the set of possible alternative offers is large. Approaches based on...     

Strategies and language trends in learning success and failure of negotiation

In negotiation by electronic means, language is an important deal-making tool which helps realize negotiation strategies. Negotiators may use language to request information, exchange offers, persuade, threaten, as well as reach a compromise or find prospective partners. All this is recorded in texts exchanged by negotiators. We explore the language signals of strategies—argumentation, persuasion, negation, proposition. Leech and Svartvik’s approach to language in communication gives our study the necessary systematic background. It combines pragmatics, the communicative grammar and the meaning of English verbs. Language signals become features in the task of classifying those texts. We employ Statistical Natural Language Processing and Machine Learning techniques to find general trends that negotiation texts exhibit. Our hypothesis is that language signals help predict negotiation outcomes. We run experiments on the Inspire data. The electronic negotiation support system Inspire was gathering data for several years. The data include text messages which negotiators may exchange while trading offers. We conduct a series of Machine Learning experiments to predict the negotiation outcome from the texts associated with first halves of negotiations. We compare the results with the classification of complete negotiations. We conclude the paper with an analysis of the results and a list of suggestions for future work.     

Social Motives and Trust: Implications for Joint Gains in Negotiations

This study examined the role of trust via contingency model in a multi-issue multi-party negotiation setting and how it relates to outcomes. Results of a laboratory experiment with 288 undergraduate students confirmed both a main effect of Social Value Orientations (SVO), such that cooperative negotiators achieved higher joint gains than pro-self negotiators, and a main effect of Motivational Orientations (MO), such that pro-social negotiators attained higher joint gains than egoistic-oriented negotiators. Furthermore, the predicted interaction effect between SVO and MO, such that negotiators with a pro-self SVO attained higher joint gains in a pro-social, in contrast to an egoistic MO, condition was confirmed. This effect was fully mediated by trust. The dimension of trust that explained the SVO and MO interaction was that of concern for fellow negotiators as rated by oneself, as well as by an objective third-party observer. Implications for the strategic use of social motives and trust on effective information exchange and negotiated outcomes are discussed.     

Conducting Dyadic Multiple Issue Negotiation Experiments: Methodological Recommendations

We take a critical, yet constructive look at the literature that focuses on multiple issue negotiation experiments. Our purpose is to offer suggestions for improvement when conducting such experiments. We focus on experiments, which are conducted using an externally imposed value point structure for the negotiators across issues together with background context information. Negotiator performance in such experiments is generally poor in the sense that Pareto inferior settlements are typically generated. A possible explanation is that negotiators sometimes follow the externally imposed value points and sometimes their own values pertaining to the context. Hence we conclude that it would be better if multiple issue negotiation experiments would not be based on an apriori given value point structure - unless we have compelling reasons for it - particularly if no agents are used. The common argument against doing this is that we cannot then identify Pareto optimal or Pareto preferred settlements for the subjects. Recent research integrating the fields of Multiple Criteria Decision Making (MCDM) together with negotiation analysis, however, provides a possible solution to this problem. An experiment conducted by the authors is used to illustrate our methodological recommendations.     

The unethical exploitation of shareholders in management buyout transactions

The accurate pricing of securities in the capital markets depends upon the markets being both efficient and fair. In management buyout transactions (MBOs), the price bid by inside managers enhances the efficient pricing of securities but raises a reasonable doubt about the fairness to existing shareholders. This study addresses this fairness question in MBOs and offers short-term and long-term legal alternatives which allow both the efficiency and fairness criteria to be met. In the short-term the case law established in the Basic v. Levinson decision for merger negotiation disclosures should be applied to MBO transactions. Over the longer horizon, legislative changes should be made to existing securities laws. Applying the investor protection principles of the 1933 and 1934 securities acts to MBO transactions will suppress the temptation of managers to extract shareholder wealth for their personal gain. Frederick P. Schadler, Assistant Professor of Finance at East Carolina University, in Greenville, North Carolina. Research interests include security issuances, investment banking, and ethical issues related to securities regulation. He has presented papers at regional and national meetings and has published in the Journal of Financial and Strategic Decisions and the Memphis State University Law Review. Jack E. Karns, an Associate Professor of Business Law at East Carolina University. Research is directed toward corporate law, securities, and government regulation of business issues including ethical considerations. He has published in numerous legal journals including the Dickinson, University of Richmond, and Memphis State University Law Reviews.     

Positive affect and decision frame in negotiation

This study examined decision frame (“gain” vs. “loss”) and negotiator affect (positive vs. control) in a simulated bilateral negotiation where negotiators dealt with a programmed opponent and made offers and counteroffers on three issues that differed in value. Direct comparisons between the gain and loss frame conditions, in the control-affect condition, revealed a replication of the standard frame effect: a loss frame produced fewer concessions than a gain frame. However, an interaction effect indicated that the frame effect reversed in the positive affect condition: under positive affect, a loss frame produced greater concessions than a gain frame. In addition, the data indicated a replication of earlier work showing that positive affect can lead to more integrative agreements in negotiation. The results suggest that positive affect can influence location of a reference point in evaluating prospective outcomes; one implication is that prospect theory can be useful for understanding the effects of affect in bilateral negotiation.     

The Role for Long‐run Target Values of the Exchange Rate in the Bank of Japan's Policy Reaction Function

This paper analyses whether the Bank of Japan (BoJ) had fundamental concepts in mind when carrying out interventions in the foreign exchange market. We start by considering different long‐run fundamental target values based on a monetary exchange rate model and compare them with more ad hoc targets. Based on these findings, we explain the intervention probability for the BoJ after 1991 based on an ordered probit model by accounting for subperiods and asymmetric effects. It turns out that estimated fundamentally based values for the exchange rate provide additional information for the decision to intervene, in particular after 1995. However, short‐run ad hoc targets seem to be very important, in particular from 1991 until 1995, while medium‐run ad hoc targets gain importance at the end of the 1990s. Overall, we find a ‘leaning against the wind’ strategy in the event of overvaluation relies on ad hoc targets while intervention in cases of undervaluation seems to be guided more strongly by deviations from fundamental values.     

Traders’ Subjective Appraisals: Comparison of Negotiations and Auctions

ABSTRACT

The assessments of business trade often involve economic and relational concerns. They may become more challenging when our understanding of the impacts of trading mechanisms is still limited. The current experimental study compares two generic trading mechanisms, namely, multibilateral multi-issue negotiations and multicriteria auctions. By examining economic measures and subjective appraisals in controlled exchange episodes, the study shows some subtle relationships between mechanism use, substantive outcomes, and subjective appraisals. While use of negotiations versus auctions did not reveal significant differences on economic measures, traders are strongly influenced by the gain-or-loss contingency. When they win a contract, their subjective appraisals are heavily influenced by their achieved substantive outcomes. When they do not win a contract, they feel auctions are better than negotiations. The results confirm the assessments of business trade that rely solely on substantive measures are not sufficient.     

Quid pro quo and the enforcement of intellectual property rights protection: A bargaining approach

This article models a North–South negotiation where the North provides a quid pro quo in exchange for the strengthening of the enforcement of intellectual property rights (IPR) protection in the South. We show that when Northern and Southern firms compete on quantity in the Southern market, the South's optimal choice is either complete protection or complete violation, irrespective of different levels of IPR protection being available. We show this to depend on the Southern government's valuation of the quid pro quo and the Northern firm's level of technology.     

Labor-management contract negotiations in an electronic meeting room: A case study

We present perhaps the first case study of labor-management contract talks conducted in an electronic meeting room supported by a computer Negotiation Support System (NSS). The organization's union and management representatives spent a total of 57 hours (13 sessions) in the electronic meeting room; their efforts resulted successfully in a contract ratified by both sides. The NSS described comprised three tools from theGroup Systems electronic meeting system and three ad hoc tools. Besides the NSS, three other intervention factors were introduced in tandem with the NSS: new negotiation process techniques, the active involvement of third party mediators, and a unique negotiation setting. The new process techniques were introduced based on the goals of integrative bargaining and the Win-Win techniques. The negotiation process was divided into three distinct stages: strategy, issues, and bargaining.     

The Effects of Media and Task on User Performance: A Test of the Task-Media Fit Hypothesis

This research was designed to examine the task-media fit hypothesis, an extension to media richness theory that predicts the objective performance of various media for a number of task types. To examine this model, dyads communicating through face-to-face, videophone, telephone (i.e., audio-only communication), or synchronous computer-mediated communication worked in a laboratory experiment to address an intellective or negotiation task. The intellective task required that each dyad member effectively share factual information that each individual independently held. The negotiation task required that each dyad member effectively share preferences based on personal values and reach an agreement. The results of the study provide mixed support for the task-media fit hypothesis. In general, the results for the negotiation task largely supported the theory while the results for the intellective task did not support the theory. These results help to clarify limitations and provide extensions to the theory by demonstrating how variations in task processes and communication media act to mediate task performance. The implications of these results for future research and practice are discussed.     

Fuzzy Negotiation Solutions of n-Person Cooperative Games by Knowledge Engineering in Bargaining

A model for negotiation is developed upon the basis of a previous model called Fuzzy Negotiation Solution by Knowledge Engineering. The new model, called Compensatory Negotiation Solution by Knowledge Engineering and FNSKE are based on the combination of knowledge of experts in negotiation, rather than on classical notions of rationality. The experts in negotiation present four propositions in a non-mathematical way and with a natural language, according to the theory of Knowledge Engineering. In the CNSKE model, knowledge is represented through logic predicates, and the calculations are made using the Compensatory Fuzzy Logic system. CFL is a system whose operators satisfy the axioms of Utility. The CFL operators, especially because of the compensation property, are more adequate than the norm and co-norm’s operators to model human decision-making, according to empirical results. The Good Deal Index in CNSKE is statistically estimated from the GDI in FNSKE. This is a quantitative index, which provides the solution concept. The fuzzy function f(C) represents the likelihood the players of a coalition C to reach an agreement into this coalition. Counterpart Convenience Indexes 1, 2 allow each player to select the best coalition for negotiation. The advantage of CNSKE over FNSKE is that the idempotency of conjunction and disjunction operators give every membership function -obtained from the predicates- the possibility to be interpreted by itself. Hence, the truth-values of the CNSKE membership functions can be semantically interpreted. In addition, CNSKE can be easily applied to solve real negotiation problems.     

The effects of argument preparation and timing of first offer on negotiators' cognitions and performance

We investigate how argument preparation (self-only, self/counter) and the timing of the first offer (immediate, delayed) combine to affect negotiation performance. Subjects participated in a dyadic negotiation concerning the out-of-court settlement of a lawsuit. Subjects prepared by generating a list of arguments in support of their case (self-only), or by generating a list of arguments in support of their caseaccompanied by a list of counterarguments that they might expect from their opponent (self/counter). In the Immediate Offer condition, subjects began the negotiation with an exchange of written settlement offers. In the Delayed Offer condition, subjects began the negotiation with a discussion of the qualitative negotiation issues. It was proposed that negotiators who prepared both their own and counterarguments would be more flexible and that this effect would be increased by delaying the first offer. The results indicate that the effects of these variables are more complex than originally proposed, and reveal significant interactions with the negotiator's role in the conflict.The first author was supported by the IBM Faculty Research Fund at the Graduate School of Business, the University of Chicago.     

On automated e‐business negotiations: Goal,policy, strategy,and plans of decision and action

In recent years, there has been increasing interest in automated e‐business negotiations. The automation of negotiation requires a decision model to capture the negotiation knowledge of policymakers and negotiation experts so that the decision‐making process can be carried out automatically. Current research on automated e‐business negotiations has focused on defining low‐level tactics (or negotiation rules) so that automated negotiation systems can carry out automated negotiation processes. These low‐level tactics are usually defined from a technical perspective, not from a business perspective. There is a gap between high‐level business negotiation goals and low‐level tactics. In this article, we distinguish the concepts of negotiation context, negotiation goals, negotiation strategy, and negotiation tactics and introduce a formal decision model to show the relations among these concepts. We show how high‐level negotiation goals can be formally mapped to low‐level tactics that can be used to affect the behavior of a negotiation system during the negotiation process. In business, a business organization faces different negotiation situations (or contexts) and determines different sets of goals for different negotiation contexts. In our decision model, a business policymaker sets negotiation goals from different perspectives, which are called goal dimensions. A negotiation policy is a functional mapping from a negotiation context to some quantitative measures (or goal values) for the goal dimensions to express how competitive the policymaker wants to reach that set of goals. A negotiation expert who has the experience and expertise to conduct negotiations would define the negotiation strategies needed for reaching the negotiation goals. Formally, a negotiation strategy is a functional mapping from a set of goal values to a set of decision‐action rules that implement negotiation tactics. The selected decision‐action rules can then be used to control the execution of an automated negotiation system, which conducts a negotiation on behalf of a business organization.